Vol. XXII, No. 68 [ BusinessWorld Online ]
Wednesday, October 29, 2008 | MANILA, PHILIPPINES
CEBU — Mall developer SM Prime Holdings, Inc. is looking at a 20-hectare lot within the South Road Properties for a planned shopping mall, hotel and two information technology (IT) buildings.
SM Prime President Hans T. Sy said they were in talks with the Cebu City government, which owns the properties, through the latter’s marketing arm, the Cebu Investment Promotions Center (CIPC).
"Negotiations are still going on... We’re still keeping our lines open," Mr. Sy said in an interview during the launch of the north wing of SM City Cebu.
SM Prime originally expressed interest to develop the entire 300-hectare reclaimed property.
But the local government wanted to sell the lots to several entities who will develop large chunks of the property into industrial, commercial, tourism-oriented and mixed-use blocks.
So far, Cebu City has received an unsolicited proposal from Filinvest Land, Inc. to develop about 50 hectares of the South Road Properties.
"What we wanted before was not okay. But it’s fine because we have this crisis now, although we’re not affected by the crisis," Mr. Sy said.
"We are very much on track and we are still continuing with our expansion program," he added.
He said SM would build a mall on the 20-hectare lot. The company plans to introduce a mixed-use development in the area.
"Definitely, [we will build] a mall and we’re looking at other developments. We’re always open for possibilities," he added.
CIPC Managing Director Joel Mari S. Yu said SM Prime officials had told him that the company would immediately build a mall, a hotel and two IT towers as soon it buys the lot.
"That mall will be the second biggest in the Philippines, next to the Mall of Asia. I asked them where this confidence is coming from and they assured me that they know what they’re doing," he said.
If things go as planned, SM Prime might submit its unsolicited proposal to the city government in the first quarter of 2009, he said.
The city government’s joint venture selection committee, created to evaluate unsolicited proposals to develop the South Road Properties, is now evaluating the Filinvest proposal.
Filinvest wants to buy a 13-hectare lot for about P2 billion and jointly develop it with the local government into a mixed-use commercial center that will include recreational facilities, residential condominium and IT buildings.
Mr. Yu said they hoped a bidding would be held before the end of the year to accommodate other developers who might offer a better deal.
The sale and development of the South Road Properties will allow the Cebu City to pay amortization and interest for a P5-billion loan from the Japan Bank for International Cooperation.
It obtained the loan to reclaim the property, which has since been registered as a special economic zone with the Philippine Economic Zone Authority. — Marites S.Villamor
