Posted on June 07, 2015 09:52:00 PM [ BusinessWorld Online ]
By Krista A. M. Montealegre, Senior Reporter
AS PRIME real estate lots become scarce, the SM Group is seeking more reclamation deals undiscouraged by the snags hounding its P104-billion twin projects along Manila Bay.
THIS PHOTO taken on Jan. 7 shows the world-famous Manila Bay sunset. SM Prime Holdings, Inc. President Hans T. Sy said the property conglomerate is undiscouraged by the snags hounding its P104-billion twin projects along Manila Bay. -- BW FILE PHOTO
“We kind of did a study all over the country, where the shallow parts are. We filed applications in a couple of them,” SM Prime Holdings, Inc. President Hans T. Sy said in an interview, but declined to identify those areas.
Mr. Sy is cognizant of the unwieldy process involved in those deals, citing the conglomerate’s experience in Cebu where its reclamation contract languished for 20 years before being awarded.
“We’ll just keep on trying. Will I get it in my lifetime? We’ll just continue,” Mr. Sy said.
“In the end, we want to prove to the government or to the people what we’re trying to do for the country.”
The SM Group’s move to reclaim land is part of a global trend towards coastal development, according to Claro dG. Cordero, Jr., head of research and valuation at real estate advisory firm Jones Lang LaSalle.
“Coastal development affords unobstructed view of the coast and provides a premium on land valuation,” Mr. Cordero said in a mobile phone message.
“Coastal development also provides a general picture of the local property market (mainly outside Metro Manila), where prime lands for development is getting scarce -- either because of the maturity of developments in prime areas or the lack of new prime/developable areas due to improper land use planning or lack of infrastructure to support more inland developments,” he said.
The SM Group has won three reclamation deals over the last two years, the latest of which is a P138-billion project in Cordova, Cebu.
“We’d rather look into that in the future. We let it go through its natural course. If it gets approved then it gets approved. There’s still a lot of process but at least we have our foot into it,” Mr. Sy said.
The cities of Pasay and Parañaque in 2013 and last year, respectively, both awarded to the SM Group separate contracts to reclaim and develop around 300 hectares each along Manila Bay under their jurisdiction for P54.5 billion and P50.19 billion, respectively.
The SM Prime proposal is now with the Philippine Reclamation Authority, which was supposed to endorse the project to the National Economic and Development Authority for final approval.
Finding land for reclamation is not an easy task, Mr. Sy said.
“In the Manila Bay, when you stand by the seashore, the ships are a few kilometers away. What does that mean? It’s very shallow. That’s the only one that can justify a reclamation [project]. If you choose another area that’s very deep, it doesn’t make sense anymore,” he said.
The SM Prime executive dispelled environmental concerns that come with reclaiming land.
“We will not carve out a mountain system and drop it into the sea. You get it from the sea bed and lump them together. It doesn’t destroy the ratio of matter and water,” he said.