DAVAO, Philippines — Mall and banking conglomerate SM Investments Corp. (SMIC) is expanding its commercial portfolio in Mindanao to take advantage of the region’s strong economic growth.
New shopping malls would start contributing additional revenues next year while convention centers are already under study, officials said.
“In Mindanao, we have expansion in Cagayan de Oro and Butuan,” Debby Go, assistant vice-president for Mindanao operations of Shopping Center Management Corp., said in an interview.
“Mindanao doesn’t have as much competition, not as competitive as Manila. There’s a lot of cities to expand to,” Go said.
SM Butuan will start commercial operations next year while the new SM Cagayan de Oro will open late 2014 or early 2015.
The increasing number of shoppers, backed by economic developments in Butuan and Cagayan de Oro, is enough to support a new mall, Go said.
“The second Cagayan de Oro mall is at the heart of the city. We’re expected to get the downtown area market,” Go said, adding that the existing mall in the area currently serves the uptown and nearby upscale subdivisions.
For Butuan, Philippines’ largest mall operator and developer SM Prime Holdings Inc. is building a community mall with a sky garden and outdoor dining options, Go said.
To date, SM Prime has four shopping malls in Mindanao: SM City Davao, SM City Cagayan de Oro, SM City General Santos and SM Lanang Premier with a total gross floor area of 430,000 square meters (sqm.)
The Davao operations of SM Prime, through SM Lanang and SM Davao, account for roughly 80 percent of total revenues for Mindanao, Go said.
Mindanao operations account for around four to five percent of the topline and bottomline of SM Prime, which has 47 shopping malls nationwide, Go said.
For new malls, SM Prime is looking at the occupancy rate of existing malls and community developments like the opening of business process outsourcing offices.
SMIC subsidiary SM Hotels and Conventions Corp. (SMHCC) is also planning to expand its portfolio in Mindanao.
“Our vision in SMX is to be the top of mind venue and meeting facility in key strategic destinations in the Philippines,” said SMX Convention Specialist Corp. general manager Dexter Deyto.
Deyto said the company is looking for opportunities to introduce the convention center in General Santos and Cagayan de Oro. It is also putting up a new convention center in Cebu and Pampanga.
To date, SMHCC’s unit SMX Convention Specialist owns and operates SMX Convention Center Manila, SMX Convention Center Davao, SMX Convention Center Taguig, the Megatrade Hall in SM Megamall and the Cebu Trade Hall, making it the largest convention center space provider in the Philippines with 67,709 sqm. in gross foor area and 35,223 sqm. in gross leasing area.
SMX Convention Center is a beneficiary to the MICE (meetings, incentives, conventions and exhibits) campaign of the Department of Tourism that targets to bring more multinational firms’ events to the Philippines.
“A MICE delegate has an expenditure that is six to seven times more than a leisure traveler. This generates sales for hotels, restaurants, shops, transportation providers and tour operators,” Deyto said.
Aside from malls and conventions centers, SMIC is also into retail (SM Retail Inc.), condominium development (SM Development Corp.) and banking (BDO Unibank Inc. and China Banking Corp.).