Ayala Land doubles capex budget to P13.6B this year

Property giant Ayala Land Inc. (ALI) has set aside P13.6 billion for its capital expenditures this year which include the development of a commercial center in Quezon City and new residential and office buildings, and the expansion of Greenbelt Mall in Makati.

ALI senior vice-president and chief finance officer Jaime Ysmael said the programmed capital budget for the year is more than double 2005’s actual expenditures of P6.8 billion.

The company had originally earmarked P13.6 billion for capex last year but only 50 percent of this amount was spent due to the timing of closing of negotiations for acquisition and subsequent development of properties.

Ysmael said residential developments accounted for 75 percent of the disbursements last year while 17 percent was spent for shopping centers. About six percent was used for office building projects of the corporate business group. The balance was spent for projects of the Visayas-Mindanao and strategic landbank management groups and for support businesses.

Of the 2006 capital budget, P6 billion will go to the development of the North Triangle commercial center which will rise on a 200,000-square meter property. The mall is targeted to be completed in the second half of 2007 with Landmark as the anchor department store. It would expand ALI’s current retail portfolio by 26 percent.

The mall will also have a new public transport terminal to be developed in the depot site, which will make the commercial center a major inter-modal transport hub and public convergence point in Quezon City.

Approximately P1 billion will be channeled to the construction of Greenbelt 5 with 30,000 square meters of gross leasable area. The project is expected to be completed in 2007 as well.

In the office leasing segment, ALI is building an eight storey structure for Hongkong ang Shanghai Banking Corp. in a 12,000-square meter lot in Fort Bonifacio. It is also developing a call center building for Infonxx, a directory call center on a 10,000 square meter lot in Sta. Rosa, Laguna.

The company is planning to develop more build-to-suit office buildings outside the Makati central business district. In April 2005, it completed People Support Center.

Apart from this, ALI has embarked on its first leisure project called Anvaya Cove, a high-end seaside residential resort community to be developed on over 320 hectares of land in Morong, Bataan.

Ysmael said funding for the company’s projects will come from internally-generated cash.

To broaden market reach and tap the growing market of overseas-based Filipinos, ALI will launch new residential projects for the middle-income and mass housing markets and continue to roll out new phases in existing projects including Ayala Westgrove Heights, Ayala Greenfield Estates and Serendra.

Amid the challenges faced by the property sector last year, ALI reported a 21-percent growth in its net income to P3.62 billion from P2.99 billion in 2004 on higher mall rentals and real estate sales and asset disposals.

Revenues rose 22 percent to P22.06 billion from only P18.08 billion in 2004.Of the total, residential developments accounted for P9.48 billion or an increase of 10 percent while shopping center revenues jumped 22 percent to P3.53 billion.

ALI gained P3.53 billion from the sale of preferred redeemable shares in Astoria Investment Ventures Inc., which used to hold the property giant’s 15.79-percent stake in MRT Holdings Inc.

"We are confident that these continuing initiatives will ensure sustained, profitable growth for the company over the long haul," ALI president and chief executive officer Jaime I. Ayala said.