guna Province, about 45 kilometres south of Manila. The mall’s fashion brand contingent includes UK brand Bench, plus Penshoppe, Regatta and OXGN, which are all Philippine fashion brands owned by Golden ABC. There is also a Watsons and Miniso, and on the lower ground floor an SM hypermarket and food court. The centre also manages to squeeze in a bookstore, pet supplies store, an Ace Hardware, numerous eateries and a bank, which, by the way, is one of the two banks owned by another unit of the SM conglomerate, to which SM Prime belongs. It’s a small world. The much larger SM City Santo Tomas (110,000sqm GFA) opened two weeks later on 27 October, another 43 kilometres further south in the province of Batangas. As you might expect because of its size, this mall has pretty much what the one at San Pedro has plus a more international representation, including retailers like Hurley, Cotton On and Uniqlo. It is anchored by an SM department store and SM supermarket. Competitive setting The Philippine mall scene is highly professionalised and well developed. It is dominated by three players: SM Prime, Ayala Malls and Robinsons Land. All three are conglomerates with multiple businesses that include shopping malls, retail, mixed-use developments and other activities. Another thing the three have in common, owing to their sheer size, economic importance and multidisciplinary expertise, is that they have become tightly integrated into the communities where they have a presence. Also, cognisant of the fact that the Philippines is a nation of islands and subject to weather extremes, the three companies are at pains to sport their environmental credentials to an extent perhaps greater than in any other Southeast Asian country. SM Prime itself is the property arm of SM Investments Corporation (SMIC), and almost 60 per cent of its revenues are derived from the mall development and leasing business. Twenty-two of its 85 malls are integrated into large mixed-use projects that the company calls ‘lifestyle cities’. Use of the word ‘city’ is not an exaggeration, since apart from the retail they include some combination of residential, office, hotel and convention centre. A number of them are on former US military bases and the scale of the projects is so large that they are financed by public-private partnerships. It isn’t all malls though Separated from the malls, in a different arm of the company, is SM’s retail business. (In case you are wondering, the ‘SM’ part of the corporate title is a hand-me-down from the Shoemart shop in Manila where company founder Henry Sy made his start in the 1950s.) That humble shoe shop has blossomed into a retail empire that encompasses about 3,700 department stores, supermarkets, hypermarkets and specialty stores, including the anchor stores at both San Pedro and Santo Tomas. This year, it’s all been going well on the retail side and, when it goes well on the retail side, it inevitably goes well on the mall side also, as demand for space and rent both kick upwards. Accordingly, revenues at the malls are up 37 per cent for the January-September period, compared with the same nine months a year ago. During the same period, same-store sales at the company’s department stores – there were 69 of them in the base year and 73 now – have surged 18.4 per cent. This is the kind of growth that a few department store companies outside the Philippines might find enviable.  The food part of the retail business, which consists of 2,024 stores under the names Savemore, SM Supermarket, SM Hypermarket, WalterMart and Alfamart, has also been chugging along nicely, with same-store sales growth over the nine-month period of 5.1 per cent. Meanwhile, specialty retail (1,603 shops) has enjoyed a same-store sales increase of 9.2 per cent, with spectacular growth in fashion, kids, and health and beauty. Home is the one category that’s been iffy, a story that is being repeated throughout much of Southeast Asia in recent months. SM isn’t alone The other major players in the Philippines’ mall industry are reporting similarly good results in the first nine months of the year. Ayala Land has said its shopping centre revenues are up 40 per cent, year on year. Ayala doesn’t report tenant sales growth but the rental uptick suggests some good activity at its centres, which include trophy open-air projects like Greenbelt, as well as enclosed malls. Like SM Prime, some of its retail centres are integrated into huge mixed-use developments that are redeveloping what were once US military installations, such as Bonifacio Global City on the site of the former Fort McKinley.  Robinsons Land is in much the same businesses as the other two: on the retail property side it owns 53 malls in the Philippines, which reported 32 per cent rental revenue growth in the January-September period and echoed the good news coming from both SM Prime and Ayala Land. Philippine Statistics Authority data shows that retail and wholesale trade were major contributors to the country’s 5.9 per cent real GDP growth in the September quarter. The Philippines will be running neck-and-neck with Vietnam for the highest economic growth in ASEAN this year, but inflation is running uncomfortably high, at over 6 per cent. The Philippine people have a deeply religious culture and at the shopping centres, the Christmas decorations come out early. When SM City Santo Tomas opened in October, it was already sporting full holiday regalia. This is a place where the people just love their malls, and the country’s property developers are keen to keep it that way.