SM Mindanao malls get big boost from BPOs

DAVAO CITY—Tycoon Henry Sy’s mall business in Mindanao is getting a big boost from big business process outsourcing (BPO) firms that are diversifying their talent pool by setting up shop in “next wave” cities outside Metro Manila.

The impetus is not just from the retail spending that naturally thrives with increasing consumer affluence but from leasing space to BPOs within its shopping mall complex, replicating the synergy model adopted by mall development arm SM Prime Holdings in key Metro Manila locations like Mall of Asia, Megamall and North Edsa.

Washington-based BPO firm Ibex Global Philippines, formerly TRG, is set to open a new 592-seater hub inside SM Lanang Premier mall here in December, having committed to lease 3,500 square meters of space, SM Lanang mall manager Therese Lapena-Manalo said in an interview.

Teleperformance, which has set up shop in SMPH’s older mall in Davao, will hire about 2,200 people and lease 11,000 square meters of office space at SM City Davao, SM Supermalls assistant vice president and head of Mindanao operations Debby Go said in an interview. A total of 24,000 sqm of space is earmarked for BPO locators in this mall.

SM City Davao has been in operation for 11 years while SM Lanang Premier opened only in September last year. SMPH has two other malls in Mindanao—one in General Santos City and another in Cagayan de Oro.

To date, Mindanao accounts for 3 to 4 percent of SMPH’s total business. The share has been modest because even with the opening of two new malls last year—Lanang and GenSan, operations in Luzon have also expanded substantially, Go said.

“For this year, I think we will have a huge increase in our revenue and profit, not only because of the two malls (opened) but also with the entry of BPOs,” Go said.

Ibex Global is now building its staff in Davao and prior to the actual start of operations, the BPO firm has rented space from SM for its recruitment and training.

SM Lanang Premier is one of the most stylish malls built by SMPH so far and much different from the big-box type structure of its old malls in Metro Manila. Its facade is accentuated by the folded building concept, inspired by the traditional Japanese art of folding paper known as Origami.

Another anchor tenant at SM Lanang is the SMX Davao Convention Center, which can seat 700 to 5,320 guests at any given time. It has function rooms with total floor area of 4,476 sqm targeting corporate affairs, graduation ceremonies, product launches and even large-scale social events.

During a tour of the SM group’s Davao projects, Go told reporters that the group put up SMX in the Lanang complex to create synergy with nearby 204-room mid-scale Park Inn by Radissons Hotel, which opened only last March.

Asked about the overall strategy of SM Prime for Mindanao, Go said this would be to maintain the string brand equity by offering as much variety of retailers and services as Metro Manila has.

Late last year, SMPH president Hans Sy announced plans to build five more malls in Mindanao within the next four years, particularly in CDO and in Butuan. He noted that despite a smaller consumer base, Mindanao has stronger buying power.

SM Lanang currently has a daily foot traffic of 20,000 on weekdays and 40,000 on weekends while the old SM mall has daily foot traffic of 25,000 on weekdays and 40,000 on weekends.