Buyer's Guide to Ayala Land

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COCO MIDEL
M: +63.917.502.9252
E: coco.ayala@gmail.com
CC midel.jerico@ayalaland.com.ph
PRC License 0005279 / HLURB 001035

Ayala Land buys 51.36% interest in Tutuban firm
By: Doris Dumlao-Abadilla
@inquirerdotnet
Philippine Daily Inquirer
02:55 AM August 15th, 2015

SOURCE: http://business.inquirer.net/197159/ayala-land-buys-51-36-interest-in-tutuban-firm#ixzz3irw5p3VS

Property giant Ayala Land Inc. has signed a deal to buy a 51.36-percent stake in publicly listed holding firm Prime Orion Philippines Inc. (Popi)—owner and developer of Divisoria’s popular bazaar hub Tutuban Center—for P5.6 billion.

In a disclosure to the Philippine Stock Exchange Friday, both ALI and Popi announced a deal for ALI to acquire 2.5 billion Popi shares subject to certain terms and conditions. The deal signified ALI’s entry into smaller and more mass-based retail center formats.

The new shares to be acquired by ALI will come from Popi’s increase in authorized capital stock.

Through its subsidiary Tutuban Properties Inc., Popi owns Tutuban Center, a retail complex with a gross leasable area of about 60,000 square meters, offering various concepts from wholesale and bargain stalls to regular retail and food outlets.

“This acquisition is aligned with ALI’s thrust of expanding its leasing business,” ALI said in its disclosure.

In a text message, ALI president Bernard Vincent Dy said the “focus for now will continue to be the Tutuban parcel.”

With the deal, Popi said it would be able to benefit from the expertise and resources of ALI and optimizethe development of its property assets, especially Tutuban Center.

Tutuban Center, which sits on a 20-hectare property, will be the location of the North-South railway project transfer station, which will interconnect with the LRT 2 west station. Tutuban Properties signed last April a memorandum of understanding with the Department of Transportation and Communications (DOTC) and the Philippine National Railways (PNR) on the railway project.

“The landbank’s location doesn’t seem to be in the usual market of ALI despite Tutuban being the real example of the Filipino consumer. This area is quite depressed so you can’t expect an East or West gallery (upscale apartments)-like project here,” said Jose Mari Lacson, head of research at local stock brokerage Campos Lanuza & Co.

“So we can speculate that this forms part of a broader strategy involving PNR and the railway system. Remember ALI has major projects landbank in both the north and south that can be enhanced of we have an efficient railway system linking north and south Luzon,” Lacson said.

Formerly known as Guoco Holdings (Philippines) Inc., Popi has interests in real estate and property development, nonlife insurance and other allied services, organized under several intermediate holding companies.

Popi has total assets of P4.5 billion as of end-March this year while market capitalization stood at around P5.5 billion.

Ayala Corp. H1 net income rise 6% to P10.4B
by James Loyola
August 13, 2015 (updated)

SOURCE: http://www.mb.com.ph/ayala-corp-h1-net-income-rise-6-to-p10-4b/#xfs3oIAFL5DZE6lL.99

Ayala Corporation reported that its net income rose 6 percent to P10.4 billion in the first half of the year driven by the double- digit growth in its telecom, real estate, banking, and electronics businesses, and boosted by the positive performance of its power generation unit.

Excluding the previous year’s divestment gains from the sale of Stream Global Services, Ayala’s business process outsourcing unit, Ayala’s net income in the first semester grew 31 percent.

In a disclosure to the Philippine Stock Exchange, Ayala said its solid performance in the first half of the year was a result of strong equity earnings contribution from its business units, which reached P13.2 billion, up 2 percent from a year ago.

Without the divestment gains, equity earnings expanded 20 percent in the first half of the year.

The strong double-digit growth in the equity earnings of Globe Telecom, Ayala Land, Bank of the Philippine Islands, and Integrated Microelectronics combined with the positive contribution from AC Energy Holdings drove Ayala’s equity earnings during the period.

