By Zinnia B. Dela Peña
Monday, October 13, 2008 [ philstar.com ]
Facing rising costs, property giant Ayala Land Inc., is prepared to adjust its expansion plans by slowing down the pace of investment next year amid a deepening global economic downturn.
ALI president Jaime Ayala, however, stressed that the company continues to be optimistic about the prospects of the real estate industry but will remain cautious when carrying out expansion initiatives.
Ayala also reiterated the company’s commitment to keep all ongoing projects on track and within budget.
He said projects under the Ayala Group’s middle-income residential units Aveo and Avida continue to attract attention from consumers.
“We remain committed to completing all projects on time. But we will continue to monitor developments abroad. We don’t want to overbuild unless we’re ready for it,” Ayala said.
Ayala said demand for office space catering to the business process outsourcing industry remains robust despite the financial crunch.
As a result of the global credit squeeze, sales from overseas Filipino workers based in the US have declined. Historically, US sales account for nearly 50 percent of total OFW sales.
Sales from OFWs in the Middle East, however, have grown by 70 percent, mainly coming from AVida’s real estate projects.
ALI’s margins are expected to be under pressure this year due to higher costs of construction materials, escalating fuel prices and inflation.
Ayala said the company has no problem securing funding for its projects given its strong balance sheet.
ALI has earmarked P24.3 billion for its capital expenditures this year, 60 percent higher than in 2007. Bulk of the amount will go to the development of 5,600 new residential units from new projects and additional phases in existing projects.
About 30 percent will be channeled to the expansion of its business process outsourcing space, significantly higher than the 12 percent a year earlier. The balance will be used to fund the redevelopment of the Ayala Center and Greenbelt, and beef up its landbanking activities with focus on acquiring key sites in the Mega Manila area and other geographies with attractive and fast-growing economies.
