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Ayala Land to sustain 33% growth until yearend

Posted on November 20, 2011 10:59:03 PM [ BusinessWorld Online ]

AYALA LAND, Inc. expects to sustain until the end of the year the 33% profit growth seen as of September as residential sales and leasing income remain strong, an official said late last week.

“For the year-to-date, we are already at 33% in terms of net income,” Jaime E. Ysmael, Ayala Land chief finance officer, told BusinessWorld in a chance interview, referring to a rise in nine-month profits to P5.932 billion from P4.445 billion a year ago.

“[I think yearend growth will be] within that vicinity… It will be consistent with the first three quarters performance,” Mr. Ysmael said.

This could mean P7.26 billion in net income by yearend based on the P5.46 billion booked in 2010.

“[The growth will] still be because of strong residential sales growth,” he explained, noting however that residential projects will be the main driver.

Mr. Ysmael had earlier said the average monthly sales take-up for residential launches has reached P4 billion while improvements in commercial leasing operations have been sustained.

The company had also said that it remained positive that it would meet its 20,000-unit target by the yearend, as it eyed to spend around P13 billion to build more than 10,000 units in the last quarter, on top of the 10,045 residential units already launched in the first nine months.

The company meanwhile expects 2012 “will continue to be a good year,” Mr. Ysmael said.

“[There are] a lot of positive drivers for the economy… and remittances continue to grow. BPO (business process outsourcing) activities [are robust] as well,” he noted.

“Interest rates remain to be low. There is high liquidity in the system.

So, overall, the macroeconomic variables favor the continued growth of the real estate industry,” he added.

“As a result of which, we are aggressively launching projects next year similar to this year.”

The developer, for instance, had announced its entrance in the socialized housing market with is Bella Vita brand.

The firm said this was meant to cater to the low-end market, with units priced at P400,000.

The first project, which will be located in General Trias, Cavite, is further made accessible by halving the downpayment to just 5% of the sales price instead of the 10% standard.

“We will introduce innovation with new product features, which will hopefully be accepted by the market. But, for now that’s the price point that will be concentrating,” Mr. Ysmael said.

The property developer currently operates four residential brands catering to different markets.

Shares of the company slid by 2.6% to P16.48 apiece on Friday.

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