By Richmond S. Mercurio (The Philippine Star) | Updated July 6, 2015 - 12:00am
MANILA, Philippines - SM Prime Holding Inc. and Ayala Land Inc. (ALI) – two giants in the Philippine real estate industry – will embark on more projects together as a sign they have indeed buried the hatchet from years of rivalry and legal feud.
“We will continue to explore partnerships if the project is big enough for our combined expertise and resources,” SM Prime executive vice president Jeffrey Lim told The STAR.
SM Prime is approaching its collaborations with ALI as means of exploring more opportunities for growth.
“Collaboration is more beneficial to both rather than competing,” Lim said.
As former bitter rivals, the real estate units of the Sy family and the Ayalas are now partners in not just one but three business ventures.
The two firms’ reconciliation began in November last year when they entered into a partnership agreement for the Ortigas family’s holding firm that put an end to a two-year squabble.
Aside from the Ortigas feud, the SM and the Ayala groups have also battled in the railway common station in Quezon City and the proposed Manila Bay reclamation project.
The two firms in February this year again teamed up to form a powerhouse consortium called Trident Infrastructure and Development Corp. with Aboitiz Equity Ventures Inc. and Megaworld Corp. The team would bid for the P123 -billion Laguna Lakeshore Expressway and Dike Project.
Just last week, SM Prime and ALI further solidified their tandem when they announced that they have won the bidding for a 26-hectare lot located at the reclaimed South Road Properties in Cebu City.
The SM-ALI Group will co-develop the property upon completion of a joint master plan.
“We will masterplan it jointly with the SM group so we can take advantage of the unique features of the property and leverage on the key strengths of both groups in the areas of retail, entertainment, hotel, office and residential uses,” ALI senior vice president Jimmy Ysmael said
“The masterplan when completed will enable us to determine the investment requirement for the overall development,” Ysmael said.
Together, SM Prime and ALI have a combined market capitalization of over P1 trillion.
Although more alliances between SM and Ayala groups would be a tough challenge to overcome for smaller competitors, local property developers still believe a team-up between these two powerhouses will be a big boost to the local property scene. “I think the projects that they are collaborating in are really big ones. For me, I think it’s still okay. In other countries it may be not because they have stricter antitrust law. But it’s a good thing now that Ayala and SM are now willing to work together because once upon a time they were at odds with each other. I just hope they leave some for smaller developers like us,” said Januario Jesus Atencio, president and chief executive officer of listed mass housing developer 8990 Holdings.