Property developer Ayala Land Inc. on Wednesday said its capital expenses could reach P100 billion this year, up 16 percent from only P86.2 billion last year.
Of the amount, 34 percent would finance its residential business, 24 percent for estate development, 19 percent as continuing payments on land acquisition, 10 percent for acquisitions, 3 percent for offices and 5 percent for hotels and resorts.
Anna Margarita Dy, Ayala Land CEO, said while the company is optimistic of greater opportunities this year, the business will remain “pragmatic in addressing the potential challenges of a higher for longer interest regime.”
This relates to cost of funds likely harder to obtain this year as central banks, including the country’s Bangko Sentral ng Pilipinas, strive to balance the need to boost the economy by reducing interest rates without stoking inflation and keeping the cost of funds needlessly high.
Dy said the company is encouraged by the response to its initiatives like the market take up for Ayala Land Premier’s Park Villas in Makati launched in December, which is now 20 percent sold.
Alveo Land Corp.’s Parkeast Place, the brand’s first development in Bonifacio Global City in seven years is already 25 percent sold only eight months after launch, he noted.
Dy said Ayala Land looks to launch P115 billion worth of products this year, 80 percent of which are premium residential and commercial lots.
The company earlier announced setting aside P13 billion to redevelop its flagship malls starting with the temporary closure of its Greenbelt property for repositioning as a luxury mall, according to Dy.
“We will soon start work in TriNoma, Glorietta 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 revealed a broad renovation plan on two of its resorts in El Nido in Palawan and four hotels this year “to bring the customer experience to the world class levels that we aspire for”.
Ayala Land also broke ground at two new office towers in Vertis North after its first three office buildings in the business center were occupied in full from its opening. The new office buildings will add 82,000 square meters of gross leasable area to its 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 square meters of mall GLA, 500,000 square meters of office buildings and 4,000 hotel rooms by 2028,” Dy said.
Augusto D. Bengzon, Ayala Land chief financial officer, said the expansion should not significantly change the revenue mix with 60 percent of the top line still coming from the residential business and the remaining 40 percent from leasing.
He said the company could raise P50 billion fresh funds this year half of which will fund its capex and the rest will fund maturing obligations.
