Ayala Land set to focus on lower class segment

Despite a slow first quarter, the retail operations of Ayala Land Inc. (ALI) is expected to remain one of the company’s growth drivers as it expands focus from the traditionally high-end market to the lower class consumer segment.

Anchored by the flagship Ayala Center, whose same-store sales last year went up six percent even with a lower growth in consumer spending and tougher competition, ALI derives a substantial portion, or about one-third, of its total revenues from rental income on its commercial center operations.

Last year, ALI generated P11.7 billion in revenues, up from P10.3 billion the previous year. Out of the amount, 27 percent or P3.11 billion was contributed by rental revenues from shopping centers and office properties, which remain the top revenue source for ALI.

Although growth for the first quarter was practically flat, company officials said sales could rebound in the latter part of the year since aside from attributing the initial quarter as a traditionally weak period, the series of new projects to be launched soon could provide the additional kick in the company’s growth.

"Our January to February sales were quite slow but in March, sales started to pick-up," said Miriam Katigbak ALI senior vice president for retail operations. "We’re still cautiously optimistic this year but, hopefully, it would be better next year."

She said with the construction of Market! Market!, ALI will open up a new arena in its shopping center rental operations. As a regional retail hub, the five-level value mall will be put up on a 10-hectare property along C-5 Road acquired under a long-term lease with the government.

"It’s really for bargain hunters, with features that are not in traditional shopping centers – theme bazaars, hawkers’ center, bargain stalls – all under one roof," she said.

Katigbak said the concept could be likened to combining the merchandise and price structure of bargain centers in Tutuban, Greenhills, Banawe and Dangwa, but with the added comfort, convenience and security typical in all Ayala malls.

"You get maximum value regardless of what you’re looking for," she added.

Besides Ayala Center in Makati and Cebu and Market! Market!, ALI’s string of retail centers also include the Greenbelt Complex, Alabang Town Center, Pavilion Mall in Biñan, Laguna, and two retail centers at the MRT 3 Ayala and EDSA/Taft stations.