Real estate giant Ayala Land, Inc. (ALI) is increasing its capital expenditures by 17.4 percent to P85 billion this year, from the P72.4 billion actually spent in 2022, to take advantage of growth prospects in 2023.
In a media and analsyts’ briefing, ALI President and CEO Bernard Vincent O. Dy said they are also increasing the value of residential projects to be launched this year by 20 percent to P110 billion from P91.4 billion in 2022.
Dy said 39 percent of this year’s capex will be allotted for the firm’s residential business while 23 percent will be earmarked for land acquisition.
Estate development will get 16 percent, malls 8 percent, offices 4 percent, hotels and resorts 3 percent, and 7 percent for other capital requirements.
Capital expenditures reached P72.4 billion in 2022, wherein 50 percent was spent on residential projects, 19 percent on land acquisition, 16 percent on estate development, 11 percent on commercial projects, and 4 percent for other purposes. ALI has a well-managed debt portfolio, with 97 percent contracted into long-term tenors, 90 percent locked in fixed rates and an For this year’s launch plan, 36 percent will be under the luxury Ayala Land Premier brand followed by Alveo (28 percent), Avida and Amaia (17 percent each), and Bellavita (2 percent).
The bulk of the projects will be in South Luzon (45 percent) and Metro Manila (40 percent), while other locations will be in Central Luzon (7 percent), Visayas (1 percent) and Mindanao (7 percent).
Developments will consist of vertical (45 percent), horizontal (42 percent), leisure (4 percent), and commercial (9 percent).
“With a gross domestic product growth forecast of 6 to 7 percent, in 2023, we will seize opportunities to propel our continuing recovery,” said Dy noting that they intend to launch four new estates in 2023 while priming established and emerging estates.
He said the reopening of more economies will boost overseas Filipinos remittance growth and fuel demand for residential projects and consumer spending, business process outsourcing firms will continue to drive office space demand, and projected growth in tourist arrivals will grow demand for hotels and resorts.
ALI reported that its earnings bounced back strongly in 2022, by 52 percent to P18.6 billion, on the strength of the Philippines’ reopened economy since the 2020 pandemic.
In a disclosure to the Philippine Stock Exchange, the firm said its diversified real-estate portfolio generated consolidated revenues of P126.2 billion, 19 percent more year-on-year.
“We are encouraged by our solid performance in 2022, driven by the full reopening of the Philippine economy and the support of our customers. All major business lines achieved meaningful recovery, a testament to our employees’ hard work and dedication,” Dy said.
With resilient demand amidst a higher interest-rate environment, the company registered P104.9 billion in reservation sales, 14 percent better than the previous year. Fourth-quarter sales totaled P27.6 billion, 24 percent more year-on-year.
Sales from local Filipinos comprised 66 percent of the total, complemented by overseas Filipinos and other nationalities, with a 22 percent and 13 percent share, respectively.
Sales from overseas Filipinos and other nationalities surged by 59 percent and 39 percent, respectively.
ALI launched ten residential developments worth P31.8 billion in the fourth quarter of 2022, bringing the consolidated value to P91.4 billion totaling 30 projects by year-end.
Property development revenues reached P81.2 billion, a 7 percent growth from 2021. Commercial lot sales led the segment’s advance as revenues surged by 75 percent to P14.5 billion on investor demand at Arca South, Nuvali, and Broadfield estates.
The steady construction progress of residential projects resulted in revenues of P63.5 billion, a slight dip from the previous year due to stretched downpayments.
Meanwhile, office-for-sale revenues declined by 16 percent to P3.2 billion due to the completion of Alveo’s Park Triangle Tower at BGC and the moderate take-up on remaining limited inventory.
In commercial leasing, revenues accelerated by 62 percent year-on-year to P33.4 billion with normalized mall rents and foot traffic, the contribution of new office spaces, and higher hotel room rates.
With the resurgence in foot traffic and mobility, shopping centers and hotel revenues doubled to P16.1 billion and P6.2 billion, respectively. Revenues from office leasing grew by 13 percent to P11.1 billion with the added contribution from One Ayala East and West Towers.
“Despite ongoing challenges in the operating environment, we remain positive in our outlook for 2023, and look forward to introducing new offerings that will meet the evolving needs of the market,” said Dy.
He noted that, “Our focus on customer satisfaction, operational excellence, and innovation will continue to guide our efforts as we pursue sustained growth.”
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The article was originally published in Manila Bulletin and written by James A. Loyola.
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