AYALA Land, Inc. is confident it will continue to be the most dominant property developer in the Philippines for the years to come against the backdrop of a growing property market in the Philippines.
With a committed capital expenditures of P37 billion for the year, Ayala Land expects to replicate its past performance in the years to come.
“… Capex will dictate what the future would be like. If you lower the capex, it will affect the revenue stream. In our case, we will continue to increase our capex. We expect the economy to continue to grow. We have a lot of products to launch in the market,” said Antonino Aquino, Ayala Land president.
Ayala Land reported an income of P7.14 billion last year on the back of strong performance of its various units, particularly its residential development.
Consolidated revenues reached P44.21 billion, 17 percent higher than the previous year’s P37.81 billion.
Revenues from real estate and hotels, comprising the bulk, grew 16 percent to P41.23 billion, with the strong performance of property development leading the growth.
Ayala Land, however, expects its other segments to considerably increase their contribution in the years to come as its starts to reap the benefit of investments done in the past, according to Aquino.
“The growth was well spread out. We expect the market to still grow fast and those in the growth segment to grow even faster because that’s where the market is and that’s where our product introduction is growing. Directionally, we expect that pie to go bigger. (In the residential development) our Amaia and Bella Vita (brands) will grow faster and their percentage shares will be bigger. Our malls while not yet operational will soon be operating and that will increase in relative share,” said Aquino.
Out of the P37 billion in capital expenditures, which is higher than the previous year’s P30 billion and a new record for the company, 56 percent of this will go to its residential development, according to Jaime Ysmael, Ayala Land chief finance officer.
Ysmael said 17 percent will go to leasing space development which covers mall and office space, 12 percent to tourism-related business of hotel and resorts development and the rest will go to landbanking.
Ysmael said funding for the residential portion would be self-funding given the practice of pre-selling as well as the company’s total cash of P25 billion. This would be enough to cover the expenses in developing various residential projects.
The remainder is covered by the P15 billion seven- and 10-year bonds that the company plans to issue.
For the residential development, Aquino expressed confidence that the company’s diversified portfolio and recognized brand will work to entrench the company’s name in all the markets it is in. Last year, Ayala Land unveiled two of its latest brands which focus on low-middle income and socialized housing market — Amaia and Bella Vita.
“We have that best position of (having) the most diversified product mix. We have the dominant position with Ayala Land Premier (ALP). Half of that is from the subdivision and the other part is from the condominiums. Even at ALP, we are also diversified. The same goes for our other properties like Avida and Alveo. The most competitive is the entry level where Avida is. Avida’s revenue from the condominium market represents 5 percent of the (total) revenues. We are very well positioned because we have so many product lines, and even in every brand we have multiple products. That is the unique element we have in Ayala Land,” said Aquino.
Aquino said the challenge for the company now is to “create” new markets beyond the markets it is “traditionally” in. It is looking at a landbank that is as big as its 1,600-hectare mixed-use Nuvali project in Laguna.
“We now have more places. More products come with different price points. And this diversification give us the comfort level that we will be able to give the requirement to the market,” he said
Aquino said Ayala Land’s strong brand has also enabled the company to be warmly accepted in areas where competitors have had a head start.
“Like Centera in Mandaluyong. Even if we are the last one to set up our product there, because of our brand, people are waiting for us,” he said.
Centera is a four-tower condominium project that Ayala Land’s Avida is developing.
For a single but a vast land project, Ayala Land is looking at Rizal, and the Bulacan-Pampanga area to complement its Nuvali project in the South of Metro Manila.
Aquino noted that one of the key strengths of Ayala Land is in developing communities, particularly subdivisions which made Ayala a revered name in the property industry. Aquino said Ayala Land wants to continue answering this need of the market in areas where they can get huge landbank.
“Ayala subdivisions are always very attractive. We’d like to continue to supply that particular need, particularly in the east and in the north because we’re not even there. We think that if we start to introduce that concept in the north and in the east, we will similarly be accepted by the market. So that’s what we’d like to focus on,” said Aquino.
In tourism, Ayala Land is ramping up its budget hotel brand Kukun which will have its pilot sites in Bonifacio Global City, Davao, Cagayan de Oro, and Nuvali. Ayala Land is also looking for new opportunities in El Nido, Palawan where it now owns a number of famous spots under El Nido Resorts, Inc.
“We expect to have a lot of resort (and hotel) investments,” said Aquino.
Aquino said that in all its developments, Ayala Land intends to stick to the same “model” it has employed that created business districts like the Ayala business district in Makati, and other mixed-use development they have in Cebu, Alabang, and Laguna.
The company has an integrated plan for every mixed-use development with residential, hotel, office space development, and retail components.
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