SM Prime allots P7 B for 2 new office buildings

MANILA, Philippines - SM Prime Holdings Inc., the integrated property development arm of tycoon Henry Sy, is earmarking P7 billion for the construction of two new office buildings early next year.

The two projects will beef up the SM Group’s office portfolio by 160,000 square meters in gross floor area (GFA) upon completion by 2017, SM Prime senior vice president for commercial properties Dave Rafael said in an interview yesterday.

Rafael said the company will invest P3.5 billion each for the two stand-alone towers, with each building composing of 25 to 30 floors and a GFA of 80,000 square meters.

Although he did not disclose the exact location of each development, Rafael said one would be constructed in Quezon City along EDSA, while the other would rise in Ortigas.

Rafael said the projects are seen to cater to the growing demand for office space, particularly of the business process outsourcing sector, in Metro Manila.

 “BPO market is still very strong. However, we need to be careful in choosing locations for our office buildings. There should already be guaranteed tenants for each planned location,” he said.

For the two office projects that will break ground next year, Rafael said SM Prime is currently in talks with several potential tenants already although no deal has been reached to date.

SM Prime launched yesterday its latest office building called SM Cyber West Avenue, a 15-story structure located in EDSA corner West Ave. in Quezon City that has a GFA of 42,941 square meters.   

SM Prime said the P1.05-billion SM Cyber West building was built in support not only just to the BPO sector but to the information technology and other sectors of the service industry as well.

Of SM Prime’s total office GFA of about 600,000 square meters to date, Rafael said about 85 percent are occupied by BPO tenants.

“The BPO sector is one of the fastest-growing sectors of the economy. It provides jobs and boosts Filipinos’ spending power, thereby benefitting other segments of the market such as food, retail, and property,” Rafael said.

SM Cyber West Avenue, for instance, has already been primarily taken up by two major BPO tenants, namely Emerson Electric (Asia) Ltd. and Synnex-Concentrix Corp.

SM Prime said Emerson Electric currently occupies seven floors while Synnex-Concentrix leases three floors of the building.

“Because of its huge economic contribution, we want to make sure that the BPO sector is well supported by providing workforce with state-of-the-art office buildings that are accessible and strategically located near public transport systems and lifestyle destinations,” Rafael said.

SM’s Cyber buildings brand are composed of a GFA ranging from 60,000 square meters to 80,000 square meters.

These developments are office buildings smaller than SM’s E-com Centers which are about twice the size of Cyber buildings and are located at the Mall of Asia (MOA) complex in Pasay City. 

SM Makati Cyber One and SM Makati Cyber Two were completed in 2008, while SM Cyber Baguio and SM Cyber West opened in 2006 and 2014, respectively.