Posted on 08:36 PM, December 28, 2009 [ BusinessWorld Online ]
The country’s largest property developer is seeking clearance from the Securities and Exchange Commission (SEC) to sell more “Homestarter” retail bonds, a home financing scheme.
The Homestarter Bonds require buyers to shell out as low as
P5,000 a month for 36 months, which can be used
as downpayment for Ayala Land, Inc.’s residential projects.
Listed Ayala Land, Inc. filed the request on Dec. 21 to issue about P1 billion in fixed-rate three-year bonds due 2013 with a 5% yield per annum. The issuance will be Ayala Land’s third tranche of Homestarter Bonds. The second tranche last September involved P504 million in bonds.
The Homestarter Bond was conceptualized by Ayala Land three years ago for those who want to park their money and at the same time save for a downpayment for Ayala Land projects.
BPI Capital Corp. is the issue manager and underwriter for the planned issuance.
“This offer is primarily targeted to benefit the low to middle-income market segment. Ayala Land’s objective is to encourage this segment to save sufficient funds to enable them to own real estate property in the future,” the company said in its prospectus.
Under the financing scheme, buyers need to set aside as low as P5,000 a month for a bond subscription over 36 months. The total P180,000 will earn 5% a year and will have an additional 10% bonus credit when used as downpayment for Ayala Land properties.
In 2006, Ayala Land launched its first Homestarter Bond, selling P169 million. A total of P125 million worth of Ayala Land properties were subsequently purchased.
Ayala Land’s net income for the January to September period declined by 8% to P2.9 billion as revenues decreased by 6% to P22.56 billion.
This was despite a 9% third-quarter net income growth to P1.05 billion.
Ayala Land shares closed at P11.30 apiece yesterday, slightly lower than the P11.50 closing price on Dec. 23.
Ayala Land offers products under three units -- Ayala Land Premier which targets the high-end market; Avida Land which offers products to the middle-income sector; and “affordable” brand Alveo Land.
The property developer had said it would offer products priced lower than those of its affordable brand, with low-cost and middle-income housing proving to be resilient during economic downturns.
To jump-start its entry into this sector, which is dominated by developers like Consunji-led DMCI Homes, Inc., the property giant plans to start developing a 20-hectare property in San Pedro, Laguna into 2,000 residential units priced between P600,000 to P1.25 million each.
Ayala Land had said this would increase its presence to 34% of households from the current 7%. Families that have a combined household income of at least P15,000 to P50,000 per month will be able to avail themselves of the new project, which will be launched in 2010.
Last November, Ayala Land established a new company to handle its latest venture in the real estate market -- small or pocket-sized “retail communities.”
Primavera Town Center, Inc. will handle the planning, development and management of small-format retail facilities or “neighborhood centers.”
The new retail spaces will rise within Ayala Land’s existing and planned “growth centers” across the country, and will each have a maximum size of 10,000 square meters of gross leasable area.
Primavera will spend P320 million for the development of five neighborhood centers in 2010. Ayala Land said it would open three to six neighborhood centers in the succeeding four years.
These pocket-sized retail outlets will be in places where Ayala Land has a major presence, which include Makati, Bonifacio Global City in Taguig, Nuvali in Laguna, and other areas in Luzon. -- J. B. F. Santos
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