Property giant SM Prime Holdings is finalizing a deal to buy out the Martel family from its contract with the City of Manila to develop and manage the seven-hectare Harrison Plaza complex.

In an interview, SM Prime chair Henry Sy Jr. said the group was finalizing the deal with the Martels after which SM Prime would be free to enter into a long-term joint development agreement with the Manila government.

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“It’s a very good area. This can be a massive project,” Sy said. “We could build a new shopping center with (residential) condominium above it.”

Sy said the Martels were willing to be bought out of their contract since this group had only a few years left to hold on to the Harrison Plaza complex.

Depending on the interpretation of technicalities, the Martels’ contract will expire by 2020 or 2022, Sy said.

“Once we finish (discussions) with the Martels, we will start with it right away. Right now, demand for (residential condominium) units is so much so I have to keep on replenishing land because we’re running out of land,” Sy said.

Harrison Plaza— located near the Bangko Sentral ng Pilipinas on Pablo Ocampo Street in Malate, Manila—is among the country’s first modern shopping centers but it had lagged its peers in terms of redevelopment.

As big and modern shopping malls raise the bar for shopping mall development in the country, the city government wants the largest shopping mall developer to take over the project.

SM Prime, for its part, had been a long-time tenant at Harrison Plaza since the complex was inaugurated in 1976.

Discussions with the City of Manila to take over Harrison Plaza started a few years ago. For its part, SM Prime has committed to invest at least P40 billion to redevelop this complex.

Sy said demand from the domestic market, coupled with demand from Chinese bulk buyers, was strong.

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In the first quarter, buyers from mainland China accounted for 30 percent of SM Development Corp.’s residential reservation sales.

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