MALL operator SM Prime Holdings Inc. is not interested in venturing into smaller community-type retail centers, preferring to stick to its tried and tested strategy of building one-stop shopping destinations.

This, despite plans bared by rivals to go into community shopping centers. Two weeks ago, Ayala Land Inc., which is behind the Glorietta and Greenbelt malls in Makati and TriNoma in Quezon City, said it is setting up a new subsidiary to develop small-format “neighborhood centers” with a maximum leasable area of 10,000 square meters (sq.m.).

Ayala Land plans to spend P320 million to fund five such projects next year to be located in Makati City, Bonifacio Global City and Nuvali in Laguna province.

In a recent interview, SM Prime president Hans Sy said the firm is confident with its current strategy, which propelled it to its current status as the country’s largest mall developer and operator.

“We want to be focused on shopping centers. Wherever we go, the smallest [leasable area] we will have is 55,000 sq. m,” said Sy. The firm recently opened its newest mall, SM City Rosario in Cavite, which offers roughly this number of leasable space. He explained this is the minimum space set by the company in order for a mall to operate efficiently.

The developer will also operates massive malls—such as the recently renovated SM North Edsa which now has 425,000 sq.m. of gross floor area, making it the largest in the country. SM Mall of Asia previously held this title, with 386,224 sq.m.

Sy said SM Prime remains bullish on the business based on the Filipino’s penchant for visiting malls as a recreational activity. He said the firm continues to see opportunities even within Metro Manila, as  it plans to open SM City Novaliches in Quezon City next year.

“I don’t know why people conclude there is oversaturation [of mall in Metro Manila]. One advantage over here is that [malls have become] a replacement of public parks,” said Sy.

The company continues to acquire new land, disclosing that SM Prime has about 14 properties scattered around the country as potential sites for new shopping developments.

Sy said SM Prime allots an average of P3 billion every year to expand its landbank.

“We are going toward Southern Luzon [and]  on top of that we also have a property in General Santos City and we are acquiring some more in the Mindanao area. There is a lot of opportunity,” said Sy.

For Cebu City, the firm recently offered the provincial government P3 billion to purchase a 28-hectare waterfront property which will be developed into a smaller version of the SM Mall of Asia complex. Sy said the firm may spend as much as P20 billion over the next 15 years for the property, which is part of the 240-hectare South Road Properties reclamation project.

It will be the second SM shopping center in the province after SM City Cebu opened its doors to the public in 1993.

The company currently owns 36 malls in the country. Next year, it plans to open five SM malls, expecting to end 2010 with 41 shopping centers all over the Philippines. SM Prime also plans to open another mall in China to end next year with four.