SM Prime : 2023

Who We Are

Corporate Governance

Who We Are

SM Prime Holdings, Inc. (SM Prime), a key subsidiary of SM Investments Corporation (SMIC), is a leading force in the Philippine real estate sector. Combining a robust market capitalization, adherence to the highest standards, and an inclusive customer base, SM Prime has gained recognition as one of Asia's premier sustainable integrated property developers and mall operators.

Our commitment to legacy developments and integrated communities is at the core of how we build. Our brand is anchored in SM Prime's dedication to social inclusion, environmental stewardship, and economic advancement in support of sustainable growth that elevates the art of living. We believe our greatest contribution to our customers is our never-ending advocacy to evolve and serve their needs, whether in the pursuit of strategic industry leadership or transformational collective action to address our generation's most critical challenges.

Our diverse portfolio of malls, residences, offices, hotels and convention centers exemplify our goal to harmonize

various real estate categories to create shared wealth and intergenerational properties.

Through our growing number of integrated developments across the Philippines and China, SM Prime strives

to enhance the quality of urban life, creating spaces that resonate with the aspirations and needs of the communities we serve.

SM Prime envisions a future marked by innovation, resilience, and sustained growth. In the coming years, we expect significant growth across our business segments on the back of increased homeownership and leisure and travel spending, not only in Metro Manila but across our provincial growth hubs.

As we navigate the challenges and opportunities of an evolving real estate landscape, we remain committed to delivering exceptional value to our stakeholders, enriching communities, and contributing to overall socio-economic development.

Vision

To build and manage innovative, sustainable integrated property developments that are catalysts for a better quality of life.

Mission

We will serve the ever-changing needs and aspirations of our customers, provide opportunities for the professional growth of our employees, foster social responsibility in the communities we serve, enhance shareholder value for our investors and ensure that everything we do safeguards a healthy environment for future generations.

What We Stand For

Innovation Teamwork

Sustainability

About Our Report

Our 2023 integrated report is the outcome of a groupwide reporting process governed by SM Prime's Board of Directors, led by our Management Committee, and produced through collaboration with the Sustainability Departments and various line organizations and business units.

This report aims to provide a clear, principles-based,multi-capital view of SM Prime's performance for the year ended December 31, 2023. It covers our company's business models and strategies, outlooks, impacts, and how we create and preserve value over time through sustainable integrated property developments that uplift local businesses and communities.

Through this publication, we become one of the first companies in the Philippines to follow the IFRS recommendations for financial reporting espoused by the Philippine Securities and Exchange Commission in its preliminary guidelines. As a publicly traded company, we seek to refine our reporting process and further strengthen our market credibility through the early adoption of the IFRS standards set to take effect in the Philippines in 2025.

SM Prime has reported with references to the GRI Standards from the period of January 1, 2023 to December 31, 2023.

External Verification

Last year, the shareholders of SM Prime appointed Sycip Gorres Velayo & Co. (SGV), a member of Ernst & Young International Ltd., to examine the consolidated financial statements of the Company for the year ended December 31, 2023. SGV's Independent Auditor's Report and Audited Financial Statement are available on pages 136-147.

Furthermore, we engaged SGV to audit the Company's ESG performance data for the year 2023. SGV's Independent Limited Assurance Statement is on pages 148-153.

Statement from the Board of Directors

In adherance to our company's regulations, SM Prime's Board of Directors has reviewed the integrated report prior to its public release.. The Board assures that

the report addresses all concerns that are material to the group's performance in creating value for our stakeholders.

85

malls in the Philippines

8

malls in China

10.8

million sqm total Gross Floor Area

PHP71.9B

Revenue for the year

With strategic precision in creating engaging retail platforms, crowd-drawing events, and timely activations for unforgettable shopping and bonding experiences, The Malls group pushes the boundaries of what malls and shopping centers can offer, from retail, culinary, and entertainment options to cultural spaces, private healthcare services, and satellite government offices.

The Malls connects beloved global brands with customers while nurturing the growth of Philippine brands to bring a healthy and economically vibrant local retail industry. Each SM mall offers a range of customer options and value-for-money services catering to

a wide demographic.

