ALI eyes P100B capex

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Ayala Land Inc. expects capital expenditures for the year to hit P100 billion, up 16 percent from the P86.2 billion actual spending last year.

Anna Margarita Dy, Ayala Land chief executive officer, said  the company is optimistic about opportunities for 2024 but that it remains “pragmatic in addressing the potential challenges of a higher for longer interest regime.”

“Based on his latest monetary policy report, the BSP (Bangko Sentral ng Pilipinas) expects the economy to remain intact over the medium term, but operates slightly below its potential. GDP could settle below the cabinet level Development Budget Coordination Committees target of 6.5 to 7.5 this year, and even until 2025,” she said.

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Of the capex, 34 percent would go to the residential business; 24 percent for estate development; 19 percent for continuing payments on land acquisition; 10 percent for more acquisitions; 8 percent for offices; and 5 percent for hotels and resorts, Dy said the company is encouraged by the market takeup for Ayala Land Premier’s Park Villas in Makati launched in December 2023 at $9 million per unit, which is now 20 percent sold.

Alveo Land Corp.’s Park East Place, the brand’s first development in Bonifacio Global City in seven years, is 25 percent sold eight months after launch.

Dy said Ayala Land is looking to launch P115 billion worth of products, 80 percent of which will be premium residential and commercial lots.

The company is spending P13 billion for the redevelopment of flagship malls – TriNoma, Glorietta, Greenbelt and Ayala Center Cebu – starting with the closure of Greenbelt which will be positioned as a luxury mall, according to Dy.

“We will soon start work in TriNoma, Glorietta 2 and Ayala Center Cebu. This is envisioned to bring up the unique value proposition for each of our malls and bring them to their full potential,” Dy said.

“Greenbelt One is a total rebuild and will have its own budget. Works will start by the second quarter,” she added.

Dy said there is a “broad renovation plan” for the company’s resorts and hotels – two resorts in El Nido and four hotels – this year to bring the customer experience to the world class levels that we aspire for.

Ayala Land broke ground for two new office towers in Vertis North after its first three office buildings in the business center have become fully occupied since opening, with the new office buildings adding 82,000 square meters (sq.m.) of GLA to the office portfolio.

“We will continue to grow the business by doing the following – leaning on our premium residential brands and horizontal projects utilizing our existing landbank, getting our leasing assets to operate at their full potential and expanding our leasing footprint with an additional 800,000 sq.m. of mall GLA, 500,000 sq.m. of office buildings and 4000 hotel rooms by 2028,” Dy said.

Augusto Bengzon, Ayala Land chief finance officer, said the expansion will not significantly change the company’s revenue mix with 60 percent of the topline still coming from the residential business and the remaining 40 percent from leasing business.

“Furing that period, the residential business is also expected to be growing,” he said.

Bengzon said Ayala Land is tapping the debt capita market for a P50- billion funding to partially finance general corporate requirements and refinance maturing debt obligations.

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