Ayala Land Inc.’s P15-billion investment in mall upgrades, alongside a broader push to refresh its hospitality portfolio, is beginning to deliver stronger returns as the property developer adapts to changing consumer behavior in the post-pandemic market.
The reinvestment program has helped drive rental rate increases of more than 20 percent in renovated retail spaces and lifted average daily room rates at refurbished hotels by nearly 30 percent, according to Mariana Zobel, Ayala Land senior vice president and group head of leasing and hospitality.
Speaking at the Philippine Business Conference on Wednesday, Zobel said the results underscored the potential of repositioning existing assets to remain competitive, although executing extensive renovations across the portfolio simultaneously proved challenging.
“In hindsight, I probably wouldn’t ever do it all at the same time again,” she said.
Ayala Land renovated five hotels last year to respond to evolving travel patterns, including the growing convergence of business and leisure trips. The upgrades reflect a broader effort to align its properties with how customers now work, travel, shop and spend their leisure time.
For retail, the gains suggest that investment in existing malls can support pricing power when improvements translate into more compelling experiences for shoppers and stronger propositions for tenants. However, sustaining those gains will depend on whether the refreshed spaces continue to attract foot traffic and spending as competition intensifies.
Zobel said the company is increasingly relying on market research to understand what motivates consumers to visit its malls, hotels and other developments. While accessibility, parking and convenience remain essential, she said these factors alone are no longer enough to distinguish one destination from another.
Developers must offer experiences that give customers a reason to choose their properties over competing venues, she added.
The strategy places consumer insights and targeted capital spending at the center of Ayala Land’s growth approach. Rather than relying solely on new developments, the company is seeking to extract greater value from existing assets through upgrades tailored to shifting demand.
The early performance gains provide an encouraging signal, but the longer-term test will be whether higher rents and room rates can be sustained while renovation costs and competitive pressures weigh on returns.
