The company sees stronger growth opportunities in malls, hospitality and premium housing, while the recovery in its broader residential market remains uncertain.
“We remain confident in the long term prospects of our portfolio, and we will continue to invest across all businesses,” SM Prime president Jeffrey Lim said during the company's earnings briefing on Monday.
"We're not putting our expansion plans on hold. We are simply being more deliberate about how we spend," he added.
Lim said SM Prime expects capital spending in 2027 to remain broadly comparable to this year, after the property giant cut its expenditures by 25 percent to P44.4 billion in the first nine months of 2026.
Malls and hotels lead growth
SM Prime will complete ongoing mall developments and redevelopments, although it may adjust the timing of other projects depending on market conditions.
Its mall business generated P38.5 billion in operating profit in the first nine months of 2026, up 16 percent, helping cushion weaker housing earnings as rental income continued to grow.
Hotel and convention center projects will proceed as planned, with Lim citing opportunities in tourism, meetings and events after revenues from the business rose 7 percent to P6.4 billion.
Housing recovery remains elusive
The residential market remains the biggest challenge, with third-quarter revenues falling 57 percent and nine-month operating profit falling 49 percent to P6.6 billion.
SM Prime's residential inventory, representing the estimated sales value of completed and unfinished housing units still available for sale, climbed 3 percent to P181.6 billion during the first nine months of 2026, according to its latest presentation to investors.
The number of unsold units declined 5 percent to 25,914 while sales reservations, an indicator of future revenue, slipped 10 percent to P36.8 billion.
Lim said the company would maintain its measured approach to residential launches, favoring premium developments where demand has held up better while waiting for stronger buyer interest in its core market.
For offices, SM Prime has no new launches planned, focusing instead on completing ongoing developments and filling existing buildings, where occupancy improved to 79 percent from 73 percent.
"We will focus on projects with stronger demand while keeping the flexibility to adjust our plans as market conditions evolve," Lim said.
—Edited by Miguel R. Camus
