Property, banking and retail propel conglomerate’s further growth

With its core businesses in banking, property and retail delivering solid growth in the last five decades, SM Investments Corporation (SM) continues to expand its footprint in the country as the Philippines offers considerable potential for long-term development. To achieve tile next phase of growth, SM embarked on a transformational merger of all its property companies and real estate assets under SM Prime Holdings, Inc. (SM Prime).

This property merger will allow the company to tap into a larger land bank and employ an integrated development approach for larger-scale projects. Its properties now span diverse sectors of mall, office and residential development, as well as hotels and convention centers.

Corazon Guidote, SM Senior Vice-President for Investor Relations, said that one of the main strategies of the property business is to harness synergies, build scale and create greater convenience for communities with master-planned mixed use projects. The 60-hectare Mall of Asia (MOA) Complex in Pasay City is an example of how commitment, taking on a long-term position, proper planning and execution on a development can unlock significant value not just for shareholders but for the whole community. In less than a decade, the MOA Complex now has the SMX Convention Center, a state-of-the-art MOA Arena, and the offices and residences, living proof of a highly synergistic and well integrated complex.

In China, SM Prime continues to expand in second to third-tier cities. It will open this year the 154,900 sqm SM City Zibo located in the heart of Shandong province with a population of four million and bordered by tourist cities. Soon, SM will also open SM City Tianjin, in China’s latest ecozone, with an estimated 540,000 sqm and will be the largest mall in SM Prime’s China portfolio.

Banking is another major driving force for SM. Both of SMIC’s banks – BDO Unibank, Inc. and China Banking Corporation – are leaders in the local banking industry. Based on assets, BDO is the largest in the country, while China Banking Corp. is the fifth largest. BDO continues to build on its primary business strengths in order to capitalize on new opportunities and further solidify its market leadership. For its part, China Bank aims to grow further by generating value from network expansion, strengthening its relations and will continue to focus on the middle class consumers and SME markets, among others. Guidote said that the growth strategies for SM’s banking business are anchored on scale advantage and prudent balance sheet management. It also continues to innovate through the introduction of new products and services to meet customer demand.

SM Retail continues to be a market leader in the Philippines with its chain of department stores and supermarkets nationwide. Its food retail business is on an aggressive growth track, offering various store formats which aim to penetrate the informal sector in both urban and rural communities. The SM Store, on the other hand, will continue to introduce fresh concepts and increase its stores nationwide through the expansion of SM malls in the provincial areas, all supported by the growth in consumer spending.

SM has also entered into joint ventures to grow the food retail sector faster. SM recently partnered with Double Dragon’s City Mall Commercial Center, Inc. to put up community malls in the country which provide an opportunity for its supermarket chain. SM also has a partnership with Walter Mart which has a wide chain of supermarket and appliance and furniture brands housed in its own community malls.

In the coming years, SM is well positioned to cater to a more vibrant market amid intensifying competition and is gearing up for higher growth in an increasingly global oriented economic and business landscape.