In a chance interview with reporters, SM Prime chief financial officer Jeffery Lim said the company is in talks to buy a 6-hectare property in Xinxiang City in the northern Henan province, and a roughly 9-hectare land in Quanzhou City in the southeastern Fujian province.
Lim said these deals replaced unsuccessful initiatives to acquire a parcel of land in Fuzhou City, also in Fujian, which prompted the company to lower projected spending this year from P20 billion to P18 billion.
Lim said the acquisitions are consistent with SM Prime’s strategy to buy bigger parcels of land in China, given the larger scale of business potential there.
“In China, our malls are doing an average of 100,000 square meters [of gross floor area],” Lim said. In the Philippines, he said that the average mall size ranges from 60,000 sqm to 80,000 sqm in gross floor area. “This will give us provisions to expand in the future,” Lim said.
The SM Prime executive added that the company is eyeing more land acquisitions, with its future strategy to focus on locations where it has already established a presence. SM Prime operates malls in the cities of Xiamen and Jinjiang, both in Fujian, and one in Chengdu, Sichuan province.
It is opening its fourth Chinese mall in Suzhou, situated in Jiangsu province, toward the end of the year.
“I think we can put up more malls in these locations,” Lim said.
SM Prime said earlier it is spending about 3.58 billion yuan (P23.8 billion) to build four malls in the Chinese mainland in three years.
That budget includes an SM shopping complex in Tianjin, a major city in northern China, which will be company’s biggest mall to-date at 530,000-sqm gross floor area.
SM Prime said these expansion efforts will allow its China operations to contribute up to a tenth of revenues, from the current 5 percent, in three years.
Officials in April said the company plans to take its China unit public through an overseas listing to raise about $500 million by 2013.
The company said first quarter profit rose 12 percent to P2.12 billion as revenues increased 13 percent to P6.07 billion. SM Prime is opening three domestic malls this year to the end with 43 shopping centers in the Philippines, and four in China.
(Miguel R. Camus)
