Posted on 08:16 PM, January 17, 2010 [ BusinessWorld Online ]
Ayala Land, Inc. has officially formed a new brand to join the market for “economic housing” now dominated by the likes of Consunji-led DMCI Homes, Inc., Globe Asiatique Realty Holdings, Inc., and PHINMA Property Holdings Corp.
The Securities and Exchange Commission has approved the renaming of First Communities Realty, Inc., to Amaia Land Corp. First Communities was a unit of the former Laguna Properties Holdings, Inc., now known as Avida Land Corp., Ayala Land’s “affordable housing” unit.
Amaia Land will target the economic housing segment, a sector long snubbed by the country’s largest developer known for its upscale residential projects. It will initially be Avida Land’s sub-brand before becoming a wholly owned subsidiary of Ayala Land.
Ayala Land earlier said the formation of Amaia Land is part of the expansion of the company’s residential development operations. The real estate firm plans to infuse P1.08 billion over the next three years to fund Amaia Land’s operating expenses as well as the acquisition of land.
The start-up capital will cover an initial run of six projects in selected industrialized rural areas in Southern and Central Luzon, where demand for housing is expected to be strong. The new brand will likewise offer house-and-lot “starter home” packages with prices ranging from P600,000 to P1.25 million per unit.
To jump-start its entry into this sector, the property giant plans to start developing a 20-hectare property in San Pedro, Laguna into 2,000 residential units, for families that have a combined household income of at least P15,000 to P50,000 per month.
“Ayala Land expects to make a significant impact on the economic housing segment with an approach that will offer attractive design and high quality ... at a price point that is affordable [for the] country’s young and emerging households,” the company earlier said.
The low-income market constitutes approximately 90% of the total demand for housing in the country. There is a shortage of 3.8 million housing units in the Philippines, primarily in the socialized and low-cost category. This segment has mostly been ignored by major property developers.
Ayala Land had said Amaia Land would increase its market presence to 34% of households from the current 7%.
Ayala Land announced its plan to venture into the economic housing segment last year, citing the sector’s resiliency during economic downturns. Profits of the developer were hit hard in the first quarter of 2009 with pickup for high-end projects slowing down significantly.
It nonetheless managed to improve profits in the succeeding quarters.
As of September, the net income of the developer was down by just 8% to P2.9 billion with revenues down by 6% to P22.56 billion.
Ayala Land currently offers products under three units -- Ayala Land Premier which targets the high-end market; Alveo Land which offers products to the middle-income sector; and “affordable” brand Avida Land. 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. Primavera will spend P320 million for the development of five neighborhood centers this year. -- Kristine Jane R. Liu
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