SM Prime expands Xiamen mall, focuses China strategy on Fujian

XIAMEN CITY, China — SM Prime Holdings, Inc. is expanding its first mall in China with a new P1.5-billion retail development as it narrows its China expansion strategy to Fujian province, where it said the company has established strong brand recognition.

The property developer will launch the 19,403-square-meter (sq.m.) CHAO Block at SM Xiamen City, its first overseas development, as it continues to invest in the province while taking a more conservative approach to its China expansion.

“Moving forward, we will just focus on Fujian province,” SM Prime President Jeffrey C. Lim told reporters during a media roundtable on Friday.

Mr. Lim said the company remains open to opportunities proposed by local governments but intends to strengthen its presence in Fujian, where the SM brand is already well established.

“China is so big. Every province is almost like a different country. The good thing for us is that the SM name is very popular and quite known in Fujian,” he said.

Despite the renewed focus, Mr. Lim said the group’s China operations remain “not material” to SM Prime’s consolidated business, adding that the company has no immediate plans to spin off its China assets until they reach greater scale.

CHAO Block is envisioned as a “neo-urban block” that extends beyond the traditional mall format by bringing together independent founders, local entrepreneurs, cultural curators, and first-to-market concepts.

The P1.5-billion project will be completed in phases, with the first phase scheduled to open in September and the second phase targeted for completion in the fourth quarter of 2027.

Tenants will also be encouraged to host workshops, product launches, exhibitions, community events, and brand collaborations.

“SM Xiamen City holds a distinct place in our company’s history. Being our first overseas investment, it has served as a long-term platform for learning, expansion and growth in China,” Mr. Lim said.

“As Xiamen continues to develop, we intend to keep strengthening the property and the local entrepreneurs so it remains an important part of the city’s commercial landscape,” he added.

Established in 2001, SM Xiamen City was developed as a one-stop shopping destination for the mainstream consumer market.

In 2009, the property expanded by 109,922 sq.m. of gross floor area (GFA) as part of its repositioning into an upscale lifestyle shopping center. In 2022, it added another 129,195 sq.m. of GFA and refreshed its tenant mix to cater to younger consumers and growing demand for social and experiential spaces.

Today, SM Xiamen City houses more than 500 stores, including international brands such as Apple Store, Sephora, Maison Le Fame, and Lululemon, as well as a Walmart and a range of restaurants and cafés.

Mr. Lim said the company also plans to apply lessons from SM Xiamen City’s evolution to its Philippine developments by introducing more experiential retail concepts.

In the Philippines, SM Prime, through SM Development Corp. (SMDC), is shifting its residential focus toward provincial economic housing to address what Mr. Lim estimated to be a national housing backlog of more than six million units.

The company is targeting the “non-vattable” P3.6-million price point for buyers in Davao, Iloilo, Mabalacat, Pampanga, and Trece Martires, Cavite.

While Metro Manila properties continue to face challenges, SM Prime plans to sell its existing inventory in the capital while expanding its recurring income business and provincial footprint. The company expects to produce about 25,000 homes annually.

Separately, Mr. Lim said sand placement for SM Prime’s Manila Bay reclamation project has been completed, with work now focused on shoreline protection, including armor rocks and revetment.

“Our commitment to the government is to turn it over mid-2028,” he said, adding that land development, including roads and utilities, is expected to be completed between 2026 and early 2027.

The company is also studying temporary uses for portions of the reclaimed land, particularly the island facing SM Mall of Asia. Interim developments, which may remain in place for five to 10 years, could include sports complexes to be operated by third-party partners rather than SM Prime. — Juliana Chloe A. Gonzales