SM to reclaim 360 hectares in Pasay City across NAIA Terminal 1

Pasay Reclamation Development Project given the green light
SM Prime Holdings, Inc. has gotten the green light from the local government of Pasay to enforce its proposed plan of reclaiming 360 hectares of land that would be connected to the Mall of Asia (MOA) Complex.

This was disclosed by SM Prime President Jeffrey Lim to the public that the company has already acquired the necessary permits and requirements to start on the project.

The proposed 360 hectare land to be reclaimed is expected to become a business district housing a world-class mall, office spaces, low-rise housing units, an entertainment complex, a five-star hotel, and a convention center.

Funding the Pasay Reclamation Development Project
In a disclosure released by SM Prime Holdings, Inc.; they revealed that the project is expected to come with a price tag of around P90 billion.  In line with this capital investment, the project is expected to be partly financed by the new issuance of SMPH bonds. SM Prime has already disclosed that it would be issuing a total of P15 billion worth of bonds with an oversubscription option of P5 billion. The Philipine Rating Services Corporation (commonly referred to as PhilRatings) has given SM Prime the highest rating. The bonds were given a rating of PRS AAA meaning that these are of the best quality and involve only a minimal amount of risk given the company's projections and future outlook.

Location of the Reclamation Site
The Pasay Reclamation Development Project would be situated across the Ninoy Aquino Airport (NAIA) Terminal 1 and is adjacent to the Mall Of Asia Complex, another reclamation project completed by SM Prime. The proposed 360 hectare district is seen to further contribute to the already booming district of Pasay.

The Gold City would contain a residential complex to be developed by SM Development Corporation. Aside from residential towers, the complex would as well house several office buildings to house new offices.

Demand for office buildings in the Pasay area has been on a rise recently with the rise of casinos and hotels in the vicinity. Offshore gaming operators or POGOs have also contributed to the demand for office spaces with them estimated to be taking up around 10% of the total office space in Metro Manila. Residential units in the area have also faced an increased demand and rental prices of units have already doubled. This is because of the need of Chinese workers for staff housing that are near their place of work.

Track Record of SM Prime Holdings, Inc.
SM Prime Holdings, Inc. has a solid track record. Incorporated in the Philippines in 1964, it has grown to be one of the largest property developers in the Southeast Asian region. It has built several lifestyle cities with the help of its subsidiaries.

Based on its annual report for the year ended 2019, SM Prime already has 79 malls under its belt with 72 located in the Philippines and 7 located in China. It has also built 63 residential projects and towers containing a total of over 122,000 residential units.

SM Prime has also entered the market of developing office buildings. Currently, it has already developed 11 office complexes with a total gross area of 622,611 square meters.

SM also has expertise when it comes to building hotels as it has already built - 6 hotels, 1510 hotel rooms, 4 convention centers, and 3 trade halls.

SM Prime also has experience when it comes to reclamation projects. One of its most noteworthy successes was the 100 hectare Mall Of Asia Complex in Pasay. The area used to just contain weeds with prospective tenants and residents being discouraged because of its proximity to the sea. Nowadays, the MOA complex is already booming housing a huge mall and the SMX Convention Center. It has also become a model for resiliency as it has withstood the test of time and survived typhoons and earthquakes allaying fears of destruction due to natural disasters.

Aside from the Mall of Asia Complex in Pasay, SM has also entered into a joint agreement with Ayala Land to reclaim 26 hectares of land off the coast of Cebu and develop it into a thriving business district. This project is expected to cost P300 billion and would generate around 2 million jobs in the region.

Foreign partners expected to share their expertise in the project
For the Pasay Reclamation Development Project, SM Prime Holdings has partnered with Royal Boskalis Westminster N.V. of Netherlands and also China Harbour Engineering Company of China. SMPH is expected from the partnership as it taps on the expertise of these companies.

Boskalis is the leader in global dredging and offshore contractor and maritime services provider. Notable projects Boskalis include the construction of various offshore oil drills, construction of major shipping ports, and the Suez Canal expansion.

China Harbour Engineering Company on the other hand provides a full range of services from Engineerjng-Procurement-Construction(EPC), Build-Operate-Transfer (BOT), and Public-Private Partnership. (PPP)

Partnering with these companies would help SM Prime make sure that the three islands they intend to reclaim totaling 260-hectares would be earthquake-proof and safe for people to actually live in.

Other projects in the pipeline
Aside from the approved 360-hectare reclamation  in Pasay, SM Prime also has two other Manila Bay  proposals in its pipeline. The first, a 300-hectare project in Paranaque and another 335-hectare project in Pasay based on the records of Philippine Reclamation Authority.

SMPH 's earnings and growth projection
SM Prime's earnings grew by 18% for the first 9 months of this year compared to the same period last year. Nine month revenues increased by 14% to P85 billion from P74 billion one year ago. This is due to the higher revenues posted all across the board by its  shopping malls, residential projects, as well as office complexes.

Higher earnings and the news of SMPH's gaining approval for the Pasay Reclamation Development Project have all contributed positively to the share price of SM Prime with it now being up by 2 percent as of December 6, 2019.