Despite the bleak outlook for retail and remittances, mall developer SM Prime Holdings, Inc. (SMPH) is pursuing expansions in key cities and towns in the provinces, and in Metro Manila.
It is set to expand its provincial reach as it opens Friday its first Pangasinan branch called SM City Rosales.
The country’s biggest mall network operator would also add 90,000 square meter in its current total gross floor area (GFA).
On Wednesday, it opened The Bridgeway at SM Megamall with 15,000 sqm of additional space. This will bring the GFA of Megamall to 346,679 sqm.
In December, The Annex complex at SM North Edsa will open, bringing total GFA to 421,861 sqm for North EDSA.
Before the year ends, SM Prime is set to open SM Baliuag in Bulacan and the expansion of SM Fairview in Quezon City.
These expansions will further cement SM’s global status as one of the biggest mall operators in the world. Megamall and SM North Edsa are two of the world’s 10 largest shopping malls.
SM Rosales branch
The opening of SM City Rosales would bring to 32 the total number of SM malls all over the country, with a combined GFA of 4.1 million sqm.
It is the second SM mall to open this year, after SM City Marikina, which was inaugurated last September.
‘Our expansion towards provincial markets continues with the opening of SM City Rosales. Rosales is a highly progressive municipality in Pangasinan with a large, productive agricultural base. It is also a take-off point to the major cities of Dagupan, Nueva Ecija, and Baguio, which make the area highly accessible. As such, Rosales is an ideal location for an SM mall,’ said company president Hans T. Sy.
He added the opening of SM City Rosales will provide employment to close to 1,500 people which includes direct and indirect employees.
Built at a cost of P650-million, the mall has a gross floor area (GFA) of 60,989 square meters (sqm) and stands on 121,685 sqm of land. Its leasable area is 43,235 sqm and has as its major tenants SM Department Store and SM Hypermarket, which will occupy 16,686 sqm and 8,591 sqm of floor space, respectively.
The SM Department Store will open in April 2009. Other mall tenants include standards, like Jollibee, McDonald’s, KFC, National Bookstore, Watsons, Ace Hardware, and Timezone, among others.
The mall’s amenities include a 973-sqm food court and parking slots for over 1,000 vehicles.
Funding the expansion
Earlier, SMPH, whose shares are traded at the stock exchange, said it may have to tap borrowings to fund next year’s expansion program both here and in China.
In an interview, executive vice president and chief finance officer Jeffrey C. Lim said of the P10 billion capital expenditure it is allotting for 2009, they are considering possibilities of funding half of the amount through debt since the company has a very stable debt to equity position.
“We are looking at various options but maybe more on debt because we are not leverage enough,” he said.
The company is spending around P7 billion to build three new malls in Naga (Bicol), Pamplona (Las Pinas) and Rosario (Cavite) next year. By the end of 2009, SMPH will have a total of 36 malls under its portfolio with a total gross floor area of 4.5 million square meters.
For China, SMPH’s plan is to establish one mall a year. Sy said it is building one next year in Chongquing with two more planned in 2010 and 2011 to be located in Suzhou and Zibo in Guangdong province. The company currently has three malls in southern and western China, namely, Xiamen, Jinjiang and Chengdu.
“Borrowings to support our China operations may happen after the first quarter of 2009,” Lim added.
SMPH remains to one of the most profitable businesses of the Sy-led SM Investments Corp.
It posted P4.7 billion in profits for the first nine months of the year.