MANILA, Philippines – The mall and shopping units of conglomerate SM Investments Corp. (SMIC) have entered into a joint venture with a Luzon-based shopping mall and supermarket chain, further intensifying competition in the country’s retail sector.

“SMIC, through its subsidiaries SM Retail Inc. and SM Prime Holdings Inc., have entered into a joint venture with Watermart Group of Companies,” SMIC said in a disclosure.

“We have signed a joint venture with Waltermart subject to due diligence and further negotiation,” Jeffrey Lim, executive vice-president and chief finance officer of SM Prime, said in a text message.

Lim said the company will first complete the due diligence prior to disclosing more details.

Waltermart is into shopping malls and supermarkets business. To date, it has 17 community malls and shopping centers in Batangas, Bulacan, Cavite, Laguna, Makati, Nueva Ecija, Pampanga, Parañaque and Quezon City.

SM Retail, for its part, added 25 new stores composed of five SM department stores, four SM Supermarkets, four SM Hypermarkets and 12 SaveMore stores in the nine months to September. As of end-September, the group now had a total of 193 stores while mall operator SM Prime had 46 malls in the Philippines with a gross floor area of 5.5 million square meters.

“Waltermart is into the retail business mostly in provinces so [the joint venture deal] is a channel to reach other market categories,” Freya B. Natividad, investment analyst at brokerage firm 2Trade-Asia.com, said in a phone interview.

SMIC likely targets the D and E market segment while saving on costs by partnering with Waltermart’s existing malls, Natividad said.

Consumer-related businesses, particularly shopping centers and supermarkets are expanding their portfolio driven by continuous growth in the consumption-driven Philippine economy.

Lucio Co-led grocery chain Puregold Price Club Inc., for instance, is branching out in Mindanao with the opening of its flagship store in Cagayan de Oro and an S&R Membership Club in Davao as part of plans to hit 200 stores before 2015.

Other major players in the malls and supermarket segments like Gokongwei-led Robinsons Land Corp. and Ayala Land Inc. have likewise programmed expansion projects.