PHILIPPINE REAL ESTATE and RELATED NEWS in and around the country . . .
.
.

Ayala Land to go for even ‘lower’ market

Monday, May 25, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]


UNDER PRESSURE to stay afloat amid an economic slow-down, property giant Ayala Land, Inc. is looking at selling homes to a wider range of buyers, with the market for the more affluent ones shrinking.

The listed developer known for high-end projects is exploring the possibilities of offering retirement communities and condominium units priced even lower than existing projects already considered "low-end."

"We are studying that now. The new markets are still at a research stage," Rex A. Mendoza, senior vice-president for corporate sales and marketing, said in an interview.

Ayala Land’s board has ordered company executives to find a market for projects costing 20% less than the "affordable" segment, Mr. Mendoza said.

In response to the economic slowdown hitting the property markets, Ayala Land has shifted its focus to the middle and affordable segments, where newer market players DMCI Homes and SM Development Corp. have been making a killing.

The net income of Ayala Land went down by more than a fifth to P907 million from January to March, dragged down by the drop in revenues of its high-end arm Ayala Land Premier and the flat performance of middle-income and affordable brands Alveo Land and Avida Land.

An analyst said top company officials were "disappointed" over the performance of Avida Land.

Mr. Mendoza said the company has always been in the lookout for different products. He clarified that the group won’t venture into low-cost housing but will just "try to go 20% lower."

While plans are still on the drawing board, Ayala Land is looking at offering "walk-up" projects or those with no elevators — the first in the history of the company which spun off from the Zobel-led Ayala Corp. in 1988.

Another first for Ayala Land is a plan to build communities that will cater to the retirement market, especially retirees from Japan and South Korea.

"The project will likely be between Ayala Land Premier and Alveo. We are planning to come up with horizontal developments that will have a sense of a real retirement service community," Mr. Mendoza said.

These projects will have a clinic staffed by physicians. Houses won’t have stairs, and sidewalks would be "friendly" to the elderly, among other features.

Ayala Land has been coming up with ways to make its projects more affordable. In October, it will issue the second series of the Ayala Land Homestarter Bond, a financing scheme conceptualized three years ago in which investors save money for downpayments to Ayala Land projects.

The first Homestarter Bond involved investments of P5,000 to P25,000 a month over a three-year period with an interest rate of 5% a year. After the bond matures, customers can use the money to purchase from Ayala Land and its subsidiaries.

Mr. Mendoza said the Home-starter Bond could be offered yearly following the success of the first batch, pointing out that the market is in need of such a savings scheme.

The property firm has also agreed with Ayala-owned Bank of the Philippine Islands to hold an exhibit of all Ayala Land projects. The exhibit on May 30 and 31 will offer housing loans at lower interest rates to stimulate demand in the residential market.

Two months from now, the company will launch its first project in Pasig. The six-hectare Ametta Place will have 280 units priced at P7 million to P10 million. Ametta Place is expected to be completed by 2012.

Shares in Ayala Land went up by 1.26% or P0.10 to P8 per share last Friday. — Kristine Jane R. Liu

____________________________________________________________________________________

real estate central philippines
Copyright ©2008-2017