Posted on 09:10 PM, October 14, 2010 [ BusinessWorld Online ]
PROPERTY giant Ayala Land, Inc. wants to launch more projects next year, citing a favorable business climate.
For next year, Ayala Land plans to launch 12,000 residential units, matching this year’s target, and spend higher than the P27-billion capital expenditures for 2010.
The firm expects to maintain rapid growth recorded in the first half for the third quarter, an executive said late Wednesday.
“These aggressive launches will continue. We do not see any signs of demand slowing down. Even the macroeconomic [indicators are] favorable [and] interest rates are going down,” Jaime E. Ysmael, Ayala Land senior vice-president and chief finance officer, told reporters.
This year, Ayala Land increased its target to 12,000 units from an initial 9,275 units. It allotted P27.17 billion in capital expenditures.
“The biggest opportunity lies in the broad middle-income market served by [the brands] Avida and Amaia,” Mr. Ysmael said. “Across the board, it will be quite positive but the biggest volume growth will come from the broader middle-income market.”
Ayala Land operates under four major brands -- Ayala Land Premier for the high-end segment, Alveo Land for the middle-income segment, Avida for the “affordable” market, and Amaia for economic housing.
In the July to September period, the property giant may have duplicated first semester growth, he said. “We hope to sustain the growth momentum that has been exhibited over the first two quarters of the year,” Mr. Ysmael said.
The property unit of the Ayala group earned P1.32 billion in the second quarter, up by 10% on the back of across-the-board growth in its businesses. This brought net income to P2.51 billion in the first half, up by a third.
Aside from the residential segment, shopping centers and business process outsourcing office spaces continue to post growth, Mr. Ysmael said.
Sought for comment, Paul D. Balaoing, analyst at PCCI Securities, Inc., said: “[Ayala Land is] capitalizing on growth after the economic recovery.”
“The property sector is pegged to the economy,” Mr. Balaoing added.
Meanwhile, the property giant’s $220-million residential project in China will test the company’s mettle in the international market.
In August, Ayala Land joined the Sino-Singaporean venture Tianjin Eco-City Investment and Development Co. Ltd. The partners will develop more than 1,100 residential units within a 19-tower residential complex on a 9.78-hectare property.
This will be one of the first developments in the 3,000-hectare Tianjin Eco-City project in China.
“It could be a beginning of bigger exposure but our primary focus will be the Philippines,” Mr. Ysmael said.
Shares in Ayala Land closed P0.30 higher at P17.90 each yesterday. -- Neil Jerome C. Morales
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