SM Prime starts 2014 expansion

SM PRIME Holdings, Inc. has opened its first mall in Cagayan Valley - one of three new shopping centers planned for the year - the main property arm of SM Group said in a statement attached to a disclosure on Friday (May 30, 2014). Opened on Friday was SM City Cauayan in Isabela - one of three new malls planned for opening this year besides those in Angono, Rizal and in Zibo City in Shandong, China.

The 66,299-square meter mall in Cauayan City, which has a nature-oriented design, is SM Prime’s first open strip mall. It uses ceiling fans instead of air-conditioner units for a “green and cost-effective approach”, the firm said in its statement. “The mall’s exterior features will also include warmly colored panels set in a random pattern to give an air of gaiety and festivity and will be combined with glass and steel finishes for a modern touch,” the statement read.

Aside from SM stores, the mall will also have Watsons and ACE Hardware; fashion brands such as Guess, Payless, Giordano and For Me; as well as home grown restaurants such as Chocolate Cofeeline, Yah Coffee and Café Isabela. It has a total of 570 parking slots, with 316 in the car park building.

Cauayan City, considered the central business district of Cagayan Valley, has over 2,000 registered businesses. It is also near 11 Isabela municipalities, making it accessible to over half a million people. “SM Prime’s entry into Cauayan reflects its optimism in the growth potential of provincial areas on the back of a robust Philippine economy. Encouraged by positive results delivered by its provincial mall openings, SM Prime seeks to expand in various regions outside Metro Manila where it is seen as a catalyst for development,” the statement read.

        SM Prime saw consolidated net income rise 11% to P4.58 billion last quarter from P4.11 billion the previous year, as consolidated revenues rose 3% to P15.35 billion from P14.95 billion. Rental revenues, which made up 56% of consolidated revenues, grew 12% to P8.56 billion from P7.63 billion, mainly due to new malls that opened in 2012 and 2013. Real estate sales contributed a third to total revenues at P5.02 billion, while “other revenues” from malls, residential, commercial business, leisure properties as well as hotels and convention centers made up 11% at P1.77 billion. Gross expense slightly went down by 3.63% to P9.6 billion from P9.97 billion.

This year, the firm also plans to expand SM City Bacolod and SM Lipa after the launch earlier this year of SM Mega Fashion Hall at SM Megamall in Mandaluyong City that increased that mall’s gross floor area to 506,435 sq.m. SMIC’s property business - consolidated last year under SM Prime - consists as well of SM Development Corp.; Highlands Prime, Inc.; Costa del Hamilo, Inc.; Prime Metro Estate, Inc.; and SM Hotels and Conventions Corp. SM Prime shares closed P16.76 apiece on Friday, up 42 centavos or 2.57% from P16.34 last Thursday.