MANILA, Philippines—Tycoon Henry Sy’s SM Prime Holdings Inc. is pilot-testing in Dasmariñas, Cavite, a new shopping center format that seeks to redevelop an existing rundown public market owned by the local government into a pioneering formal retail complex with room for the public vendors.

SM Prime Holdings Inc. executive vice president and chief finance officer Jeffrey Lim told reporters that his company would spend at least P500 million for this pilot project, which would be among the seven new local shopping centers that the group would open this year.

The group is planning a P20-billion fresh capital outlay for this year, mostly for the construction of malls.

The seven new shopping malls this year will make available 400,000 square meters of additional retail space under the vast SM mall empire. This still pales in comparison with the gross leasable space created in 2006 when the company opened five malls, including Mall of Asia, which accounted for 406,961 square meters.

Lim said most of the new mall openings this year would be smaller than the usual SM shopping centers. Aside from the pilot project in Dasmariñas, Cavite, SM Prime is set to open malls in Masinag, Antipolo; San Fernando, Pampanga; Apalit, Pampanga; Commonwealth Avenue, Quezon City; La Consolacion, Cebu; and BF Sucat, Parañaque.

While the malls to be opened this year are smaller than most of SM’s existing malls, they signify SM Prime’s increasing penetration into new markets. The move may also pave the way for more partnerships with local government units (LGUs) on sprucing up public markets into more robust retail centers.

For the Dasmariñas public market project, SM Prime has started construction of the retail center based on a long-term lease contract with the LGU.

SM Prime obtained a concession to operate the center for 25 years, renewable for another 25 years. It will pay the local government unit rental for the use of the property.

The Dasmariñas shopping area will have a gross leasable space of 30,000 sqm. It will be ready for opening by the fourth quarter of this year, Lim said.

He said there would be a “semi basement” with wet and dry sections for vendors. The ground floor will house a hypermarket with some food shops. The second floor will be for third-party tenants and the top floor will be for parking.—Doris C. Dumlao