Attributing the performance to weaker real estate sales offset gains in rental income and other revenues.
In its earnings report, retail and real estate giant SM Prime reported a slight decline in its consolidated net income for the period of January 1 to September 30, 2026.
According to the company, it posted PHP35.4 billion during the said period, which is PHP1.8 billion lower than its PHP37.2 billion net income during the same period in the year prior.
SM Prime also disclosed that while rent income across its entire portfolio rose 8 percent to PHP66 billion from PHP61 billion, they saw a 23 percent decline in real estate sales (PHP24 billion in 2026 from PHP31.2 billion in 2025).
Consolidated revenues from January to September stood at PHP103.1 billion, which is relatively flat compared with PHP103.4 billion the year prior.
Malls accounted for 62 percent of total revenues and saw number rise by 10 percent to PHP63.7 billion from PHP58.2 billion, which SM attributed to additional leasable space, higher tenant occupancy and strong demand for dining and experiential offerings.
Meanwhile, other revenues from leisure, entertainment, hotel dining, advertising and sponsorship saw a 17 percent rise to PHP13.1 billion from PHP11.2 billion.
SM Prime also said that cost discipline kept operating expenses and cost of real estate sold stable at PHP51.3 billion in 2026, which is a slight decrease from P51.5 billion in 2025.
“Higher borrowing costs, elevated inflation and cautious consumer spending continued to weigh on residential demand,” said SM Prime President Jeffrey Lim.
The residential segment, on the other hand, which include leisure and premium projects, accounted for 25 percent of total revenues.
Segment revenues declined 21 percent to PHP25.6 billion from PHP32.6 billion, which SM said is reflective of “slower revenue recognition and buyer backouts.”
Revenues from offices and warehouses, which accounted for 8 percent of the total, rose 10 percent due to higher occupancy rates—recording PHP7.8 billion in 2026, from PHP7.0 billion in 2025.
The hospitality and MICE segment of the group contributed 6 percent of consolidated revenues, growing 7 percent to PHP6.4 billion from PHP6.0 billion.
Specific to that segment, SM Prime said there had been increased hotel bookings, higher average room rates and stronger demand for meetings, conventions and events lifted revenues.
“[G]rowth in our commercial and hospitality businesses helped keep revenues steady. Our focus on managing costs helped ease the pressure on earnings,” added Lim.
For the third quarter alone, SM Prime said it’s consolidated net income of P10.9 billion, 15 percent lower than P12.8 billion a year earlier. Consolidated revenues also decreased 11 percent to PHP31.4 billion (from PHP35.4 billion the year prior).
Malls contributed PHP21.9 billion in revenues, up 12 percent year-on-year, while residences generated PHP5.0 billion, offices and warehouses PHP2.7 billion, and hotels and convention centers PHP2.0 billion.
Capital expenditures stood at PHP44.4 billion from January to September, which is a 25-percent decline from PHP59.3 billion a year earlier.
“The bulk of the spending went to ongoing mall and residential developments, with the remainder spent on commercial, integrated, hotel and convention center projects,” the group added.
NEW DEVELOPMENTS IN Q4 2026
Meanwhile, for the fourth quarter of the year, SM Prime is also adding more than 150,000 square meters of gross floor area to its regional retail portfolio.
In SM City Iloilo, the North Block will add approximately 35,000 square meters of gross floor area as part of a mixed-use development.
Meanwhile, SM City Sto. Tomas in Batangas will add more than 26,000 square meters through the construction of a third level that will house amusement concepts, restaurants, wellness establishments and retail stores.
SM City Naga in Naga City will undergo a two-storey expansion covering approximately 9,000 square meters, integrating additional parking and roof deck extension and redeveloping existing tenant areas to improve circulation and the overall customer experience.
However, the biggest development is the opening of its second mall in Sta. Rosa, Laguna—SM Nuvali.
The said outlet, positioned as one of the flagships of the mall chain, will open as its 91st location in the Philippines on November 27.
It is a “premier mall” with sustainability integrated into its design and operations—complete with solar panels, water recycling systems and energy-efficient lighting supporting the operation of more than 82,000 square meters of gross leasable area.