Beyond retail, the value of SM malls lies in community relations. No other shopping mall has interwoven itself so seamlessly into Philippine everyday life and culture as SM. Every day, SM malls assist an average of three million customers in finding what they need. SM malls transcend traditional shopping experiences by embodying the contemporary version of the Philippine plaza or central town space. They have become pivotal gathering spots where local communities celebrate milestones, engage in various types of events and group activities, and enjoy moments of leisure and socialization with family and friends.

As of the end of 2023, SM Prime has developed and operates 85 malls in the Philippines and eight in China, covering a total gross floor area of 10.8 million square meters and generating over PHP 71.9 billion in revenue. The Malls provides a platform that promotes entrepreneurship and supports opportunities for growth for 22,798 local businesses, many of them small

and medium enterprises.

The Malls commitment to revitalizing local communities is clear in its continued strategic expansion into provincial areas. By opening three new malls in Bataan, San Pedro, and Sto. Tomas with a total 140,000 sqm of retail space, The Malls leverages the trend of increased travel and spending outside the National Capital Region. These expansions go beyond financial growth; they also aim to enrich local communities, celebrate Philippine culture, and foster economic development.

Post-pandemic, The Mall's rental rates returned to its pre-pandemic levels. With a 95% occupancy rate as of December 2023, up slightly from 2022, the outlook is positive. The additional malls not only boosts short-term profits but also strengthens The Malls' leading position in the Philippine retail sector, with continued significant revenue growth anticipated from 2023 to 2025.

183,491

No. of units

SM Development Corporation (SMDC) is the largest and fastest-growing residential sector developer in the Philippines. The award-winning company is committed to creating world-class, sustainable communities.

With a mission to make the cosmopolitan lifestyle accessible to more Filipinos, SMDC has been at the forefront of building vertical and horizontal residential and integrated mixed-use developments in prime locations. SMDC projects offer seamless integration to SM Malls and transport hubs, complete with hotel-like lobbies, resort-style amenities, and professional property management. Since 2003, they have launched more than 183,000 residential units across 67 developments nationwide.

Each SMDC condominium development offers resort- level leisure, health and wellness amenities, green rooftop and pocket gardens, child-friendly parks, and al fresco lounges. This comprehensive approach

to modern living brings every Filipino's dream of a good life within reach.

1,345

hectares of Landbank

SMDC takes its role of helping create a nation

of homeowners very seriously. As the Good Guys, they're on a mission to develop sustainable, masterfully planned developments, and being a positive catalyst for substantive change and progress.

In promoting sustainability, SMDC is not just about going green; the company also focuses on the economy, and society. To achieve this integrated lifestyle, regular features at the SMDC developments include Health and Wellness caravans, the Weekend Market for fresh produce and to support local MSMEs, and a Go Green program that encourages practices on how to Reduce, Reuse and Recycle.

Leisure Homes

24

Residential Projects

508

hectares of Landbank

SM Prime's luxury and leisure estates blend seamlessly with nature and embody sound ecological and conservation practices. Seizing opportunities in the Philippines' rich tourism potential, SM Prime creates leisure homes that redefine comfort and quiet luxury in some of the country's prime tourist and leisure destinations.

Benefiting from growing interest in residential purchases in leisure destinations outside Metro Manila, Hamilo Coast in Nasugbu, Batangas, stands out as an ideal property. This seaside haven is nestled between three major mountain peaks and thirteen coves, with three designated as Marine Protected Areas (MPAs), offering

a unique blend of natural beauty and tranquility. Similarly, Tagaytay Highlands takes full advantage of its natural surroundings and climate-friendly setting. This upscale 1,300-hectare development is set against the picturesque backdrop of Taal Lake, featuring themed residential communities with a holistic leisure environment that defines an exclusive lifestyle amid breathtaking views of nature.

Working closely with partners and local communities, both estates exemplify how SM Prime upholds its commitment to environmental stewardship and offers a luxurious and sustainable lifestyle.