Posted on June 05, 2015 07:44:00 PM [ BusinessWorld Online ]
CEBU CITY -- SM Prime Holdings, Inc. is betting big on the Queen City of the South’s growth prospects after hiking its investment in its mixed-used development in the reclaimed South Road Properties.
SM Seaside City is a 30-hectare master planned project that will be home to one of SM Prime’s biggest shopping malls outside Metro Manila, a five-star hotel, convention center, high-rise office, and residential buildings, and an events center.
“For the whole complex, my original budget was around P20 billion, but at the rate we’re going -- it’s getting more exciting -- we may have to raise our budget to P30 billion,” SM Prime President Hans T. Sy told reporters on the sidelines of an exclusive mall preview for tenants.
When asked what triggered the changes in the original plan, Mr. Sy said: “We’re increasing our FAR (floor area ratio) because we felt the demand is going to be there.”
For example, the SM Prime executive said the company plans to build an SMX Convention Center with a size of 25,000 square meters, similar to the size of its existing project in Pasay City. Under the original plan, the company only wanted to build half of that, he said.
So far, SM Prime has invested P7.5 billion to construct the shopping mall with a gross floor area of 470,000 square meters. Once it opens in “end-November,” it will be one the company’s biggest malls in the Philippines behind SM Megamall in Ortigas, SM North Edsa in Quezon City, and SM Mall of Asia in Pasay City.
More than half of the shopping center’s over 400 tenants have been secured already, as SM Prime continues to evaluate other tenants that will set up shop in the mall.
“The trick is the discipline of distributing the tenants. We’re not leasing it out just because they wanted it. We wanted to make sure it will work with our customer base. It’s not all about renting,” Mr. Sy said, noting that they intend to have half of the mall’s tenants to be first-time locators in Cebu.
As for the hotel, SM Prime may either bring in the Conrad or Radisson Blu brands, he added. The company is opening a Conrad Hotel in SM Mall of Asia this year, while it launched Radisson Blu in Cebu in 2010.
SM Seaside City will also host the Seaside Tower, a 114-meter viewing tower offering a 360-degree view of Cebu, and a Sky Garden, featuring dining outlets situated in an elevated park.
“I’ve never doubted Cebu that’s why we have so much investment in Cebu. I am putting a lot of eggs into this project,” Mr. Sy said, noting that the development of the Mactan Cebu International Airport will only add to profits.
It will take another six years to complete SM Seaside City, with SM Prime now on its fourth year of developing the complex, he added.
SM Prime last month was awarded a deal to reclaim and develop land in the town of Cordova here for P138 billion. -- Krista Angela M. Montealegre