SM Prime Holdings eyes expansion in China

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3RD MALL TO OPEN IN SEPTEMBER

SM Prime Holdings eyes expansion in China

Posted: 0:07 AM | May 22, 2006

Elizabeth L. Sanchez

Inquirer

 

Published on page B6 of the May 22, 2006 issue of the Philippine Daily Inquirer

 

SM PRIME HOLDINGS INC. OF HENRY SY Sr. is set to expand more aggressively in China after securing a firm foothold in the retail industry in the Philippines.

 

The Sy family has two malls in China and intends to use the publicly listed company to put up more malls in the world's biggest retail market.

 

"We are looking at China. Very soon, we should finalize things. SM Prime is seriously looking at going into China," said SM Prime president Hans Sy.

 

SM Prime is likewise studying the possibility of taking over the Sy family's private mall operations in China.

 

Sy also said the SM group has hired foreign investment bankers to conduct studies to determine the financing required to implement such a plan.

 

"If ever we go into (China), how are we going to take note of the financing, (we have to) put into consideration the yuan. So there are a lot of things to be considered before we can make any final decision," Sy said.

 

Sy said that what would make potential investments attractive in general for SM Prime would be whether these would contribute 8 to 9 percent to the company's total income.

 

The Sy family is set to open its third mall in Chengdu province in China by September. The 170,000-square-meter mall will have retail giant Wal-Mart and Taiwan-based department store Laiya among the tenants.

 

The family plans to build one mall a year in China. It is currently scouting for a location outside the major cities for a fourth mall to open next year.

 

The Sy family has expanded quietly in China, opening its second mall in Fujian province late last year. It opened its first 120,000-square-meter shopping mall on Crossroad West in Xiamen in 2003.

 

SM Prime, on the other hand, opened its biggest mall to date, Mall of Asia, yesterday. With Mall of Asia, SM Prime now has a network of 25 malls.

 

Mall of Asia has a gross floor area of nearly 400,000 square meters and it took two-and-a-half years to build. The Mall of Asia, Henry Sy Sr.'s most ambitious project yet, cost roughly P6.5 billion.