The SM Group has confirmed yesterday that it is acquiring a majority interest in the privately-held property developer Ortigas Holdings Inc. (Ortigas and Co. Limited Partnership).

SM Investments Corp. and SM Prime Holdings Inc. (SMPHI) has disclosed to the Philippine Stock Exchange that it is in the process of discussion for the acquisition of majority interest in Ortigas Holdings.

Meanwhile, the amount and the details of the transaction are still under discussion and subject to finalization.

Ortigas Holdings has land banks in Quezon City, Mandaluyong and San Juan, and owns the 16-hectare Greenhills Shopping Center, the Ortigas Center, Tiendesitas, Frontera Verde, Valle Verde subdivisions, Greenmeadows, Greenhills Subdivisions, Luntala, Circulo Verde, and its latest project, the Viridian in Greenhills.

AB Capital Securities Inc. analyst Maria Arlysa Narciso said this latest move of the SM Group allows it to further tap the retail market in the said areas given the strategic locations. “While discussions are yet to be finalized, such acquisition will propel the SM Group to capture a large market for its retail and real estate businesses,” she added.

As of nine months last year, the parent company SM Investments has P37.8 billion in cash and a DE ratio of 1.02. Recently, the company launched a $250 millionm convertible bond which drew large interest from investors overseas. Proceeds of which will be used to refinance their debt and other purposes. Meanwhile, expansion will mostly be funded by internally generated cash.

Before the end of 2011, the SM group announced that it has set its 2012 capital expenditures amounting to P56.8 billion, an increase of 30 percent for 2010 capex, to fund expansion plans for malls, residential and office spaces.

It ended the first nine months of 2011 with a 13.6 percent increase in consolidated net income to P14.17 billion compared to P12.48 billion last year on the back of sustained robust performance of the company’s core businesses while consolidated revenues grew by 13 percent to P140.1 billion, as compared to P124.34 billion in 2010.

Meanwhile, Sy-led mall developer and operator SMPHI will open its 42nd shopping mall today, SM City Olongapo, its first in the province of Zambales today.

SM Olongapo has a gross floor area (GFA) of 46,869 square meters (sqm) and occupies 9,259 sqm of land.

SMPHI president Hans Sy said the opening of SM City Olongapo is doubly significant for SM Prime, as it is the company’s first shopping mall to be opened this year and it is also the very first SM mall in Zambales province. “As we warmly welcome everyone to our newest mall, we assure them of the same first-rate, affordable product and service offerings that are enjoyed by millions of loyal shoppers and customers in all SM malls throughout the country,” he said.

SM City Olongapo has a leasable area of 22,462 sqm, 81 percent of which has already been awarded to various tenants, with SM Department Store and SM Supermarket as its major tenants, occupying 11,364 sqm and 3,929 sqm of floor space, respectively, and other mall tenants including Banco de Oro, Watsons, Ace Hardware, National Bookstore, Jollibee and KFC, among others. SM City Olongapo’s major amenities consist of an al fresco dining area, which offers a view of Olongapo’s mountain landscape; three cinemas, with a combined seating capacity of 758; and parking slots for over 300 vehicles.

Olongapo City is a highly urbanized area in Zambales, sitting right next to the Subic Bay Freeport Zone, a former United States naval base that is now a major industrial, tourism, and logistics hub. Olongapo is known for its innovative urban management methods and has been cited by international organizations such as the Unesco (United Nations Educational, Scientific and Cultural Organization).

SM City Olongapo brings to 42 the total number of SM Prime malls all over the country, with a combined GFA of 5.0 million sqm. For the rest of 2012, SM Prime is scheduled to open SM City Lanang in Davao City, SM City General Santos in Southern Mindanao, SM City Consolacion in Cebu, SM City San Fernando in Pampanga, and SM Chongqing in China.

By the end of this year, SM Prime will have 46 malls in the Philippines and five in China with an estimated combined GFA of 6.3 million sqm. Danessa O. Rivera