SM Investments Corp., Asia’s largest mall owner by market value, is unfazed by China’s slowing economic growth that’s facing a new blow from a stock market rout.
“China will continue to grow, perhaps not at the pace the whole world was used to, but still grow at a pace better than many countries,” Corazon Guidote, the company’s Manila-based head of investor relations, said in an e-mailed response to questions. “The expected slowdown won’t affect the expansion plans” of unit SM Prime Holdings Inc. “nor its operating strategy in China,” she said.
The correlation between China’s equity-market performance and consumption or production “has weakened since 2011 and almost faded last year,” Nomura Holdings Inc. economists led by Zhao Yang said in a July 8 report. China’s stock-market slump is “very much a sideshow” that “doesn’t reflect on the fundamentals” of China’s economy, International Monetary Fund chief economist Olivier Blanchard said last week.
SM Prime, which is putting up one mall per year in China, isn’t seeing indications of faltering demand and expects to maintain its occupancy level in Chinese malls “well above” 90 percent, Guidote said.
The company is set to open its biggest shopping mall in China this year and expects to complete a residential project over the next two years, The Standard reported today.
In 2014, the China business accounted for less than 6 percent of total revenue of SM Prime, Guidote said. For the new malls such as those in Suzhou and Zibo, their occupancies are likely to improve, she said.