The property giant has awoken and SM Prime will list its REIT in the second half of this year as reported in multiple news outlets today. It will primarily consist of 15 malls with the aim to raise $1 billion at IPO. It plans to use the proceeds to fund its massive Pasay-Paranaque reclamation project.

I was pleasantly surprised that SM Prime decided to infuse the shopping centers first instead of its office buildings. This is great for investors looking for alternatives since majority of the current REITS consist of office buildings. Sure we already have VREIT but its nowhere near as large as SM in terms of gross leasable area and geographic footprint. Without a doubt, SM is the undisputed leader in shopping malls.

I am also keen to find out if they plan to infuse other property types in the future and make this a diversified REIT with offices, hotels and convention centers. Having a mixed portfolio will better protect a REIT’s dividend payout against headwinds. Just look at the reduced dividends from FILRT and MREIT.

Looking forward to reading its prospectus and perhaps invest in its upcoming IPO.