SM mulls building another commercial center in Cebu

SM Prime Holdings, Inc. (SMPHI) is currently in search for a three-hectare property in Cebu for its planned SM Supercenter Hypermart in Cebu.

SMPHI president Hans Sy said that the company would want to buy a strategic location around Cebu of at least three-hectares, after SMPHI failed to win the bid offered by Cebu Province to dispose its 2.85-hectare Banilad property, formerly the location of Cebu International School and Cebu Tennis Club, for commercial use on a Build-Transfer-Operate (BOT) scheme.

The Cebu SM Supercenter and Hypermart will have a huge supermarket, or grocery component, while it will also be open for retail merchants.

"We are hoping to develop a Supercenter and HyperMart in Cebu," Sy said in an interview.

However, Sy declined to further elaborate on this plan to build another commercial center in Cebu, but he mentioned that the SM Group is bullish of the retail industry in the Philippines, including Cebu.

Sy mentioned that the increasing dollar remittances to the Philippines, from the Overseas Filipino Workers (OFWs), and the growing number of call center workers, are the two main drivers of the Philippine economy.

The increasing dollar remittances in the Philippines, which is projected to grow P2 billion to P3 billion more annually, is seen to uplift the purchasing power of the Filipinos. He added that the increasing number of call center workers is also one of the primary markets for retail in the Philippines.

Last year, the dollar remittances that came in to the Philippine economy reached P10.5 billion.

Aside from OFWs and call center agents, tourists are also great contributors to push consumer demand in the Philippines.

Although he said that the company is currently in negotiations with two International hotel chains to pursue the construction of its unfinished hotel project in Cebu, he expressed stronger interest in investing in another commercial project in Cebu.

The company's SM City Cebu has started a P200 million to P300 million expansion project, a two-level annex, an extended mall set to commercially open in May next year.

SM City Cebu owns about 18-hectare property at the North Reclamation Area, this already include the area where the unfinished hotel is built. The main SM City Cebu mall has utilized about 13 hectares.

Last year, SM City Cebu registered a double-digit sales performance, amid the country's "perceived" economic struggles, coupled with political instability.

Recently, the SMPHI opened its most expensive and largest shopping center ever built in the Philippines, the 400,000 square-meter size Mall of Asia. According to Sy, the establishment of the P6.5 billion Mall of Asia is the group's gesture of positive outlook in the Philippine economy.

"The Philippines is here to see a better economic future," Sy concluded.