Starmalls to sell shares to fund expansion

MANILA, Philippines - Starmalls Inc., the mall and office leasing unit of the Villar family, is looking to raise fresh capital next year to support its expansion program.

The listed firm plans to increase its public ownership through a share sale, following up its P2.3-billion loan deal in October, its top official said.

Depending on market sentiments, the company might sell additional shares next year, Starmalls chairman Manuel B. Villar Jr. said in an interview.

Villar said prominent Thai mall developer Land & House, which owns an 11-percent stake in Starmalls, is a potential buyer for the planned follow-on offering. Land & House owns the biggest home depot in Thailand, making it a model for the Villar family’s All Home brand. “We might also sell shares to the public,” Villar said.

Starmalls has a public float of 12.85 percent, slightly above the 10 percent required by the Philippine Stock Exchange.

Proceeds from the share sale will bankroll the development of new malls, the next batch of which will be in Iloilo, Cagayan de Oro, Malolos and Davao Oriental.

“Retailing is getting stronger. Starmall is doing alright and it is very sharp,” Villar said.

Last year, Starmalls announced it is spending P15 billion to expand malls nationwide in the next five years, particularly in the Visayas and Mindanao.

In October, Starmalls signed a P2.7-billion, seven-year loan agreement with Rizal Commercial Banking Corp. of the Yuchengco group.

To date, Starmalls is putting up numerous new malls and one business process outsourcing (BPO) that will start operations next year.

Starmalls, formerly Polar Property Holdings Corp., has shopping centers in Mandaluyong, Taguig, Daang Hari, Imus in Cavite, Sta. Rosa in Laguna, San Jose del Monte in Bulacan and Cebu.

For the office segment, the listed firm is banking on continuous demand from the BPO industry. So far, Starmalls’ Worldwide Corporate Center in Mandaluyong is fully occupied by BPO tenants.

The local BPO industry is expected to generate $16 billion in revenues this year before hitting $25 billion in 2016, data from the Information Technology and Business Process Association of the Philippines showed.

Last year, Polar Property and Manuela Corp., both controlled by the Villar family, merged their resources and operations via a share-swap transaction.

Manuela opened its first shopping mall in Las Piñas City in 1979 and three other malls between 1982 and 1996: Starmall Las Piñas Annex, Starmall EDSA in Mandaluyong and Starmall Alabang in Muntinlupa. However, it was forced to undergo corporate rehabilitation following the Asian financial crisis.

In 2008, the Villar family took over the management of Manuela, which exited corporate rehabilitation last year.