SM Prime beefs up presence in Cebu (South Road Properties)

By Zinnia B. Dela Peña (The Philippine Star) Updated July 07, 2009 12:00 AM

MANILA, Philippines – SM Prime Holdings Inc., the country’s largest shopping mall operator, is beefing up its presence in Cebu with plans to acquire three properties to take advantage of the city’s booming tourism industry.

In a disclosure to the Philippine Stock Exchange (PSE), SM Prime said the group is in talks with several parties for the purchase of new properties in Cebu and expects to conclude negotiations with one of them in the third quarter this year.
SM Prime is hoping to put in place its second mall in Cebu by 2011.
One of the properties the company is eyeing is located within the 295-hectare South Road Properties (SRP), which is envisioned to become the single biggest growth driver in Cebu.
The SRP is registered as a special economic zone and was designed for mixed land use that can accommodate light manufacturing, commercial, tourism, information technology and other service enterprises.
Cebu is the Philippines’ main domestic shipping port, and is home to more than 80 percent of the country’s domestic shipping companies. It also holds the second largest international flights in the Philippine Islands, and is a significant center of commerce, trade, and industry in the Visayas and Mindanao regions.
In May, SM Prime opened a mall in Naga City, its first in the Bicol region and 34th nationwide.
Naga City is considered as the nerve center of the Bicol region due to its proximity to large business establishments, universities, hotels, and regional government offices. It is also a transportation hub with the Naga Transport Exchange servicing almost all of the region’s inter-municipality transportation.
For the rest of the year, SM Prime is slated to open SM City Rosario in Cavite, SM City Pamplona in Las Piñas as well as the expansion phase of SM City Rosales in Pangasinan. By year end, the company’s branch network is expected to reach 36 with an estimated total gross floor area of 4.9 million square meters.
SM Prime is also looking at building a mall in Tarlac, San Pablo, Laguna, Calamba; and Commonwealth.
SM Prime has earmarked P12 billion in capital expenditures this year, P6.5 billion of which will be used to expand its operations domestically while the balance of P5.5 billion will go to its expansion in China.
Three new malls in China – Chonggqing, Suzhou, and Zibo – are targeted for opening between 2010 and 2012.
This will add to its three existing malls – SM Xiamen, Jinjiang, and Chengdu.
Suzhou, with a gross floor area of 73,000 sq.m., is under construction and is expected to open early 2010.
While Zibo and Chongqing, which has the biggest population in China) are scheduled to open in 2011 and 2012.