SM in talks with Ortigas clan to acquire Greenhills complex

MANILA, Philippines - The SM Group of retail tycoon Henry Sy Sr. is set to capture the biggest share of the retail market in the burgeoning Ortigas-Pasig-Mandaluyong area with the planned purchase of a majority stake in a privately-held company owned by the landed Ortigas clan.

The SM Group, through listed flagship firm SM Investments Corp. (SMIC), told the stock exchange yesterday that it was in talks to acquire a controlling stake in OCLP Holdings Inc., which owns the 16-hectare Greenhills shopping complex.

“The amount and details of the transaction are still under discussion and subject to finalization,” said Jose Sio, executive vice-president and chief financial officer of SMIC.

He, however, did not disclose which unit of the SM Group would be used as vehicle to facilitate the acquisition.

Citiseconline.com analyst Richard Laneda said the acquisition would allow the SM Group to tap into the Ortigas family’s vast land in Mandaluyong, San Juan, and Quezon City, further enlarging its footprint in Metro Manila.

“After the transaction, SM will control the lion’s share of the retail market in the Ortigas area with Megamall and Greenhills under its control,” he said.

With an area of at least 100 hectares, the Ortigas district is located at the boundaries of Pasig City, Mandaluyong and Quezon City. It is home to many shopping malls like Robinsons Galleria, Shangri-La, Megamall, Podium and St. Francis Square.

Megamall, developed and operated by shopping mall giant SM Prime Holdings Inc., sits on 18 hectares of prime land with a total floor area of about 348,000 square meters. It is currently undergoing renovation and expansion with the three- hectare parking lot in front of EDSA being converted into a commercial and office space for business process outsourcing (BPO) companies.

The expansion will give Megamall an additional 100,000 sqm. of gross leasable area and will make it the largest shopping mall in the country, surpassing SM City North EDSA.

Meanwhile, the Greenhills shopping center, the first of its kind to introduce indoor flea markets in the country, has become a popular destination for buying gadgets and affordable imported clothes and merchandise. Its main mall, V-Mall (formerly known as Virra Mall), houses five franchises from the SM Group – Toy Kingdom, SM Appliance Center, Our Home, Watsons and Ace Hardware.

The Ortigas clan, whose historic roots date back to the 300-year Spanish colonial rule, is among the largest landowners in the country, having developed upscale residential subdivisions Valle Verde and Wack-Wack as well as the 77-unit Luntala townhouse project within Valle Verde 6.

Aside from the Greenhills shopping center, the group’s retail portfolio also includes the 18-hectare Tiendesitas in Pasig.

Ongoing projects by the Ortigas Group include Circulo Verde, a 15-tower residential development located on a 12-hectare property in Calle Industria in Bagumbayan in Quezon City and the P25-billion Capitol Commons, which will rise on a 10-hectare property, which was previously occupied by the Rizal Provincial Capitol.

Capital Commons will include the development a high-end shopping mall to be called Estancia, slated for completion in 2013. Plans also include the development of a hotel and cinema complex.