Ayala Land set to continue 2-digit growth

MANILA, Philippines - Property giant Ayala Land Inc. (ALI) is set to continue this year the trend of double-digit growth in revenues and profits, company executives said.

The real estate arm of the Ayala conglomerate will sustain its growth in the long run by focusing on township projects offering its numerous products, they said.

“Certainly double-digit growth in terms of top line and bottom line is attainable given the rate with which we are going,” said ALI chief finance officer Jaime E. Ysmael.

For instance, ALI has P65 billion in unbooked revenues, up from P48 billion last year, Ysmael said. These are recognized based on the percentage of completion of property projects.

ALI’s profits surged 27 percent to P9.04 billion last year from P7.14 billion in the previous year as revenues from its residential, hotel, office and commercial projects jumped 23 percent to P54.52 billion.

ALI is wrapping up its 5-10-15 program, which was launched in 2009 amid the global financial crisis. It is a five-year plan ending in 2014 that aims to boost net income to P10 billion and return on equity to 15 percent.

“We have put in place a strategy that will ride on the momentum of what is happening in the Philippine economy,” said ALI president and CEO Antonino T. Aquino.

Aquino said the strategy will allow the company to benefit from low interest rates for the residential segment, outsourcing industry for its office space, economic growth for the industrial parks, tourist arrivals for hotels and resorts and higher consumer spending for its commercial centers like malls.

For long-term growth, ALI will focus on township and integrated centers.

There will be greater focus on developments in our own business districts where the property values are protected and there is strong demand, Aquino said.

ALI will maximize the value of its properties by offering residential, retail, office and even hotels in its communities while concentrating its resources in one area, Ysmael said.

So far, ALI has developed numerous township projects and business districts located like the Makati central business district, Bonifacio Global City in Taguig, Nuvali community in Laguna and the Cebu IT Park.

ALI will start developing this year the 74-hectare Arca South, formerly the FTI complex, in Taguig; the 21-hectare Circuit Makati, formerly the Sta. Ana racetrack; and the 45-hectare Vertis North in Quezon City.

Ysmael said Arca South can host 20 residential towers carrying residential brands AyalaLand Premier, Alveo and Avida.

Some lots in Arca South can also be sold for office and other vertical developments like schools and hotels, Ysmael said.

“It will generate quick liquidity and at the same time accelerate the development of FTI,” Ysmael said.

ALI earmarked P65.5 billion this year for the completion of ongoing developments and launch of 69 new projects with a combined value of P129 billion.

Last year, ALI spent a record P71 billion for project and capital expenditures as it launched 67 new projects last year worth P110 billion.

For this year’s capital spending, Ysmael said “P20 billion will be for land acquisition and the P45 billion will be for project development.

“The spending will be more skewed towards project completion. We launched quite a lot of projects in the last couple of years,” Ysmael said.

For funding, ALI will primarily make use of its P29 billion cash and collections from pre-selling.

Ysmael said the property firm is also looking at refinancing P5 billion in bonds and notes that will mature this year.

ALI plans to lengthen the maturity of its debts to seven to 10 years, locking in on low interest rates, Ysmael said.