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ALI set to accelerate capital spending

By Jenniffer B. Austria | Posted on Aug. 12, 2013 at 12:01am |
Ayala Land Inc., the country’s biggest property developer, said it will accelerate capital spending and project launchings in the second half of the year amid a favorable outlook on the industry and the overall economy.
Ayala Land chief finance officer Jaime Ysmael said the company was committed to spend the balance of P42.5 billion in capital expenditures in the second half of the year as part of an aggressive program.
Ayala Land in the first six months of the year spent P23.2 billion in project and capital expenditures, up 24 percent from P18.7 billion year-on-year. It spent the bulk of the capital spending budget for residential development (33 percent), land acquisition (23 percent), offices (17 percent), shopping centers (16 percent) and hotels and resorts (3 percent).
The first half-budget accounted for just 35 percent of the P65.7-billion programmed spending for 2013.
“The economy remains favorable, driven by strong remittances, consumer spending and low interest rates. We will accelerate spending for the remainder of the year,” Ysmael said.
Ysmael said the company would also focus on boosting office development and mixed-use communities.
Ayala Land is close to acquiring five office buildings in Bonifacio Global City owned by Apollo Global Real Estate of US billionaire Leon Black.
A highly-placed source earlier said Ayala Land submitted the highest bid to acquire Apollo’s stake in the five office buildings with a total gross leasable area of 147,000 square meters.
The source said Ayala Land’s bid was P5 billion higher than the next offer, which was submitted by Robinsons Land Corp.  The source did not specify the exact bids of Ayala Land and Robinsons Land.
Apollo Global Real Estate, which has about $9 billion of assets, is the property investment arm of New York-based Apollo Global Management LLC, a global alternative investment manager with $113 billion in assets run by Black, who was a co-founder of the company.
The towers on sale include the Net Plaza, Net Quad, Net Cube, Net Square and Net One Center which are fully leased. The tenants include Accenture Plc, HSBC Holdings Plc, Deutsche Bank AG and JPMorgan Chase & Co.
Ayala Land last week reported that first-half net income grew 30 percent to P5.62 billion from P4.33 billion on year, fueled by the strong performance of its property development, commercial leasing and construction businesses.

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