Sy’s got it all’ for the Filipinos
The stellar performance of the over 200 companies under the SM Group—from retail, property to banking—have contributed to make tycoon Henry Sy Sr., its founder, the richest man in the Philippines, according to the 2018 Forbes Philippines Rich list.
He had a real time net worth of $18.6 billion as of December 5 and has been ranked number one in the Forbes Philippine Rich List for 11 years in a row.
Described as a self-made man, Sy, according to Forbes, started out by learning the ropes of the retail trade beside his father in the family’s convenience store. After saving enough money, he started to do his own business at age 12. He was in his early 30s when he opened in 1958 (this is the reference year of SM’s 60th anniversary), a small shoe store along Rizal Avenue and a second one in Carriedo, Manila.
In the next decades, he opened Shoemart Makati, Shoemart Cubao; launched Shoemart Manila into his first Department Store; and rebranded and rechristened his stores as SM from SM Department Store. In the 1990s, Sy built one new mall after another. Today, there are 72 world-class SM Supermalls across the Philippines and seven shopping malls in China.
An Inquirer report in March said Sy’s companies that operate in crucial sectors include three of the most valuable companies in the Philippines: SM Investments Corp. (SMIC) and SM Prime are valued by the stock market at over P1 trillion each, and BDO Unibank, valued at around P635 billion. Altogether these companies account for around 4 percent of the Philippines’ gross domestic product.
SM Prime, SM Group’s property arm, is one of the largest integrated property developers of malls, residences, offices, hotels and convention centers in Southeast Asia. It is the largest property developer in terms of income base and market value by the end of 2016 in the Philippines. It owns the 72 SM Super Malls across the country and seven shopping malls in China, with a total 9.5 million sqm of gross floor Area (GFA), over 18,153 tenants in the Philippines and 1,940 tenants in China.
Through its units and subsidiaries, SM Prime is also in the building of residences to include both primary homes and leisure homes. Its wholly-owned unit SM Development Corp. (SMDC) is one of the leading housing developers for affordable condominium units.
SM Prime’s leisure homes meanwhile address the huge potential in Philippine tourism. Among these projects are Hamilo Coast, the premier seaside development of the SM Group at the head of the Nasugbu coastline, and Tagaytay Highlands, an exclusive, luxury mountain resort and residential complex.
SM Prime’s Commercial Properties Group (CPG), on the other hand, is in the business of developing and leasing office buildings in prime Metro Manila and key locations, most specially for technology-based industries and business process outsourcing (BPO) companies like its E-com Centers found in the Mall of Asia Complex and the SM Cyber Buildings—a mix of build-to-suit and ready-to-use office spaces in Makati City.
All the six children of Sy (by order of birth): Teresita (Sy-Coson), Elizabeth, Henry Jr., Hans, Herbert and Harley have been working in the various companies of the SM Group, making the transition into the second generation.
But Sy’s children did not elect one of them to succeed their father, 94, as chair of the conglomerate. They chose instead Jose Sio, the conglomerate’s long-time chief finance officer and a trusted adviser of the family, to be the new chair of conglomerate SM Investments Corp.
Sy is currently chairman emeritus of SMIC, SM Prime and Highlands Prime Inc., BDO Unibank Inc., and honorary chairman of China Banking Corp. His daughter Teresita and son Henry Jr. are vice chairpersons (non-executive director) of the SMIC.
Teresita has served in the SMIC board for 38 years and is the chairperson of the compensation committee and executive committee. She is the chairperson of BDO Unibank, Inc., and also holds board positions in several companies within the SM Group.
Henry Jr. is a member of SMIC executive committee and like Teresita, has also served in the SMIC board for 38 years. He is the chairman of SM Prime and Highlands Prime Inc.; chairman and chief executive officer of SM Development Corp.; and president of National Grid Corp. of the Philippines.
Harley is the executive director of SMIC and has served the board for 24 years. He is also a director of China Bank and other companies within the SM Group; adviser to the board of directors of BDO Private Bank; and co-vice chairman and treasurer of SM Retail.
