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SM Land merging reclamation projects for 600-hectare CBD

Posted on September 01, 2014 11:13:00 PM [ BusinessWorld Online ]
By Daphne J. Magturo

SM Land, Inc. plans to integrate its reclamation projects in the cities of Pasay and Parañaque to develop a 600-hectare central business district (CBD) worth more than a hundred billion pesos, senior officials of the company’s mother unit told reporters yesterday.

SM Land has contracted international engineering firm Aecom Technology Corp. to draft the master plan for the development at the Manila Bay area, and expects to have a plan within the next three to six months.

The Parañaque and Pasay project areas measure 300 hectares each, with reclamation work alone expected to take three to five years to complete, SM Prime Executive Vice-President Jeffrey C. Lim said after the listing ceremony in Makati City of the company’s P20-billion retail bonds.

SM Prime has become the holding company of SM group’s real estate businesses as a result of consolidation last year.

“The cities have contracted us... and they will have to secure approval and (follow) the process including endorsement from the PRA (Philippine Reclamation Authority) all the way to NEDA (National Economic and Development Authority). We’re just waiting,” Mr. Lim said.

SM Prime President Hans T. Sy said in the same venue that the group is “trying to build a future city” in the area.

“Preferably, we would like the project to be integrated so the outcome will be better. We’re working with them (Aecom) very closely -- we give them the ideas we want -- we now have to justify the whole design, including putting into consideration all the environment issue and climate change issues. All issues should be addressed,” Mr. Sy said.

SM Land previously said it intended to develop the reclaimed land into “a world-class, mixed-use district for business, commercial, and
entertainment
.”

Asked for comment, Antonio Sabarre, Jones Lang LaSalle associate director for Markets, said in a phone interview: “We encourage a new area of development. It’s good for the industry and for the Philippines so we can try and make more CBDs to encourage more investors to come to Manila.”

“It takes a while for the reclamation to be finished, so we hope that when it’s done, there will be more office spaces and roads to build. It widens Metro Manila, in a way,” he said.

On Aug. 13, the Public-Private Partnership Selection Committee of Parañaque City endorsed to Mayor Edwin L. Olivarez SM Land’s unsolicited proposal for its reclamation project.

BONDS UPSIZED
In a statement released also yesterday, SM Prime said it has upsized its maiden bond offering to P20 billion from the initial size of P15 billion, citing “strong demand” from investors.

The issue consists of 5.1000% Series A bonds due 2020, 5.2006% Series B bonds due 2021 and 5.7417% Series C Bonds due 2024.

“The bonds were purchased by a wide spectrum of investors ranging from individuals in the retail market to banks, investment funds, pension funds, insurance companies and other corporate,” the statement read.

The offer period ran from Aug. 13 to Aug. 22, while the issue date was yesterday.

SM Prime has earmarked P60.9 billion in capital expenditure for projects this year, of which P30 billion will go to malls, P24.5 billion for residential, P3.2 billion for commercial, and P3.2 billion for hotels and convention centers.

On Monday, shares of the company gained 30 centavos or 1.85% to close at P16.48 apiece from Friday’s P16.18 finish.
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