SM Prime allots P4.5B for Cebu mall: Developer plans another mall in southern province

Written by Miguel R. Camus / Reporter

Tuesday, 04 May 2010 19:54

SM Prime Holdings Inc., the country’s largest mall developer and operator, is preparing a multibillion-peso spending program to start the construction of two new shopping centers in Cebu this year.   SM Prime president Hans Sy told the BusinessMirror the company is allotting P4.5 billion to build the larger of the two malls which will rise on the recently acquired 28-hectare lot within the reclaimed 240-hectare South Road Properties (SRP) in Cebu City. The new SRP mall, still unnamed at this point, will feature 250,000 square meters (sq.m.) of gross floor area; much larger than SM City Cebu which opened its doors to the public in 1993. Sy further disclosed that the company is signing “very soon” a deal to develop another property in the island. He said SM Prime is already drawing up plans to build a mall with 50,000 sq.m. of gross floor area. He refused to disclose further details. Both malls are expected to start construction within the second half of the year. “The [SRP mall] should be completed by 2012. It will be similar to the SM Mall of Asia [in Pasay City],” Sy said in a recent interview. He added that the second location could be completed sooner.   What will eventually amount to three SM malls in the fast-developing Visayan province may not be enough for the shopping center giant, he added.   “There is opportunity to have some more malls. Cebu is a very strong area in terms of  [sales] performance,” shared Sy. The P4.5-billion budget for the SRP mall represents almost a quarter of the P20-billion spending program that SM Prime has allotted for its SRP development project over the next eight years. Apart from the shopping center, also being planned are a 60,000-sq.m. convention center as well as hotels and condominium buildings possibly to be constructed under SM Development Corp. (SMDC), the listed middle-income condominium developer of the SM Group. In a separate interview, SMDC president Rogelio Cabuñag said while almost all its projects are in Metro Manila, it is open to building in Cebu.   “[SM Prime] has been offering us this Cebu project, [so] we will take a look [at it]. The project will probably be located somewhere close [to the SRP mall]. But they should have the mall before we start moving in,” Cabuñag told the BusinessMirror. SM Prime is also exploring “possible partnerships with interested parties for other developments outside the mall.” The SRP property was acquired for P11,000 per sq.m. for a total price of almost P3 billion. Apart from SM Prime, Filinvest Land Inc. also owns a property within the SRP site. SM Prime last week announced a 10-percent increase in its first-quarter net income to P1.9 billion while revenues grew 15 percent to P5.4 billion. Rental fees continued to account for the largest share, or P4.6 billion of the earnings. This year, SM Prime plans to spend P12 billion to launch four new malls in the country and one in China. The company expects to have a total of 44 malls by the end of the year, of which 40 will be in the country and four in China.