SM eyes 50-50 partnership with Waltermart

MANILA, Philippines - Mall and banking conglomerate SM Investment Corp. (SMIC) will not take over the management and business of the Waltermart Group of Companies.

Instead, a 50-50 partnership is in the offing, with the SM Group likely to help expand the community mall concept of shopping mall and supermarket firm Waltermart, company executives said.

“It is a 50-50 (partnership). They will do the management,” SMIC vice-chairperson Teresita Sy-Coson told reporters on the sidelines of the Bangko Sentral ng Pilipinas’ Annual Bankers’ Night.

“It is a good joint venture. The families would be working together,” Sy-Coson said.

For Jeffrey Lim, executive vice-president and chief finance officer of SM Prime Holdings Inc., the companies are still discussing each entity’s role in the partnership.

Early this month, SMIC, through its subsidiaries mall developer SM Prime and supermarket firm SM Retail Inc. entered into a joint venture with Waltermart.

“We are still doing the due diligence process,” Lim said, adding that the due diligence will be completed in after six months.

Sy-Coson said the two families, which worked in the past as tenants and land holders, are expected to work together to expand Waltermart.

“There should be synergy. Waltermart is known for community development, for smaller malls,” Lim said.

Current offerings of Waltermart, which currently operates 17 shopping centers across Metro Manila and Northern Luzon, are not comparable to the current supermarket portfolio of SMIC, Sy-Coson said.

SM Retail, for its part, added 25 new stores composed of five SM department stores, four SM Supermarkets, four SM Hypermarkets and 12 SaveMore stores in the nine months to September. As of end-September, the group had a total of 193 stores while mall operator SM Prime had 46 malls in the Philippines with a gross floor area of 5.5 million square meters.

Consumer-related businesses, particularly shopping centers and supermarkets are expanding their portfolio driven by the continued growth in the consumption-driven economy.

Lucio Co-led grocery chain Puregold Price Club Inc., for instance, is branching out in Mindanao with the opening of its flagship store in Cagayan de Oro and an S&R Membership Club in Davao as part of plans to hit 200 stores before 2015.

Other major players in the malls and supermarket segments like Gokongwei-led Robinsons Land Corp. and Ayala Land Inc. have likewise programmed expansion projects.