MANILA, Philippines - The SM Group of Henry Sy is mapping out a plan to build a “future city,” on top of its existing empire of malls and banks in the country, with investments seen reaching over P100 billion for two reclamation projects in Parañaque and Pasay.
Hans T. Sy, president of SM Prime Holdings Inc., said the conglomerate intends to integrate the Pasay and Parañaque reclamation projects which will have a combined area of 600 hectares.
Sy said the SM Group is currently preparing a master plan for the projects, due within the next three to six months.
“Preferably, we want the projects to be integrated so that the outcome will be beautiful. We’re trying to build a future city there. It has to be something different and more attractive,” he said.
Through the master plan, Sy said the company would show what can be done in the areas and at the same time clear out environmental issues the project may raise.
He said the SM Group has contracted New-York listed firm Aecom Technology Corp., one of the world’s largest engineering companies, for the project’s master planning.
“We are working with them very closely and we give them the ideas we want to do. We now have to justify the whole design including putting into consideration all the environment and climate change issues. We believe all issues should be addressed,” Sy said.
The conglomerate, however, would still have to await for further regulatory approvals such as those from the Philippine Reclamation Authority and the National Economic and Development Authority (NEDA) to jump start the project.
“The cities have contracted us and the city will have to secure the approval and the process. The city will have to go and secure all the approvals all the way up to NEDA. We’re just waiting,” said Jeffrey C. Lim, chief financial officer of SM Prime.
Lim said the integrated reclamation project is seen by the SM Group as a long-term development, not something it can build overnight.
He said it would take the SM Group three to five years to reclaim the lands alone.
Lim cited the 100-hectare Mall of Asia Complex in Pasay as an example, saying that development of the project started way back in early 1990s. The mall itself was opened in 2006 and the complex to date still has some 23 hectares of unused land.
SM Land is involved in the reclamation and development of 300 hectares of land in Pasay and another 300 hectares in Parañaque.
In a separate development, SM Prime, the integrated property firm of the SM Group, made yesterday its maiden bond offering, upsizing its retail bond issue to P20 billion from the initial size of P15 billion due to the strong demand from both retail and institutional investors.
The issue consists of the 5.1 percent Series A bonds due 2020, 5.2006 percent Series B bonds due 2021 and 5.7417 percent Series C bonds due 2024.
“The strong market response prompted the joint issue managers and joint lead underwriters to exercise the company’s oversubscription option,” SM Prime said in a statement.
The firm said the bonds were purchased by a wide spectrum of investors ranging from individuals in the retail market to banks, investment funds, pension funds, insurance companies and other corporates.
SM Prime’s bonds are rated PRS Aaa by Philippine Rating Services Corp. (PhilRatings), the highest in PhilRatings scale. The rating denotes that such obligations are of the highest quality with minimal credit risk, and that the issuing company’s capacity to meet its financial commitment on the obligations is extremely strong.
The joint issue managers and joint bookrunners of the bonds are BDO Capital & Investment Corp. and First Metro Investment Corp., which also acted as joint lead underwriters together with BPI Capital Corp. and China Banking Corp.