SM Prime Holdings Inc., the largest Philippine shopping center operator, plans to build one mall a year in China to tap demand in the world’s fastest growing major economy and reduce the company’s reliance on its home market.

‘We will first start with one a year and as we grow stronger then we will increase that to two, three and maybe four a year,” Hans Sy, president of Manila-based SM Prime, said yesterday in an interview.

‘It won’t be a reckless expansion.” Building malls in China will give SM Prime access to a market with 15 times the population of the Philippines and an economy 23 times larger.

The company has limited scope for expansion at home, where it already operates 30 malls, fund manager Olan Caperina said.  ‘SM Prime is nearing the level of saturating the major centers in the Philippines,” said Caperina, who helps oversee the equivalent of .48 billion at BPI Asset Management Inc. in Manila.

‘The next step for SM Prime is to expand outside, and China is a very promising market.”  SM Prime was unchanged at 11.75 pesos at the close in Manila. The stock has risen 37 percent this year, compared with a 27 percent gain in the main Philippine Stock Exchange Index.

The company will start building its own malls in China once it completes the purchase of three shopping centers in the country owned by SM Prime founder Henry Sy, Hans Sy said. Wal-Mart Stores Inc., the world’s largest retailer, is the anchor tenant in all three of Henry Sy’s malls in China.

Henry Sy, who also owns the largest Philippine department store and grocery chain, built his first mall in China five years ago. ‘China’s growth story is there,” Hans Sy said. 

‘We have been building malls of smaller scale in the Philippines because the spending power in the provinces isn’t as strong as that in Manila. With China, at least we can show people that there’s a future for SM Prime.”  

SM Prime said Citigroup Inc. and Macquarie Bank Ltd., which were hired to advise the company on its mall purchases in China, will finish valuing the assets in December. SM Prime may buy additional malls in China, and won’t restrict itself to building its own complexes as it did in the Philippines, Hans Sy said.