Investors still going after high-end development, Ayala units says
Written by Miguel Camus / Reporter
WEDNESDAY, 24 JUNE 2009 20:09

INVESTORS reeling from the financial crisis have begun to turn to the relative safety of property investments, said Ayala Land Premier (ALP), the high-end land development unit of listed builder Ayala Land Inc. (ALI).

“People are going back to basics and have simplified their investment portfolios. [Philippine] real estate has a good track record in producing good returns,” said Ayala Land president Antonio Aquino.

Speaking to select business reporters during a company-organized briefing yesterday, Aquino said ALP is seeing a positive trend in terms of reservations, which surprisingly reported four months of consecutive growth since February. He said this followed five months of uncertainty which pulled first-quarter sales down by a tenth to P7.41 billion.

Reservation sales are considered a primary demand indicator by the real-estate firm. Aquino said June reservation sales breached P1 billion, or about double the figure reported in January this year.

“And July is expected to outperform June,” said Aquino.

“When [people] start talking in terms of the remittance slowdown, that has been more than made up for  by the domestic market.  This is a case where the fairly good domestic market is helping push things along,” said Aquino.

He said ALP buyers typically belong to the upper-income socioeconomic bracket, given that the high-end firm’s typical prices for units range from P4 million to over P20 million.

Aquino also pointed out that the same trend in uptakes was seen in the ALI’s middle-income and affordable units under Alveo Land and Avida Land respectively.

Currently, local clients make up between 85 percent and 90 percent of ALP project buyers, with the remainder from overseas, mostly those based in the US.

Meanwhile, ALP senior vice president and group head Bernard Dy said the company is looking at a better second half also because of the better quality of investors.  He said the bulk of the buyers are either end-users or long-term investors as opposed to speculative buyers who look to sell properties within a year of purchase to book immediate profits.

Aquino said ALI is also looking to launch more projects, particularly in the second half of the year. The publicly traded firm has allotted P17.4 billion in capital expenditures for ongoing and new projects this year, of which only between P7 billion and P8 billion has been spent, Aquino estimated.

“We have a fairly healthy level of inventory today,” said Aquino, who noted that the firm will raise it’s inventory to match the market’s demand.

ALI was established after parent Ayala Corp.n decided to spin off its real-estate division into an independent subsidiary to focus on its real- estate business