SM Prime allots P8B for China expansion

By Arra B. Francia
Senior Reporter

SM Prime Holdings, Inc. is boosting its presence in China, with the investment of up to P8 billion for the construction of a new mall and the expansion of an existing mall.

SM Prime President Jeffrey C. Lim said construction on the company’s eighth China mall, which will span around 80,000 square meters (sq.m.), will start later this year.

“We will start constructing another one within the year, that’s SM Yangzhou,” Mr. Lim told reporters on the sidelines of a media and analyst’s briefing in Pasay City Tuesday.

The listed property developer will be spending about P4 billion over the next two years for SM Yangzhou.

Mr. Lim added the company will also expand SM Xiamen by another 60,000 to 70,000 sq.m., from its current size of 300,000 sq.m. The expansion cost is valued at about P3-4 billion.

“We will start this year but I think it will open in the latter part of next year or 2021,” he said.

Once SM Yangzhou’s construction and SM Xiamen’s expansion are completed, the company will have more than a million square meters in gross leasable area in China.

SM Prime’s other malls are located in Tianjin, Jinjiang, Chengdu, Suzhou, Chongqing, and Zibo.

The company noted that expansion efforts in China slowed in the past two years as it focused on the growing opportunities in the Philippines.

“This is the best time (to expand in China) after the one in Tianjin is well-managed and well organized, we can now move to the next mall. In China, we moved a little bit slower but the sizes of the malls there are very big,” SM Prime Chairman Henry T. Sy, Jr. told reporters in a separate interview.

The investments for China is part of SM Prime’s P80-billion capital expenditure for the year, which will support the expansion of its malls, residential properties, and land banking efforts.

In the Philippines, SM Prime will add four new malls covering 200,000 sq.m. in gross floor area this year. These are SM Center Dagupan in Pangasinan, SM City Olongapo Central in Zambales, SM City Butuan in Caraga, and SM Mindpro Citimall in Zamboanga.

Meanwhile, Mr. Sy said SM Prime is looking at opportunities to expand its mall business to other Asian countries, particularly Vietnam.

“We are land banking not only in China, we are thinking of land banking in other Asian countries also. Like for example, Vietnam,” Mr. Sy said, adding SM Prime could start building malls in other countries within the next two years.

For its residential segment, SM Development Corp. said it plans to launch 19,000 to 25,000 units in Metro Manila and in the provinces.

The group will also unveil the National University Tower, a university-office building located inside the Mall of Asia complex, as well as two new hotels in Iloilo and Quezon City under the Park Inn by Radisson brand.

SM Prime’s net income jumped 17% to P32.2 billion in 2018, following a 14% increase in consolidated revenues to P104.1 billion.

Shares in SM Prime climbed 1.78% or 70 centavos to close at P39.95 each at the stock exchange on Tuesday.