“Our earnings continue to grow at a strong pace in step with the overall performance of our business units. As demand drivers remain upbeat, and as our investments in power come onstream, we believe this strong growth will continue throughout the year,” Ayala president Fernando Zobel de Ayala said.

He added that, “as our core businesses grow, we continue to seek new areas to invest in. We are developing new platforms in the healthcare and education spaces. We believe these two sectors present excellent opportunities for growth and scale.”

Ayala Land’s net income expanded 19 percent to P8.4 billion, lifted by the upbeat performance of its property development and commercial leasing operations.

Net earnings of the Bank of the Philippine Islands expanded 16 percent to P9.3 billion As its core banking business continued to drive growth.

Manila Water’s net income dipped 4 percent from a year ago to P3 billion owing to higher operating expenses primarily from catch-up rental costs incurred by the East Zone concession during the period.

Integrated Micro-Electronics Inc. recorded a net income of $15.2 million, 35 percent higher from the previous year as operational improvements, continued focus on higher-margin products, and cost saving measures increased profitability.

As its power generating assets come online, AC Energy Holdings Inc. registered a net income in the first half of the year of P198 million. In transport infrastructure, Ayala formally opened the Muntinlupa-Cavite Expressway (MCX) on July 24, 2015.

COCO MIDEL
M: +63.917.502.9252
E: coco.ayala@gmail.com
CC midel.jerico@ayalaland.com.ph
PRC License 0005279 / HLURB 001035

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No signs of slowing down for Ayala Land’s property segment
By Krista A. M. Montealegre, Senior Reporter

SOURCE:
http://www.bworldonline.com/content.php?section=Corporate&title=no-signs-of-slowing-down-for-ayala-lands-property-segment&id=113152

AYALA Land, Inc. (ALI) said growth at its residential property business should pick up pace despite a slowdown in the first half and threats of higher interest rates.

The property giant has also been beefing up its leasing business to account for half of earnings in the next five years.

ALI Chief Financial Officer Jaime E. Ysmael told reporters last week the 10% growth in the company’s residential revenues in the first half — significantly slower than the 40% expansion a year ago — is still “quite reasonable” given the high base as a result of its aggressive launches since 2009.

Reservation sales — an indicator of future growth — grew 8% to P52.47 billion in the first half.

“The development side, residential will continue to grow — that’s our assumption for the next five years,” Mr. Ysmael said.

“We will not slow down… We will launch to the extent the market will bear, to the extent the market will continue to be conducive. From where we are standing right now, there is no reason to believe the market will not grow given what is happening in the global economy,” Mr. Ysmael said.

Rising remittances from Filipinos abroad, robust business process outsourcing and tourism sectors, growth in per capita income and low interest rates remain a favorable backdrop for expansion, he said.

“Last year, if you look at our performance, we grew our sales by more than 10% but the entire market contracted so we gained market share,” Mr. Ysmael said.

Higher US interest rates — with the Federal Reserve widely expected to raise them by September — will have a “muted” impact on Philippine credit conditions, he said.

“If that happens, we believe the Philippine banking system is resilient compared to the other markets. The central bank… has not followed the other economies in increasing interest rates because they feel the Philippine situation is a bit different and we can afford not to raise interest too much,” Mr. Ysmael said.

“If you look at mortgage rates, there is room for banks to even reduce mortgage rates because the net interest margin is quite high for the banks. They are charging 8-9% for a one-year fixed [loan] and their funding cost is less than that even if you add the intermediation cost,” he said.

ALI is beefing up its leasing portfolio with a plan to raise its contribution to 50% of earnings by 2020, or the end of its five-year plan when the property firm is expected to post a net profit of P40 billion.

Recurring income accounted for 44% of bottom line in the first half.

“The tripling of leasable space will deliver that,” Mr. Ysmael said, referring to a plan to triple the size of shopping malls, office space and hotel and resorts businesses over the next seven years from 2013 levels.

Shares in Ayala Land added 55 centavos or 1.44% to close at P38.70 each last Friday.