The Philippines’ biggest shopping mall owner and operator set its spending tack for its foray into China as part of its expansion across Asia, officials announced Thursday.

SM Prime Holdings Inc. will spend an equivalent of P4 billion in the next five years to build three to four malls in mainland China, Hans Sy, president, told reporters.

By next quarter, the company will start constructing its fourth mall in a 7-hectare area in Chongqing City, which will have a total gross floor area (GFA) of 140,000 square meters. It will open its doors to shoppers by late next year. 

Sy said the cost of building a mall in the mainland half the size of SM Megamall is around P1 billion. Megamall in Mandaluyong City has a GFA of at least 300,000 sq m. 

The SMPH executive said prospects for its future mall in Chongqing is good since the city has at least 35 million people, 2 million of which are located within the new property development where the SM mall will rise.

As a vote of confidence in its China business, SMPH will also embark on an expansion program for SM Xiamen that will add 90,000 sq. m. of GFA to its present 126,000 sq. m. 

“China is a relatively new area (for the SM group) but we have to be conservative.

We will expand but we have to build the brand name first,�? Sy said.  Plans for another mall in Vietnam is still being studied and the SMPH president said they are “looking in the Asian region but nothing is concrete yet.�?

After the company opened the Mall of Asia two years ago, the third biggest mall in the world, the SM group received offers to build new shopping destinations in Vietnam and India, SMPH earlier said. 

In November last year, the SMPH board has approved the acquisition of the three existing SM-branded malls in Jinjiang, Xiamen, and Chengdu through a share-swap agreement.

The Philippine-based company will issue about 372.5 million new common shares with a par value of P1 each to Oriental Land Development Limited in exchange for 100-percent equity of Mega Make Enterprises Limited, a firm that owns 100 percent of SM Jinjiang.

 On the other hand, SM Prime will issue 540 million new common shares with P1 par value each to Grand China International Limited that will be swapped with 100-percent equity of Affluent Capital Enterprises, which owns SM Xiamen and SM Chengdu. 

The firm has tapped Citigroup Global Markets Limited and Macquarie Securities (Asia) Pte Ltd. as financial advisers for the acquisition, and Savills Valuation and Professional Services Ltd. as property appraiser.

SMPH also engaged Pricewaterhouse Coopers Ltd. and Commerce and Finance Law Offices for the transactions in China, while Grant Thornton International was hired as independent financial adviser. 

“The move will allow SM Prime to gain a foothold in China’s fast-growing economy and use this platform for long-term growth outside the Philippines where it is the dominant shopping mall developer,�? the company said.