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Biz Buzz: Three decades of malling

/ 04:27 AM December 16, 2015

While everyone is busy preparing for the holiday celebrations, the SM group—the country’s biggest retail conglomerate—is quietly celebrating the 30th anniversary of its first shopping mall in the country, SM City North Edsa.

Thanks to a subtle but timely reminder from the group, we can now recall that the mall, the original “SM City,” first opened its doors to the public in November 1985, with an initial footprint of only 125,000 square meters (but even then, that made it the largest shopping mall in the country).

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Since then, the mall (rebranded as “SM City North Edsa” to differentiate it from the other “SM Cities” that have cropped up around the country) has grown in size to 498,000 sqm—an increase of almost 300 percent over three decades, thanks to space optimization as well as the acquisition of adjacent properties (excluding that small school along its Edsa frontage that stubbornly refused to be bought out).

Indeed, SM City is now the largest mall in the Philippines, cramped frontage notwithstanding.

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“Ever the visionary, my father [Henry Sy Sr.] thought of building malls when he saw the shopping center development in the US during his business trips abroad in the 1950s and 1960s,” SM Prime Holdings president Hans Sy said in a recent speech to mark the mall’s anniversary. “That was the time when ‘burbs’ or suburbs were being built in the outskirts of big cities with a shopping mall as the center. He saw this development from the east to the west coast and knew this would happen in the Philippines.”

And if you have any questions as to the family’s commitment to the Philippine economy, it is worth noting that the flagship mall was built and completed during one of the most turbulent times in the country’s history, both politically and economically.

Sy recounted that when his father started building SM City North Edsa in 1983, people thought it was a crazy idea as it happened during a political crisis and when interest rates rocketed to as high as 45 percent. More so, the location of the mall was right smack in the middle of a marshland along North Edsa.

“They said SM City would not succeed, but the mall was an instant success. And the rest, as they say, is history,” Sy said in his speech to retail partners. SM also takes pride in the fact that the presence of SM City has helped boost property values in the area.

Data from the Bureau of Internal Revenue shows that the zonal value of properties around the mall have risen from only P2,500 a square meter in 1990 to P40,000 in 2000, representing an average increase in value of 150 percent a year over a decade. Not a bad investment, definitely.

The mall itself is also a job generator, with SM alone employing 6,000 staffers for the commercial center’s operations (excluding jobs created indirectly due to the commercial activities it generated), and has also become one of Quezon City’s top taxpayers.

The group is also proud of its energy conservation efforts, with 5,760 solar panels installed on the mall’s roof decks—enough to generate 1.5 megawatts of electricity, and offsetting enough carbon dioxide emissions equivalent to the planting of 6,000 trees each year.

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So what’s next for SM City North Edsa? Possibly the most challenging aspect of its existence so far—ensuring that the government adheres to its contract of constructing the MRT common station in front of the mall as stipulated in an earlier contract between the government and SM.

And contrary to what has earlier been floated (that a deal between SM and the Department of Transportation and Communications is imminent), it seems that nothing much has moved in recent weeks. Tsk tsk. Daxim L. Lucas

 

Another kind of telco war

A FRESH telco war is brewing but industry executives can stand united in their interest in another battle in a galaxy far, far away. Of course, we’re talking about today’s premier of “Star Wars: The Force Awakens,” which continues the original Star Wars trilogy released more than three decades ago.

We expect Globe Telecom officials to flock to the theaters—the Zobel-owned telco after all has a partnership with Star Wars and its CEO, Ernest Cu, has been spotted donning Jedi robes in certain events.

Even Philippine Long Distance Telephone Co. chair Manuel V. Pangilinan, who runs some of the country’s largest businesses, albeit not in Jedi robes, is apparently a fan. Pangilinan, who says he’s still more of a “trekkie” (that is, a fan of the Star Trek franchise), says he likes Star Wars’ theme of heroism and good versus evil.

“Star Wars shows more of the human side [of science fiction],” Pangilinan said.

Not everyone, though, is excited about the Star Wars sequel, which is expected to make a box office killing for owner Walt Disney Co.

GMA Network Inc. chair and CEO Felipe Gozon says he is not a fan of the franchise. Interestingly, GMA also figured in unsuccessful investment talks with both PLDT and Globe in recent years. It looks like there’s another area Gozon doesn’t see eye to eye with the two telcos. Miguel R. Camus

Dribbling the ball

THE DEADLINE for the merger between the Philippine Stock Exchange (PSE) and Philippine Dealing and Exchange Corp. (PDEx) has come and gone, but no one seems to be in a rush to kill the deal. Certainly not the PSE whose principals have labored and lobbied long and hard to get the deal to the point of being sealed last month, only to be stymied by the lack of regulatory approval from the Securities and Exchange Commission. No, PSE isn’t in a rush to terminate the deal, Biz Buzz has learned.

Neither is the Bankers Association of the Philippines—the majority owner of the PDEx bond exchange—eager to terminate the deal either. In fact, neither party has hinted that they would act on the lapsing of the deal’s deadline last month.

Apparently, both parties are taking their cue from the Securities and Exchange Commission (SEC), which has so far declined to issue a so-called exemptive relief necessary for the merger between the equities and bond bourses to be consummated.

So the deal is still on. It’s just that everyone on the floor is dribbling the ball and passing it around, to use basketball terminology.

“We can dribble the ball, too,” said one financial market official.

And how long can they keep dribbling and passing without taking a shot at the basket? “At least six months,” he said.

Six months would bring us into the next presidential administration. That makes sense. Daxim L. Lucas

E-mail us at [email protected] Get business alerts and a preview of Biz Buzz the evening before it comes out. Text ON INQ BUSINESS to 4467 (P2.50/alert).

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TAGS: “Star Wars: The Force Awakens”, Henry Sy, Manuel V. Pangilinan, pdex, Philippine Dealing and Exchange Corp., Philippine Long Distance Telephone Co., Philippine Stock Exchange, PSE, SM City, SM North Edsa
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