SM Prime Holdings Inc., the country’s largest property developer owned by billionaire Henry Sy, said it will spend P20 billion annually in China to expand its shopping malls, launch residential projects and acquire lots for future development.

SM Prime Holdings Inc., the property unit of tycoon Henry Sy, is spending P80 billion in 2015 to support its expansion.  Shown during the company’s annual stockholders meeting at SM Aura in Taguig City are (from left) SM Prime president Hans Sy, chairman of the board Henry Sy Jr. and vice chairman Jose Cuisia Jr. BOBBY CABRERA
 

SM Prime executive vice president Jeffrey Lim said in a news briefing following the annual stockholders’ meeting the bulk of the investments in China would be used to build new malls and acquire new properties, while a small portion would be allocated for residential development.

The P20-billion annual spending in China would form part of the company’s P400-billion programmed capital spending in 2014 to 2018, which includes P80 billion in 2015.

SM Prime president Hans Sy said the company, which planned to have nine malls in China by 2018, had secured four more new sites for expansion.

SM Prime currently has five shopping malls in China which are located in Xiamen, Jinjiang, Chengdu, Suzhou and Chongqing.

Two more China malls are expected to open this year, including SM Zibo and SM Tainjin.

The company also started building its first residential project in China, near one of the company’s shopping malls.

Future residential projects in China will also be located within existing malls in Xiamen and Jinjiang, it said.

The company’s first residential project in China would have 300 to 400 units, catering to the middle-income market.

Sy said because of the lower cost of materials in China, the residential units would be priced at an average of P900,000 per unit, compared to the P2-million selling price in the Philippines.

SM Prime chairman Henry Sy Jr. said it was the right time to invest in China, despite the cooling property prices in the world’s second largest economy.

“I do believe that it’s the best time to go in [China] because land prices are still up within our mall areas and a lot of competition are not that aggressive because of some circumstances in China. Overall, it’s the best time for SMDC to build condominium projects,” he said.

Meanwhile, Lim said the group planned to borrow at least 40 percent of the P400 billion programmed spending from the debt market while the remaining 60 percent would come from internally generated funds.

SM Prime will spend P80 billion in 2015 to support its aggressive expansion. The company said it would increase by 12 percent its mall space in the Philippines and would launch five high rise residential projects with at least 11,000 units.