Sy family-owned property developer SM Prime Holdings Inc. will open up to five malls this year, including the large-scale SM Seaside Cebu, in line with the company’s five-year blueprint to double its portfolio by 2018.
Hans Sy, SM Prime president, told reporters last week that the company is catching up to open the 430,000-square meter (sq m) SM Cebu by November this year to close the year with five new malls in the Philippines.
“Yes, we’re on track [with our five-year plan]. I should say that this year, we will have four new malls. Hopefully, five… [SM Cebu] is actually a very big project. It is targeted to open by end of November,” Sy said.
“Since it’s a destination mall, I really want to do it very well… I think we’re going to be very proud of that project,” he added.
Other than SM Cebu, Sy said the other four malls slated to open this year are: the 40,000-sq m SM Megacenter in Cabanatuan sometime this month; SM San Mateo; one in Sangandaan, Quezon City; and the main SM Cabanatuan mall, set to open by the end of the year.
“So at least these four are sure. For the fifth one, it is [SM Cebu] at SRP (South Road Properties) which I wanted to make sure that it’s going to be a good present offering,” Sy said.
Sy noted that the upcoming SM Megacenter in Cabanatuan is “an acquired mall,” bought sometime last year, noting that they are continuously scouting for other strategically located established malls to be “acquired and rebranded.”
“First thing we look into is the location. It’s all about location. If the location is good, chances are it’s not limited to price alone. Because sometimes, the property is cheap but if it’s not a good location, then it’s still no good,” Sy said.
Asked if they plan to shift to the acquire-and-rebrand strategy instead of the traditional build-from-scratch method, the SM Prime president said they will continue to do both, depending on the location.
In China, SM Prime is set to launch two malls this year—SM Zibo for a grand launch March or April after its soft opening last year, as well as the 530,000-sq m SM Tianjin by end-2015.
This year, Sy said expansion has been ongoing at the SM City Iloilo, SM Mall of Asia and SM Center Molino to increase leasable retail space by next year.
The three existing malls—as well as SM North EDSA, Bacolod and Taytay—are some of the malls programmed for a P10-billion expansion that started last year to increase retail capacity to compete with other commercial centers present in each area.
The five-year roadmap envisions SM Prime’s malls expanding to 85 by 2018 from 48 in 2013—74 in the Philippines and 11 in China. The malls’ gross leasable area (GLA) will also climb to 11 million sq m from 7 million sq m in 2013.
The company said it is also “on track” with its five-year plan to double its 2013 net income, revenues and product portfolio by allocating a capital expenditure of P400 billion from 2014 to 2018. If all goes to plan, SM Prime’s existing malls, offices, hotels and other leisure-related developments will double by 2018.
SM Prime booked a consolidated net income of P18.4 billion last year, up 13 percent from 2013’s P16.72 billion, while its consolidated revenues advanced 11 percent to P66.2 billion from P59.79 billion a year earlier.