Philippines-based mall developer and operator, SM Prime, plans to continue expansion in its home market as well as in China with the addition of 18 malls over the next three years.

Investment in the new malls will hit 63 billion pesos (US$1.5 billion). The Philippines’ additional malls are directed at areas outside Metro Manila,  while the China malls are targeted at less affluent or lower tier cities such as Zibo.

SM Prime owner Henry Sy is optmistic about the expansion, saying consumer spending in the two countries will continue to grow.

“I am quite positive that we can accelerate our earnings growth. There are still plenty of opportunities in the Philippines and in China,” said Sy.

SM Prime, whose profit grew 15 per cent last year, is bullish this year, forecasting a 16 per cent increase in its earnings.

However, SM Pime’s expansion will be confronted with challenges of China’s slowdown and the decline in the value of Filipino overseas workers’ remittances as a result of the strengthening of the value of the Philippine peso.

The peso has appreciated by 4.8 per cent this year. Filipino overseas worker’s remittances represent about one tenth of the Philippine economy.

In China, SM Prime will also face a tough competition from other mall developers like CapitaMalls Asia which recently announced that it will build a shopping mall in Qingdao. The Singapore-based mall developer has a total of 58 shopping malls in 36 cities in China, of which 43 are operational while the other 15 are under development.

From its beginning in 1985, SM Prime now has a network of 45 malls in the Philippines and four in China.

GB