THE PROSPECTIVE joint venture between two units of SM Investments Corp. (SMIC) and “community shopping center” operator Waltermart Group of Companies that is expected to be sealed this semester is seen to further grow the latter’s branch network under current management, senior officials of the conglomerate said late last week.

“We’ll both be in it, it will be 50-50. But they’ll (Waltermart Group) still do the management,” Teresita T. Sy-Coson, SMIC vice-chairman, told reporters last Friday on the sidelines of the annual reception for the banking community at the central bank compound in Manila when asked for updates on the partnership of SMIC units SM Prime Holdings, Inc. and SM Retail, Inc. with Waltermart Group.

“It will still be Waltermart, but it will expand,” Ms. Sy-Coson said when asked how the joint venture would affect current Waltermart branches.

“I don’t know by how many. It’s still too new to say, and we’re still discussing, we’re still planning. When we put things together, that’s when we can say how many,” she said.

‘A GOOD JV’

Last Jan. 7, SMIC announced that its mall and retail units, SM Prime and SM Retail, respectively, signed an initial deal with Waltermart Group for a joint venture, but no details were given, pending further negotiations and due diligence transactions.

Waltermart Group is the company behind Walter Mart Malls — a chain of so-called “community shopping centers” operating in Luzon — as well as Walter Mart Supermarket, Abenson Appliances, Homeplus Furniture, Electroworld and SB Furniture, according to the group’s Web site.

Waltermart Group now operates 17 community malls throughout Luzon, four of which (Sucat, Makati, North EDSA and E. Rodriguez) are located in Metro Manila.

Ms. Sy-Coson declined to cite how much the SM Group will be sinking in the partnership, but said her family will be working closely with the Lim clan, owners of Waltermart Group.

“I don’t know. I’m not a figures person, but all I can say it’s a good JV (joint venture). Our families will be working together and it will be like merging the families and the businesses. So it will be like two groups of investors working together,” she said without elaborating.

Jeffrey C. Lim, SM Prime executive vice-president and chief financial officer, said that the tie-up is expected to be inked by June as discussions with Waltermart are still underway.

“We’re still doing due diligence, but there should be synergies with Waltermart, which is known for its smaller, community malls,” Mr. Lim said on Wednesday last week on the sidelines of a Financial Executives of the Philippines meeting and induction ceremonies at the Makati Shangri-La hotel.

“I think this should take six months. Once we’re done, we will announce,” Mr. Lim added.

“We’re still discussing with them (Waltermart Group), so I cannot disclose anything yet. We’re discussing in terms of what we’ll be doing as partners.”

EXPANDING

SM Prime was incorporated in 1994 to develop, conduct, operate, and maintain the SM group’s commercial shopping centers and related businesses.

As of end-2012, SM Prime counted 46 local malls and five China malls in its portfolio, with a total combined gross floor area of 6.3 million square meters.

SM Retail, SMIC’s unlisted retail arm, meanwhile, counted 46 department stores, 37 SM Supermarkets, 34 SM Hypermarkets, and 76 SaveMore stores in its total portfolio as of end-September.

It is looking to bring in two foreign clothing brands to the country this year to boost its fashion portfolio currently consisting of brands Forever 21 and Uniqlo.

SMIC is the listed holding company of the SM Group, with interests in shopping mall development, retail merchandising, financial services, real estate development and tourism, as well as hotels and conventions.

The conglomerate had earmarked a record P65 billion in capital spending this year, up from P56.80 billion in 2012, mostly for its flagship mall and condominium development units SM Prime and SM Development Corp.

Shares of SM Investments gained P27.00 or 2.87% to close at P967.00 apiece on Friday last week from P940.00 last Thursday, while those of SM Prime added six centavos or 0.36% to P16.60 from P16.54. — Franz Jonathan G. de la Fuente