Monday, July 6, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
CEBU CITY — SM Prime Holdings, Inc. is negotiating for the purchase of three properties for the establishment of three more shopping malls in Metro Cebu.
Hans T. Sy, SM Prime president, said the target is to have a second mall in Cebu by 2011.
"We’re in the middle of negotiations. We will come up with some good news towards the third quarter [of this year]. But definitely, we will have at least a second site in Cebu by 2011," Mr. Sy said.
Among the three properties under negotiation is a lot within the South Road Properties (SRP), a 300-hectare property that was reclaimed and developed by the Cebu city government.
Mr. Sy said he hoped to acquire all three properties, each having a size of four to five hectares. Negotiations with the Cebu city government over the SRP started last year. Initially, SM Prime had planned to acquire a 20-hectare property and introduce a mixed-use development similar to that in the Mall of Asia complex.
"If I could [acquire all three], I would. Hopefully, we could do something about SRP," he said. There is presently only one SM mall in Cebu and three others in the Visayas — one in Bacolod in Negros Occidental and two in Iloilo City.
As soon as a deal is closed by the third quarter, commercial development will start immediately, he said. If two or all three properties are acquired, development will be implemented simultaneously. Construction will take between 18 and 30 months.
SM usually starts with small developments, or about 85,000 square meters, but with provisions to expand to 200,000 square meters, Mr. Sy said.
SM recently acquired properties in Davao and General Santos cities in Mindanao. Both malls are scheduled to open in 2011. Two more malls in Luzon are scheduled to open this year. Four others are under construction and scheduled to open next year.
There are now 36 SM malls nationwide.
In China, Mr. Sy said SM Prime would open a fourth mall to be located in Suzhou next year and expand the Xiamen mall toward the end of this year. "China is our growth story five years from now," he said.
SM is eyeing additional malls in second- and third-tier cities there as soon as "brand equity" is strengthened.
In Cebu, SM is focused on completing the Radisson Cebu Hotel, a 400-room upscale business hotel adjacent to the existing SM City Cebu mall, by the end of November this year. The hotel is targeted to be fully operational by December this year.
The proposed SMX Convention Center adjacent to the hotel has been temporarily set aside for lack of parking space, Mr. Sy said.
"The convention center is part of it [hotel development]. But it’s not yet final. We may not have enough space for parking," he added.
Both the hotel and convention center are to be partly funded by the proceeds from the recently concluded P10-billion retail bond offering of the Sy family’s listed holding firm, SM Investments Corp. — Marites S. Villamor
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