SM intensifies next wave city development to serve more markets
(26 April 2023. Pasay City, Philippines) SM Investments Corporation is bullish on more countryside development in 2023.
Growth prospects nationwide are looking more vibrant with more people gaining employment. A large chunk of the remittances from Overseas Filipino Workers are also going to their families in the provinces.
Increasing connectivity and the level of talent are also providing more impetus for expansion among Business Process Outsourcing (BPO) firms in these areas. BPO revenues are also at par with OFW remittances in amounts that are estimated at over USD30 billion.
“Given these, opportunities for growth in the Philippines remain high. Heading into 2023, we remain optimistic as a group. The majority of our expansion is focused on the regions especially in emerging regional centers outside of Metro Manila. Our businesses are well-positioned and have clear strategies to participate in the country’s strong growth,” SM Investments President Frederic C. DyBuncio said during the company’s annual stockholders’ meeting.
Reflecting its optimism, SM Investments is allocating PHP80 to PHP90 billion in capital expenditure mainly for expansion activities across the group, with the bulk going to property development.
In 2022, SM Prime Holdings, Inc, SM’s property arm, opened four new malls in the provinces, particularly, SM City Roxas in Capiz, SM City Tanza in Cavite, SM City Sorsogon in Bicol, and SM City Tuguegarao in Cagayan.
As of December 2022, SM Prime has 82 malls in the Philippines, consisting of 58 malls in the provincial areas, and 24 malls in Metro Manila. This year, SM Prime is scheduled to open at least three new malls.
In residential development, SM Prime currently has 84 residential projects. It aims to launch 15,000 to 20,000 residential units in 2023.
SM Retail, Inc. is also looking at expanding its store network by around 400 stores this year, largely from food retail and specialty retail stores.
SM Investments has invested in several related businesses in recent years as part of its strategy to participate in emerging high growth sectors.
In 2022, SM Investments increased its involvement in the logistics sector, bringing up its stake in Airspeed to 51%. It likewise hiked its stake in geothermal steam for renewable energy generation, acquiring 100% of Philippine Geothermal Production Company (PGPC).
“We are particularly optimistic about these opportunities. Our portfolio investments collectively contributed 11% of consolidated earnings last year and we expect this to increase over time,” Mr. DyBuncio said.
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