SM Group to enter China property mart
MANILA, Philippines - The family of retail tycoon Henry Sy, will continue to expand its footprint in mainland China as it pursues plans to enter the residential property market in the world’s second largest economy next year.
In an interview with The STAR, SM Development Corp. vice-chairman and chief executive officer Henry Sy Jr. said the family remains upbeat on the long-term outlook of the China property market, which is showing a strong pick up in sales and selling prices.
Sy said another company will be used as the group’s vehicle for its initial foray into China’s housing market and not SMDC as originally planned. “The plan is still on, hopefully we can start next year. But it will not be under SMDC due to consolidation and remittance issues,” he said.
He said the group would need to take the necessary adjustments with respect to China’s regulatory environment.
China is seen to become the largest economy in the world in the next 10 years. It is an attractive market given its massive population and emerging middle class.
The SM Group, through affiliate SM Prime Holdings, has malls in Xiamen, Jinjiang, Chengdu and Suzhou and is set to open another one in Chongqing before the end of the year, its fifth in China. It is targeting a shopping center in China every year and plans to accelerate this by opening two starting in 2014, which includes its biggest ever mall to be located in Tianjin.
SM Prime owns land around its malls, suitable for residential condominiums. The group may employ the same strategy as SMDC’s, which builds apartments near SM Prime’s malls in the Philippines.
This strategy has boosted SMDC’s home sales and allowed it to compete head- on with bigger and older players.
SMDC, the residential property arm of the Sy family, is rolling out 73,000 new units this year, valued at P37 billion to sustain the robust take-up in sales. Five new projects have been lined up this year to add to its existing 15 residential projects under the SM Residences brand and two projects under the M Place brand.
It currently has a landbank of 85 hectares in Metro Manila and 113 hectares in the provinces.