AYALA Land Inc. (ALI) is so bullish about the Philippine real estate market, that the property giant is further expanding across all its business segments this year, a company official said.
In a press briefing last week, Chief Finance Officer Jaime Ysmael said ALI is expanding all its businesses—residential, office, malls, and hotels.
Ysmael said the firm’s bullish outlook is backed by its current land bank, which is composed of almost 9,000 hectares of land.
“So, we’re happy that we have the land bank in key locations and we are really concentrating on developments in growth centers that serve as magnets for multiple types of things like residential offices, shopping centers, as well as hotels,” said Ysmael. “So, that will give us a better chance of getting a better share of the market. On that basis, we remain optimistic.”
Ysmael said ALI’s capital expenditure budget for is around P85 billion, slightly higher than its P82 billion capex in 2015.
He said the bulk of the investment would go to ALI’s residential segment, while a significant amount is being earmarked for more land banking.
Specifically, the CFO said 40 percent of ALI’s 2016 capex budget would be spent on residential development, 16 percent for malls, eight percent for offices, four percent for hotels, and five percent for resorts and estates, nine percent for other investments, and 18 percent, or around P15 billion, for land acquisition.
“So, the number is lower than what we’ve spent in the past acquisitions. The bulk will now be concentrated on, I guess, completing the projects that we have started for all the business lines that we are in,” Ysmael said.
On the potential slowdown in overseas remittances from the Middle East, Ysmael said the prospect would not significantly affect the firm, since sales from the Middle East market is relatively low.
“In our case, our percentage of OFW sales is low compared with that of our competitors, where it’s around five percent. ALI’s Middle East component is about three percent,” Ysmael said. “Most of our sales come from Asia and North America. We believe that the effect would not be that significant, if the Middle East market becomes difficult.”
Ysmael said ALI tries to cater to all market segments.
“ From high-end to low-end, we will just launch in areas, where we believe the market is present. We will just try to take advantage of the opportunities in many locations,” Ysmael concluded.