SM Prime Holdings Inc., led by the Sy family, reported that its mall operations remained robust in the first quarter of 2026, defying concerns that rising fuel costs would slow consumer spending.
In a media briefing on Tuesday, Steven Tan, president of SM Supermalls, said foot traffic held steady compared to the same period last year, while sales posted nearly double-digit growth. “It’s exactly the same, but the sales went up to nearly double digit,” Tan said, attributing the performance to stronger tenant sales despite external challenges.
The steady traffic helped support SM Prime’s recurring income, with malls continuing to drive earnings even as the residential segment faced headwinds.
The property giant reported a first-quarter net income of P11.66 billion, virtually unchanged from P11.65 billion a year ago, as higher costs offset modest revenue gains. Total revenues rose 2 percent to P33.3 billion, driven by stronger rental income and other revenues, which cushioned a decline in real estate sales.
Mall revenues climbed 8 percent to P20.4 billion, accounting for 61 percent of the group’s total, thanks to high occupancy and demand for experiential offerings.
SM Prime president Jeffrey Lim said the mall business remained a key anchor, even as softer housing demand weighed on results. “If you look at the first quarter, malls have still grown,” Lim said. He noted that while fixed rental income was stable, variable rents—tied to tenant sales—benefited from increased mall spending.
Despite the upbeat first-quarter showing, Lim cautioned that risks persist. “We expect that the crisis, if this will persist, will definitely affect the second quarter onwards,” he said, citing ongoing volatility.
The company is reassessing its capital expenditure plan of about P100 billion, deferring some projects and redevelopment activities to manage risks. Lim said SM Prime is taking a “holistic” approach, working closely with tenants, suppliers, and contractors to navigate rising costs. “We have to prepare and make sure that we will be able to withstand this volatility,” he said.
Tan added that strong consumer turnout offers a positive signal for the months ahead, even as management remains cautious.