SM Prime plans to launch 10 malls next year

SM Prime Holdings, Inc. is on course to reach its target of having a network of 75 malls nationwide, as the property holding firm of the country’s richest man Henry Sy, Sr. plans to double launches next year, a top company official said.

SM Prime President Jeffrey C. Lim said in an interview the integrated real estate developer is busy constructing 12-15 malls at the moment, enabling the company to achieve its five-year road map on schedule.

“We’re looking at ( launching) 10 next year,” Mr. Lim said.

New mall openings are geared towards provincial areas. SM Prime is opening new malls in Cagayan de Oro, Antipolo, Tuguegarao, Palawan and Batangas this year, bringing the total number of SM malls in the country to 65 by end 2017.

Shopping centers in Metro Manila account for 45% of the total malls in the country in terms of gross floor area, followed by Luzon at 35%, Visayas at 14% and Mindanao at 6%.

SM Prime’s expansion drive outside the Philippine capital is part of a broader industry move to venture out of Metro Manila to take advantage of rising disposable income of consumers in the provinces.

“They’ve been very heavy in Metro Manila but there is a lot of competition. There’s a lot of opportunities, especially now that they’re trying to have inclusive growth outside of the big cities with the infrastructure program,” Colliers International Philippines Deputy Managing Director Richard T. Raymundo said.

Mall developers will have to build smaller shopping centers in the provinces, compared to the 300,000 square meters in key urban centers.

“Income and population are not as high and there are certain tenants which will not work in those location, so sizes will be smaller. The population is not as high but there is demand for food and entertainment,” Mr. Raymundo said.

SM Prime delivered an annual 13% growth in earnings to P6.60 billion in the first quarter of 2017 compared to P5.84 billion anchored on the expansion of its shopping mall business.

SM Investments, owned by the country’s richest man Henry Sy, Sr., has core businesses in retail, banking and real estate. The family also has interests in gaming, geothermal energy and infrastructure.