Manila, Philippines - Unfazed by the tension between China and the Philippines over disputed waters off the West Philippine Sea, SM Prime Holdings Inc. is looking to acquire five more properties in China to support its aggressive expansion in the world’s second biggest economy.
SM Prime chief financial officer Jeffrey C. Lim said the company sees vast opportunities in China given its growing population and emerging middle class.
He said China is the group’s second-biggest market and would rather build its presence in the fast-growing China market for now than experiment with new ones.
He added that the group wants to reach out to new markets, noting that most of these properties are located in Fujian province where SM Prime already operates SM Xiamen and SM Jinjiang.
Apart from Xiamen and Jinjiang, SM Prime also operates in two other China locations – Suzhou and Chengdu.
SM Prime currently has four malls in China, which pitched in P620 million in revenues or nine percent of the group’s total revenues. Combined net income of these malls amounted to P140 million, up 44 percent, contributing five percent of SM Prime’s total profit.
The expansion projects are part of the SM Group’s strategy to list its China assets either in Hong Kong or Singapore by 2015 in a public offering that could fetch up to $500 million in proceeds.
Lim said SM Prime is still pushing through with its expansion plans for China even as the Chinese government warned the Philippines of not undermining its ability to protect its sovereignty with respect to the disputed Panatag (Scarborough) Shoal.
China has repeatedly said the disputed area is an inherent part of its territory and that the surrounding waters are historic fishing areas.
Meanwhile, Lim said SM PRIme will raise P7 billion from the issuance of corporate notes next month to be underwritten by First Metro Investment Corp.
The notes will have a maturity of five, seven and 10 years.