ALI to borrow up to P4B for capex, debt payments

Property giant Ayala Land Inc. (ALI) is borrowing up to P4 billion to finance capital expenditures and prefund maturing obligations.

ALI chief financial officer Jaime Ysmael said the company has loans maturing early next year amounting to P3 billion.

For this year, the company has set aside P4 billion for the construction of new malls in line with efforts to increase its gross leasable area by 400,000 square meters in the next five years,

Among these new malls are Tri Noma, a project of the North Triangle Depot Commercial Corp. which will rise on a 200,000-square meter property; Greenbelt 5 which will have 30,000 square meters of gross leasable area; Ayala Center Cebu; and the retail portion at Serendra.

The Tri Noma, positioned as the entertainment and dining nucleus of Quezon City, is targeted to be completed in 2007. Landmark Department Store has agreed to be the anchor tenant.

Tri Noma 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.

Positioned as a fashion lifestyle center, Greenbelt 5, meanwhile, will be opening its doors to the public in 2008 with 31,250 square meters of leasable space. The retail portion at Serendra, on the other hand, comprises 6,400 square meters and is being patterned after the Soho-Greenwich area of Manhattan.

The expansion of Ayala Center Cebu, on the other hand, will add about 13,500 square meters to the mall.

Ysmael said ALI is also planning to divest some of its real estate properties that are no longer considered strategic for the group. It has a total landbank of 4,159 hectares, consisting of four components: Makati (54 hectares), Bonifacio Global City (44 hectares), Canlubang (1,696 hectares), and 2,365 hectares in other parts of the country. The company is considering selling 400 hectares of its existing landbank.

For the whole of 2006, ALI has earmarked P15 billion to P16 billion for its capital expenditures, more than double the 2005 capital budget.

Of the total, 56 percent will go to residential developments, 26 percent (shopping centers), seven percent (office buildings) and the balance will go to landbanking activities.

In the office leasing segment, ALI is building an eight-story structure for Hongkong ang Shanghai Bangking 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.

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.