THE SM group plans to expand its operations in China with the construction of its fourth mall in Chongqing City. On the sidelines of the SMX convention center inauguration, Hans Sy, SM Prime Holdings Inc. president, said the group will build its fourth mall in a newly acquired 7-hectare land by next year and slated for completion by 2009.

He said the company is also mulling over bringing its shopping mall business to Vietnam. SM Prime is the mall operations arm of SM Investments Corp., the holding firm of Henry Sy’s business empire.

The SM group already has three malls in China, which SM Prime plans to acquire and fold into its Philippine operations. These include the mall in Xiamen with total gross floor area of 120,000 square meters, a second in Jingjiang with 180,000 square meters of floor space, and a third in Chengdu with 170,000 square meters of floor space.

The acquisition plans would be finalized by the end of the month until early next year since valuations of these properties have yet to be completed. The Sy family has to get other third party appraisers to make sure “everything is transparent and very clear.�?

“If the valuation is good, acceptable to the family then it’s going to go in. If the valuation is too high and not acceptable to our major investors—so it depends on the valuation,�? the SM Prime executive said.

If these China properties would be folded under SM Prime, the firm can already take over the management and finances of its overseas mall operations since, “We would be able to raise capital faster and much cheaper than if we were to do it in China,�? Sy said.

“But it doesn’t mean that we would strike anywhere. We will be as conservative as we have been here also. We will grow one mall a year until we improve our organization then we can go to two malls, three malls exactly what we’re doing here,�? he added. Shareholders told the Sys that the expansion to China is “inevitable�? but warned against any “reckless�? mall building in a country where the threat of a real-estate bubble bursting is real, the SM Prime executive said.

Even with its overseas expansion, the group would still “be maintaining five or more branches on a smaller scale�? in Philippine provinces but it cannot build malls with 200,000 to 300,000 square meters of floor space because of the limited buying power of Filipinos outside Metro Manila, he said.

“The growth will be a bit slower,�? he added. The SM group has received several offers from various companies to build malls in Vietnam and India after it opened the SM Mall of Asia, considered the group’s biggest to date.

Sy said the group is “looking into [Vietnam] but nothing is final yet�? since they have to understand the culture and the policies that govern a certain country but initial reports by the SM people who went to Vietnam “were encouraging.�?