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Ayala Land buys out Saudi firm in project

Posted on October 02, 2012 11:39:40 PM [BusinessworldOnline ]

PROPERTY DEVELOPER Ayala Land, Inc. has fully acquired the interests held by Kingdom Hotel Investments and its affiliate in a luxury hotel and residential development in the Makati City central business district, the local company said in a disclosure to the Philippine Stock Exchange (PSE) yesterday.

“Please be informed that AyalaLand Hotels and Resorts Corp., a wholly owned subsidiary of Ayala Land, has acquired the interests of Kingdom Hotel Investments and its affiliate in the Fairmont Hotel and Raffles Suites and Residences project in Makati [City]. This acquisition is in line with the company’s thrust to grow its commercial leasing business,” the disclosure read.

AyalaLand Hotels and Resorts paid $24.11 million for Kingdom Hotel Investments’ issued and outstanding shares, it added.

“We are excited about this project as this will contribute to the development of tourism for both Makati [City] and the Philippines. The Raffles Fairmont project presents the most luxurious and modern hotel development in the country today,” Jose Emmanuel H. Jalandoni, Ayala Land senior vice-president, said in a statement yesterday.

Kingdom Hotel Investments, an international hotel and resort real estate investment firm that is wholly owned by Saudi Arabian conglomerate Kingdom Hotel Co., has invested in 20 hotel operations in 15 countries in Asia, Middle East, North Africa, and Sub-Saharan Africa, information on that company’s Web site showed.

The transaction effectively secured Ayala Land’s complete control of the project, the company said. “Originally, AyalaLand Hotels and Resorts had a 20% stake in the project. With this, we now raised our stake to 100%,” an AyalaLand Hotels and Resorts spokesperson said in a telephone interview yesterday.

The 30-storey Raffles Fairmont -- composed of three segments: 237-unit luxury Raffles Residences, 32-suite Raffles Hotel, and 280-room Fairmont Hotel -- began construction in 2008 at the corner of Arnaiz and Makati avenues in Ayala Center, Ayala Land’s premier commercial hub in Makati City. It is scheduled to open in December.

Ayala Land’s hotel portfolio totaling 634 rooms consists of Hotel Intercontinental in Makati City and the Cebu City Marriott, and 150 island resort rooms in its Lagen, Milinoc, and Apulit Island (formerly Club Noah) resorts in El Nido, Palawan, the company’s end-June financial report showed.

This year, the developer said it will be opening the 349-room Holiday Inn and Suites Makati in Ayala Center, which is expected to be fully operational by early next year, as well as two boutique hotels in Bonifacio Global City and Cagayan de Oro City under the company’s flagship Kukun brand.

Ayala Land will also be beefing up its island resort complex in Palawan, by opening its Pangulasian Island Resort by the end of the year.

The company’s hotels and resorts business contributed P1.27 billion in revenues in the first half, up 15.46% from P1.10 billion in the same period last year.

Ayala Land was organized in 1988 when parent firm Ayala Corp. decided to spin off its real estate division into an independent subsidiary to enhance management focus on its property development business, according to data posted on the PSE Web site. It went public in 1991.

For 2012, Ayala Land had initially allotted a record P37 billion in capital expenditures (capex) to fund around 67 new projects that will yield projected sales of P90 billion, as well as for the acquisition of new properties, the firm said last February. The company later increased its 2012 capex to P47 billion, earmarking P10 billion more for unbudgeted property acquisitions and for its possible “strategic alliance” with the Ortigas family, BusinessWorld had reported last August.

Ayala Land grew its net income by 28% to P4.33 billion in the first half from P3.38 billion in the first six months last year, supported by double-digit gains across all its business lines, its latest financial report as of end-June showed.

Its consolidated revenues rose 18% to P25.02 billion from last year’s P21.25 billion in the same comparative periods, with a bulk derived from the company’s real estate business, while costs and expenses increased by a smaller 13.5% to P18.41 billion from P16.22 billion.

Ayala Land shares gained 10 centavos or 0.43% to P23.40 apiece at the end of trading yesterday from P23.30 last Monday. -- F. J. G. de la Fuente         
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