Tuesday, 3 March 2009

SM to build shopping complex near The Fort

Honey Madrilejos-Reyes
Business Mirror

KNOWN to have a solid reputation of going against any economic downturn, the SM Group controlled by retail magnate Henry Sy is planning to build a P2-billion shopping center in Taguig City by the end of the year.

A BusinessMirror source said the project—to be undertaken by the group’s mall development arm SM Prime Holdings Inc.—would be a part of a commercial complex envisioned to rise on a sprawling property owned by the Taguig government.

The shopping center alone is expected occupy around 1.8 hectares. A hotel project, to be handled by another entity, is also planned within the complex.

“SM is leasing the property from the Taguig government for 25 years,” the source said.

The design of the shopping center is still being finalized but the source said it would more or less cater to the upper market because of its proximity to Ayala’s residential and commercial developments Serendra and Bonifacio High Street. Meanwhile, Ayala’s mall development Market! Market! mostly attracts low- to middle-income customers.

“We expect to complete the shopping center by 2011,” added the source privy to the negotiations.

The SM group’s expansion in Taguig, the source added, indicates its bullish outlook on the country’s fundamentals despite the challenges brought by the global financial crisis.

The Taguig property was part of the donation given by the Bases Conversion and Development Authority to the local government as its share in the Bonifacio Global City project.

Earlier, SM Prime reported a consolidated net income of P6.4 billion in 2008 from P6.0 billion the year before. Revenues, on the other hand, grew 12 percent to P17.8 billion. These results included the operations of the three SM malls in China. The SM China in the mainland are located in the cities of Xiamen and Jinjiang in Southern China, and Chengdu in Central China.

“Notwithstanding the global financial situation, SM Prime achieved its goals and sustained its expansion in 2008,” said president Hans Sy.

Rental fees continued to account for the largest share of SM Prime’s consolidated revenues last year, amounting to P15.4 billion. Bulk of the increase came from additional space in new malls and mall expansions during the year. The new malls were SM City Marikina, SM City Rosales, and SM City Baliwag. Mall expansions were seen in The Annex at SM City North Edsa and The Atrium at SM Megamall.

Put together, the new malls and expansions in 2008 added 9 percent, equivalent to 353,000 square meters (sqm) in gross floor area (GFA) for a total of 4.3 million sqm. The average occupancy rate of the new malls now stands at 9 percent.

This year, the company plans to open SM City Naga in Camarines Sur, SM City Rosario in Cavite, SM City Pamplona in Las Piñas and the Sky Garden at SM City North Edsa. The company is also set to expand SM City Rosales in Pangasinan.

By the end of the year, SM Prime will have 36 malls nationwide and three in China, with an estimated GFA of 4.9 million sqm.

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