Hans Sy: 'Nothing to worry about' in SM Prime's China operations

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SM Xiamen complex

Amid concerns of a cooling Chinese economy, SM Prime Holdings Inc., one of Southeast Asia’s largest integrated property developers, remains upbeat about its businesses in China, where it has also ventured into the office leasing business in addition to malls.

“In China, there is nothing to worry about. The performance and the competition are still very much there. The growth is very much there,” SM Prime Chairman Hans T. Sy said in an interview.

He noted that, “We just finished a three-tower office with a total of 75,000 square meters. In less than a year, we’re 60 percent leased out already.”

Sy attributed the fast office take-up to their ability for new tenants to move almost immediately because the spaces are already fitted out. 

“What is the biggest problem in moving offices? They’re having to do with fit-out and all those things. But in China, there are just so many things available.

“We have modular offices. So, we build modular offices. And then, when people see it, it’s just like checking in to a hotel. They just go in and use it. So, that’s why they were very fast,” he explained.

However, Sy said this speedy set-up is not possible for its office business in the Philippines because modular offices are not available here and these will have to be custom-made at a local factory and will take too long.

SM Prime has been beefing up its mall developments in China, primarily in the Fujian province, with office buildings in addition to more retail spaces.

For its ongoing SM Xiamen Phase IV expansion, the firm intends to add 260,000 sqm in developed area which will include 120,000 sqm of office space and over 30,000 sqm of commercial space and 1,643 parking spaces.

Phase IV, which will also have a hotel, will complete the full development of the SM Xiamen complex which will have a total gross floor area of 670,000 sqm. SM Prime is investing 1.15 billion yuan for the five-year project.

Last December, SM Supermalls President Steven Tan said they will be completing the fourth expansion mall of SM City Xiamen this year.

“We've already opened the first part of the Xiamen 4 and, including the hotel, it should be complete by (2025). Xiamen is really progressive. If you total it all, it might actually be even bigger than Mall of Asia and Megamall,” said Tan.

SM first opened SM City Xiamen and then added SM Lifestyle mall beside it. Last year it opened the SM Xiamen 3 expansion mall.