SM Prime open to joint venture for 240-hectare Cebu City project

MANILA, Philippines - SM Prime Holdings Inc., the country’s biggest mall operator, said it is open to forging partnerships with other entities to develop a mixed-use complex within the 240-hectare South Road Properties (SRP) in Cebu City, estimated to cost around P20 billion.

In a disclosure to the Philippine Stock Exchange, SM Prime executive vice-president Jeffrey Lim said the company has put forward an offer to acquire a 28-hectare property within the SRP for P11,000 per square meter or a total of nearly P3 billion. The SRP is a land reclamation project led by the Cebu City government.

Lim said initial project development cost would be around P20 billion over a 15-year period subject to prevailing market conditions.

Preliminary plans for the property involve the development of a shopping mall with a floor area of 25 hectares, convention facility, hospital, schools, hotels and high-rise residential condominiums. The proposed commercial center will likely be a smaller version of the 60-hectare Mall of Asia complex along Roxas Boulevard.

SM Prime, the shopping mall unit of the Sy family, said it expects to conclude a deal with the Cebu City government by January next year.

Aside from SM Prime, Filinvest Land Inc. is also developing 50.6 hectares of the SRP into a mixed-use complex. The project will be developed in four phases over a 20-year period, with FLI contributing the development costs as well as the marketing and management services.

Another 10.6 hectares will be purchased outright by FLI, which will be transformed into commercial or retail spaces, offices and condominiums, and hotels.

FLI’s masterplan for the SRP is now being finalized, with the first project expected to be launched by yearend or early 2010.

Meanwhile, SM Prime is allotting P12.1 billion for the opening of eight new malls in the Philippines and in China next year.

Among the sites identified for mall construction are Calamba, Laguna; Masinag, Antipolo; Tarlac; Novaliches and San Pablo, Laguna which are expected to provide 279,228 square meters in gross floor area.

Three new malls in China – Chonggqing, Suzhou, and Zibo – are targeted for opening between 2010 and 2012, adding to SM Prime’s three existing malls – SM Xiamen, Jinjiang and Chengdu.

SM Prime expects a total network of 41 malls by end-2010 with total gross floor area of 4.8 million square meters or 6.2 percent higher than the estimated 2009 GFA of 4.5 million square meters. Its malls currently have a foot traffic of over 2.5 million per day.