Posted on 10:37 PM, April 14, 2010 [ BusinessWorld Online ]
PROPERTY GIANT Ayala Land, Inc. plans to raise a minimum $300 million in the second half from real estate investment trusts (REIT) enabled by a new law.
At its annual stockholders’ meeting in Makati, Ayala Land also said it would double net income to P8 billion in 2014 through new projects and the expansion of existing ones.
“Based on initial advice we have been getting from our financial adviser, a size of about $300 million is appropriate for a company like Ayala Land,” Jaime E. Ysmael, Ayala Land senior vice-president and chief finance officer, told reporters.
Ayala Land has appointed JP Morgan and BPI Capital Corp. as financial advisers for the REIT foray.
In December, the REIT bill, which will allow companies to use pooled capital of investors to buy and manage income-earning property and mortgages, lapsed into law.
Mr. Ysmael said the amount to be raised would account for a third of the capitalization of Ayala Land.
Ayala Land Chief Executive Antonino T. Aquino said the firm’s REITs would involve retail and commercial buildings.
Ayala Land plans to launch five boutique hotels nationwide this year. It will be a “synergy” of residential and commercial businesses, Jose Emmanuel H. Jalandoni, hotel group head of Ayala Land, told reporters.
The REIT law grants tax incentives while requiring firms to allot 90% of distributable income to shareholders.
Ayala Land is aiming at doubling net income to about P8 billion by 2014. “I think we will be able to see quarter on quarter growth,” Mr. Aquino said.
Ayala Land will launch more than 9,000 residential units as part of P27.17 billion in capital expenditures for the year.
The firm had P15.5 billion in cash at the end of 2009 and P12 billion in untapped short-term credit lines, Mr. Ysmael said.
Shares in Ayala Land, which recorded a 16% drop in net income to P4 billion last year, shed P0.50 to close at P13.50 apiece yesterday. -- Neil Jerome C. Morales
