Ilocos Norte's Golden Opportunity: SM Prime's Strategic Play in a High-Growth Tourism Hub

The Philippine region of Ilocos Norte is emerging as a hidden gem for investors, propelled by its 8.6% GDP growth in 2024, the fastest among provinces in Region I. This surge, fueled by services, tourism, and infrastructure development, is now being turbocharged by SM Prime Holdings Inc.'s landmark expansion—a mall, a planned hotel, and a vision to unlock the region's latent potential.

The Catalyst: SM City Laoag's 90% Pre-Leasing and 4,000 Jobs

SM Prime's SM City Laoag, set to open on May 30, 2025, is no ordinary mall. With 90% of its 51,000-square-meter space already leased, it promises to be a linchpin of economic activity. Anchored by major brands like SM Store, TGI Fridays, and Adidas, the mall will create 4,000 direct and indirect jobs, injecting liquidity into a region where per capita household consumption lags behind the national average. This isn't just retail—it's a community hub. The open-air “Dap-ayan” park will serve as a social magnet, fostering local entrepreneurship and drawing visitors from neighboring provinces.

The mall's strategic location near Laoag International Airport positions it as a gateway to Ilocos Norte's tourism corridor, already seeing a 7.6% rise in gross capital formation—the fastest among regional expenditure categories. This aligns with SM Prime's track record: over the past decade, its regional malls have delivered average occupancy rates exceeding 95%, with occupancy costs often outpacing inflation.

The Next Move: A Hotel to Capitalize on Undervalued Tourism and MICE

While the mall is the immediate win, SM Prime's studied plans for a complementary hotel are equally pivotal. Ilocos Norte's tourism sector remains underdeveloped, with its primary 5-star accommodation—Fort Ilocandia Resort Hotel—last renovated in 1995. The region's MICE (Meetings, Incentives, Conventions, Exhibitions) potential is similarly untapped, despite its proximity to cultural landmarks like the Bantay Church and the 9-hole golf course at Fort Ilocandia.

SM Prime's hotel, likely targeting the middle-to-high-end segment, would address this gap. With Megaworld's P15-billion Ilocandia Coastown project nearby—a 77-hectare township blending residential and commercial spaces—the region is fast becoming a tourism and leisure epicenter. A modern hotel would synergize with these developments, creating a full-stack tourism economy that attracts both domestic and international travelers.

The Growth Backstop: Political Momentum and Regional Synergies

The region's political alignment with the Marcos administration bodes well. Governor Matthew Marcos Manotoc and Mayor Bryan Alcid, both Marcos allies, are prioritizing infrastructure and tourism. This includes plans to upgrade Laoag's airport and improve road networks, further lowering travel barriers.

Meanwhile, the Ilocos Region's GDP growth—bolstered by services (contributing 3.6 percentage points to 2024's 4.9% regional growth)—demonstrates the area's diversified economic strength. Agriculture's minor drag (-0.1%) is being offset by transport and accommodation gains, signaling resilience.

Why Act Now?

Investors should note three critical factors:
1. Valuation upside: Ilocos Norte's tourism infrastructure is decades behind its economic trajectory. SM Prime's hotel could catalyze a multiplier effect, boosting spending in dining, transport, and local enterprises.
2. SM Prime's execution: The company's ability to pre-lease space at 90% before opening underscores its demand-pull strategy. Its mixed-use developments, like Leisure Homes in Tagaytay, have historically outperformed benchmarks.
3. Regional momentum: With Megaworld's Ilocandia Coastown and SM's mall/hotel combo, Ilocos Norte is no longer a “sleepy province.” It's a high-growth corridor with room to scale.

The Bottom Line: A Play on Philippine Regionalization

SM Prime's expansion into Ilocos Norte isn't just a real estate play—it's a bet on Philippine regionalization. As the national economy diversifies beyond Metro Manila, provinces like Ilocos Norte offer asymmetric returns. With GDP growth outpacing the national average, and tourism infrastructure lagging behind demand, the region is primed for a boom.

Investors ignoring this opportunity risk missing a once-in-a-decade catalyst. The mall's opening in May 2025 is the starting gun—act swiftly before the crowd catches on.

This is not financial advice. Consult a licensed advisor before making investment decisions.