MANILA • Seven decades ago, in Manila, one of Mr Henry Sy's first bonanzas was buying cigarettes from American soldiers and selling them in the city plaza at a mark-up.

Now, heirs of the retail and property mogul behind South-east Asia's largest fortune may have found a jackpot of their own: They are building a supermall in China that is almost the size of the Pentagon.

The project signals increased exposure to the world's biggest consumer market, in line with the foreign policy shift towards Beijing by President Rodrigo Duterte.

Investors are coming in, supporting a rally for Philippine equities and a surge for the stocks owned by Mr Sy's SM Investments.

That has made billionaires of his six children, according to the Bloomberg Billionaires Index.

The heirs collectively have direct stakes of around 44 per cent of SM, which has holdings in retail, property development, banking and logistics. The siblings - Teresita, Elizabeth, Henry Jr, Hans, Herbert and Harley - have a combined net worth of US$10.7 billion (S$14.78 billion), according to the index.

Mr Sy, 92, is credited with the remainder of the clan's share of the conglomerate, held directly, with his wife and through family-owned holding companies. The family's US$17.6 billion fortune amounts to more than 5 per cent of the nation's annual gross domestic product, according to the Bloomberg index.

Seven of the group's more than 60 malls are in China. The conglomerate is building a residential project in Chengdu, with plans for Xiamen and Jinjiang, the latter being the birthplace of Mr Sy. A supermall in the works in Tianjin will have more than 500,000 sq m of floor space, rivalling that of the Pentagon.

Still, China accounts for only about 2 per cent of the group's total revenue.

The expansion in China brings the fortune back to the founder's homeland, and comes as Mr Sy attempts to execute an orderly handover of his wealth to a new generation, which includes the appointing of professional managers from outside the family.

"The family has learnt to deal with decisions very professionally," said Ms Corazon Guidote, senior vice-president for investor relations at SM Investments. She said that while the clan is handing management to professionals, each of the siblings still gets a vote on strategic decisions.

Even so, the odds may be against a smooth transfer. Professor Joseph Fan from the Chinese University of Hong Kong, who studied 214 family-run firms in Taiwan, Hong Kong and Singapore, found that their stock prices dropped by almost 60 per cent on average in the eight years surrounding a change of power at the top.

"We have to wait and see how the relationships of his offspring evolve," Prof Fan said in an e-mail. "The real test of the family's governance is typically when the founder approaches the end stage of life."

BLOOMBERG