SM Prime Holdings, Inc. remains upbeat on its shopping mall business, noting that the country is not facing an oversupply of malls yet.
SM Supermalls Chief Operating Officer Steven Tan called the retail sector “very vibrant,” citing the shopping mall’s shift to being a more experiential place.
“It’s more exciting now more than ever. I was asked if there was a surplus already, but no we’re still enjoying. For example, SM North EDSA is 99% occupied. I don’t really see that as it poses a threat or a problem,” Mr. Tan said in an Dec. 7 interview on the sidelines of the opening of the North Towers, a new segment of the company’s SM North EDSA mall in Quezon City.
For instance, Mr. Tan said the company included an “experience zone” in the newly-opened North Towers to give shoppers a place to hang out.
“It’s not your usual mall where people go shopping, it’s really more like hanging out. There’s a lot of restaurants, we created an experience zone, lots of games,” Mr. Tan explained.
North Towers is an expansion of SM North EDSA, making it the country’s second largest mall next to SM Mall of Asia. It is one of the 72 SM malls in the Philippines, the latest of which is located in Eastern Visayas called SM Center Ormoc. The company also has seven malls in China.
The property unit of country’s richest man Henry Sy, Sr. plans to end the year with 9.6 million square meters of retail space across its local malls. By 2019, the company targets to have 10.5 million sq.m. of gross floor area in the country, further increasing it to 10.8 million sq.m. in 2020.
The listed firm’s expansion is now geared toward the provinces, as it seeks to take advantage of the economic growth opportunities in the regions.
“Our expansion program should allow us to sustain double-digit growth over the next three years. The growth will be driven by malls and residential operations complemented by our other businesses,” the company said in a presentation posted on its website.
SM Prime’s shopping mall unit contributed 58% of its revenues in the first nine months of 2018, following by the residential business at 34%.
The company booked a net income attributable to the parent of P23.44 billion in the first nine months of 2018, 17% higher than the P20.05 billion it made in the same period a year ago. Gross revenues meanwhile went up 15% to P74.56 billion during the nine-month period.
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