By Zinnia B. Dela Peña (The Philippine Star) Updated February 22, 2010 12:00 AM
MANILA, Philippines - Property giant Ayala Land Inc. expects to generate P40 billion in sales from the 9,200 residential units to be disposed off this year, according to a top company official.
ALI chief financial officer Jaime Ysmael told reporters that the 9,200 units up for sale comprise all lines of its business units - Ayala Land Premier (which is best known for its exclusive and distinctive developments that appeal to the high-end market), Alveo Land Corp. (which targets the young urban professionals), Avida (which caters to middle-income families aspiring to own their first home), and the newly-launched Amaia (which caters to the economic housing segment).
Ysmael said the initial project of Amaia – Amaia Scapes will offer 2,000 units located in a 20-hectare property in San Pedro, Laguna priced at between P600 million and P1.2 million. The first 1,300 units will be launched within the year targeting families that have a combined household income of P15,000 to P50,000 per month.
ALI has earmarked P1 billion over the next three years to develop six projects in selected industrialized rural areas in Southern and Central Luzon, where demand for housing is expected to be strong.
ALI, known for building upscale residential projects, has changed its tack by venturing into the low-cost housing segment, which has proven to be the most resilient amid economic downturn. The global financial crisis, which has seen a squeeze on ALI’s profits as residential sales faltered, prompted the company to slow down construction of some of its high-end projects.
For this year, however, ALI has set a record capital expenditure budget of P27.2 billion to cover expenses related to the launch of new residential and leasing projects, the completion of projects currently under development, as well as some possible land acquisitions “as the company aims to further broaden its presence in the country.
The 2010 capex, which is 68 percent higher than the amount spent the previous year, includes the company’s entry into the development of boutique hotels with the first one to rise in the booming Bonifacio Global City. Estimated to cost less than P1 billion, the boutique hotel which will be under a still unnamed Ayala brand, will make available 175 rooms priced under $100, Ysmael said.
Another hotel, which will be operated and managed by a foreign brand, will rise in Ayala Center, offering a total of 350 rooms.
Ysmael said funding for ALI’s capex will come from pre-selling activities, the debt market and bank loans. He said the company, which has P15 billion in cash, may borrow around P10 billion.
Alfonso Reyes, chief investor relations officer for ALI, said the company’s aggressive stance for this year is buoyed by improving market sentiment, strong remittances from overseas Filipino workers, stable interest rates and positive gross domestic product figures.
To further enlarge its geographic coverage, ALI is expanding in Baguio, Angeles in Pampanga, Subic, Cebu, Cagayan de Oro, Davao, Iloilo and Bacolod.
In Baguio, ALI expects to begin construction of a BPO (business process outsourcing) complex and retail component within the 25-hectare Camp John Hay tourism and leisure estate. Initial plans involve the development of six buildings with four storeys and several retail stores and dining outlets.
The BPO facilities will make available about 40,000 square meters of leasable space while the retail component will offer 7,000 square meters of space.
In Subic, ALI continues to develop a mix of retail, BPO and residential components to keep the area alive.
Following the public’s strong reception to its Marquee mall in Pampanga, the company is preparing a mid-rise residential condominium project right across the mall.
In Davao, where ALI jumpstarted its entry with the lifestyle mall, Abreeza Mall, new residential developments with a BPO complementary project are now being planned for. Similar mixed-use developments are in the pipeline in Cagayan de Oro.
Northpoint, a project of Ayala Land Premier in Bacolod, will launch a new commercial development along the main road fronting it, making the area a multiple growth center.
In the Greater Manila Area, where ALI focused largely in Makati and in the South, the year 2010 sees the property firm going ahead with plans to develop the North Triangle area in Quezon City.
To further augment sales, ALI is also building neighborhood and community centers to support residential and BPO developments.