Also members of the board of SM Prime are Herbert and Hans Sy (son of Henry Jr.) with Teresita and Elizabeth as advisers to the SM Prime Board.
Herbert has served as director of SM Prime since 1994. He is an adviser to the Board of SMIC; currently the vice chairman of Supervalue Inc., Super Shopping Market Inc. and Sanford Marketing Corp.; director of China Bank; and also sits in the Board of several companies within the SM Group. He has worked for more than 30 years in companies within the SM Group engaged in food retailing, rubber manufacturing, car service and car accessories and banking.
Hans is the chairman of the executive committee of SM Prime and has been a director of the company since 1994. He was previously the president of SM Prime until September 2016. He is also the chair of China Bank; adviser to the SMIC Board; chairman of National University. He held key positions in several companies engaged in banking, real estate development, mall operations, as well as leisure and entertainment.
Elizabeth was elected as an adviser to the SM Prime Board in April 2012. She serves as a member of the executive committee and trust committee of the board of directors of BDO Private Bank. She is also the chairperson and president of SM Hotels and Conventions Corp.; adviser to the board of SMIC; and co-chairperson of Pico De Loro Beach and Country Club. Compiled by Minerva Generalao, Inquirer Research
Source: Inquirer Archives, smprime.com, sminvestments.com, forbes.com
Pioneering townships of the future
When Megaworld launched its first project in 1989, the bloodiest coup attempt threatened the administration of the late President Corazon Aquino. The Asian financial crisis also tested the neophyte developer in the late 1990s. But Megaworld, under the leadership of its founder Andrew L. Tan, weathered these storms by bringing innovation into its business.
At the height of the Asian financial crisis, Megaworld was bullish while other developers had a wait-and-see attitude. It began the transformation of Libis in Quezon City from a sleepy district into a dynamic, bustling urban center. Tan laid the groundwork for Eastwood City despite the difficulty of leasing office spaces because most companies were downsizing.
This move proved to be in the right direction.
Foreign investors wanting to set up IT businesses in the country inquired about possible tax incentives from the government to make locating here more feasible. Tan explored the concept of a Philippine Economic Zone Authority-accredited IT park, paving the way for the establishment of Eastwood City.
Eastwood City also pioneered Megaworld’s live-work-play concept, which involved township developments that combined residential, office and leisure environments, to provide residents and investors a more convenient lifestyle, in which everything that you need is practically within reach.
The vision of building communities that change the way Filipinos live was something Tan nurtured since his youth. He started his business from scratch and his wife, Katherine, has been present since the beginning of this journey, serving as director of Megaworld since 1989.
Tan, a son of a transistor radio factory worker who came to Manila from China at age 16, once dreamed of owning and operating a small grocery store. Now, the self-made tycoon has a conglomerate that spans across various industries—real estate, food and beverage, quick service and tourism and gaming.
The Tan-led Alliance Global Group Inc. (AGI) includes Megaworld Corp., its property arm; Travellers International, owner and operator of Resorts World Manila; Emperador, the world’s biggest brandy company; and Golden Arches Development Corp., which holds the exclusive franchise of McDonald’s.
His humble beginnings is not lost on his son Kevin, who as a kid, would join his father in visiting properties under development.
The elder Tan believed that positions and titles were supposed to be earned and not just given so Kevin, who joined the family business in the early 2000s, had to take on various roles in the company and
undergo trainings like everyone else.
Kevin started as a salesman, pushing for condominiums before moving to the commercial side. He then served as senior vice president for Megaworld’s commercial division, which markets and operates the Megaworld Lifestyle Malls.
The mall component in Megaworld’s townships was actually a brainchild of Kevin who persuaded his father to also create lifestyle and entertainment complexes within their developments.
In June this year, Tan retired as CEO of AGI, passing to Kevin the responsibility of leading the business empire. The elder Tan, however, remains the chair of the conglomerate. His other son, Kendrick, is also in the family business serving as executive director of Emperador Inc. Compiled by Ana Roa, Inquirer Research
Sources: Inquirer Archives, megaworldcorp.com, allianceglobalinc.com
