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SM Prime on the hunt for commercial centers

Posted on March 01, 2015 08:53:00 PM [ BusinessWorld Online ]
By Krista A. M. Montealegre, Senior Reporter

SM PRIME Holdings, Inc. is on the lookout for the acquisition of established commercial centers to accelerate the nationwide expansion of its malls.

SM Prime President Hans T. Sy told reporters last week SM Megacenter in Cabanatuan is one of the four to five malls that the Henry Sy-led property holding firm intends to open this year.

Formerly known as Megacenter The Mall, the commercial center with a gross leasable area of 40,000 square meters was acquired by SM Prime last year but Mr. Sy declined to provide more details about the transaction.

“We’re open to buy existing malls and rebrand it, just like the one in Cabanatuan. Over there, everybody knows it’s Megacenter. I didn’t really rebrand it… I just put SM,” he said.

SM Prime has a team that is “scouting around especially those smaller malls” for acquisition or joint venture,” Mr. Sy said.

“It’s all about location. If the location is good, big chances we will [acquire it]. It’s not limited on price alone,” he added.

The acquisition of Megacenter follows the SM Group’s partnership with the Waltermart Group of Companies, which operates supermarkets and shopping malls, in 2013.

Besides the launch of the acquired mall, SM Prime is also opening a new mall in Cabanatuan as well as in San Mateo, Rizal and Sangandaan, Quezon City this year. The company is hoping to roll out a shopping center in South Road Properties in Cebu with 430,000 square meters in floor space available for rent.

“It’s a very big project. It’s targeted to open by end of November but since it’s a destination mall, I want to do it very well,” Mr. Sy said of the mall in Cebu.

Likewise, SM Prime is “still trying” to launch its mall in Tianjin -- which has a gross leasing area of 530,000 square meters -- this year, while the opening of the Conrad Hotel in the Mall of Asia complex is set before yearend, “but not in time for the [Asia-Pacific Economic Cooperation Leaders’ Summit in November].”

By April, SM Prime will unveil the consolidated master plan for reclamation projects in the cities of Pasay and ParaƱaque with a combined size of 600 hectares, Mr. Sy said. The company had said it would spend over P100 billion for the reclamation and development of the two huge parcels of land.

Mr. Sy also dared the government to put up two common stations and let people be the judge. The Transportation department is planning to construct two common stations near SM Prime’s SM City North EDSA and Ayala Land, Inc.’s TriNoma mall.

“Technically, makikita ng tao, maiitindihan ng tao. I would be very assertive. I think if you really look at the technicalities, common station is really common and there’s no other area except in that area [near SM City]. We tried to fix everything… If you have a common [station] where you have to walk for 600 meters, that’s not a common station,” he said.

SM Prime is “on track” to double earnings by 2018 in line with a five-year program entailing a capital spending budget of P400 billion, Mr. Sy said.

The company’s shares fell 2.18% or 44 centavos to close the week at P19.76 apiece.

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