Ayala Land to launch P115 B worth of projects, P100-B capex

Real estate giant Ayala Land Inc. (ALI) is launching P115 billion worth of projects this year with a capital expenditure (capex) budget of P100 billion as it is optimistic about opportunities for 2024.

In a media and analysts’ briefing, ALI President and CEO Anna Ma. Margarita B. Dy said though that they are also “pragmatic in addressing potential challenges of a ‘higher-for-longer’ interest rate regime.”

She said ALI will be launching P100 billion worth of residential projects and P15 billion worth of commercial and industrial properties this year.

For the residential business, ALI is increasing the share of its “core” or middle-income housing segment to 20 percent from 15 percent in 2023 as it noted that demand in this sector is recovering.

“We’re launching more and more every year. I think it’s just that this mix of launches favoring the premium is more reflective of market opportunities,” Dy said.

She explained that the upscale market has been more resilient during the pandemic and high interest rate periods and they had thus launched the bulk of their projects for this segment where the Ayala brand also has an advantage.

However, Dy said that since interest rates are seen to go down, ALI is preparing more projects for the middle-income segment so that they can launch anytime when there are more opportunities and when the market is ready.

She added that 52 percent of the residential projects will be horizontal and 48 percent vertical while 44 percent will be in Metro Manila; 38 percent in South Luzon; seven percent in Central Luzon; and 11 percent in Visayas and Mindanao.

Meanwhile, ALI Chief Finance Officer Augusto Bengzon said that, for the commercial leasing business, the firm will be adding 68,000 square meters of gross leasable area in new malls.

These will be in AyalaMalls Vermosa (38,000 sqm.), AyalaMalls Evo City (18,000 sqm.), and Park Triangle (22,000 sqm). For offices, ALI will be adding 98,000 sqm of GLA.

Bengzon said ALI will be increasing its capex budget this year to P100 billion from P86 billion in 2023 of which 34 percent will be for residential developments; 24 percent for estate development; 19 percent for land acquisition; 10 percent for malls; eight percent for offices; and five percent for resorts.

He said the company will be raising P50 billion from borrowings from banks or the capital market of which P25 billion will be used to fund capex and the balance will be for the repayment of maturing debt.

“We will continue to grow our businesses by leaning on our premium residential brands, optimizing the leasing assets, and expanding the GLA footprint,” said Dy.

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The article was originally published in Manila Bulletin and written by James A. Loyola.