Ayala Land allots over P8 billion for mid-income housing projects

MANILA, Philippines - Encouraged by the robust take-up of its middle-income housing projects, property giant Ayala Land Inc. (ALI) is allocating the bulk of its 2009 capital expenditure budget of P17.4 billion for residential development.

In a filing with securities regulators, ALI said half or over P8 billion of the capital budget will be used to fund ongoing and planned residential projects while 17 percent will go to strategic landbank management.

The shopping centers division will get 13 percent while corporate business will have a 12 percent allocation.

Last year, ALI spent a record P18.9 billion for project and capital expenditures, 22 percent higher than the P15.4-billion shelled out in 2007. Residential developments also accounted for majority of the 2008 capex.

For 2009, ALI said it would examine the appropriate timing and allocated amounts for its projects and adjust the budget accordingly to reflect changes in plans if there will be any.

Funding for the company’s projects will come from cash generated from operations and additional borrowings, the company said.

ALI reported a 10 percent rise in net earnings last year to P4.8 billion, mainly due to strong operating revenues and equity earnings from affiliates combined with effective cost control measures.   Revenues reached an all-time high of P33.7 billion or 31 percent more than the P25.7 billion registered in 2007.

The residential development business accounted for P15.2 billion or 45 percent of total revenues, followed by the support businesses at 24 percent or P8 billion, largely coming from the construction business.

ALI’s middle-income property unit Avida chalked in revenues of P3.6 billion, up 38 percent as bookings increased to 1,957 units from 1,706 units. New projects such as Avida Settings Nuvali, Avida Settings Cavite, Avida Towers San Lazaro and Avida Towers Makati West, likewise drove growth of Avida unit bookings.