ALI to expand in Malaysia, raises P8B

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Property giant Ayala Land Inc. (ALI) plans to increase investment in Malaysia, specifically in development and construction firm MCT Bhd, it said after its annual stockholders’
meeting on Tuesday.

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“In Malaysia, we continue to explore, further increase in our exposure either directly through specific projects or through MCP,” Mean Dy, senior vice president of ALI and the head of its Strategic Landbank Management Group, said in a press briefing at Fairmont Hotel in Makati City.

She clarified that ALI’s involvement in Malaysia’s real estate industry would be “assessed on project-by-project basis.”

Last October, ALI disclosed to the Philippine Stock Exchange (PSE) that it raised its stake in MCP from 9.16 percent to 32.95 percent for $92 million.

Its investment would allow the Philippine developer to enter the Malaysian market with an already experienced team, it earlier said.

Long-term plans include adding “value” to MCP, so it could become a key player in the Malaysian real estate market.

Dy said ALI now seats on MCP’s board of directors, as well as in the executive and investment committees.

“We entered because of the strong leadership and the organization. The company is fortunately performing as we expected,” she added.

“They continue to serve the middle income market in Malaysia, which remains quite robust despite the external issues that may have affected the country.”

However, ALI has no plans for now to put the Ayala brand in MCP’s development arm.
Dy said Ayala is “very involved” in “master planning” new sites, and they will be “increasingly involved” in MCP’s leasing business.

There were earlier reports that ALI was also looking at Vietnam, Indonesia and Myanmar. These would have to take a backseat for now as evaluation and assessment of those markets are still in the works.

Bobby Dy, ALI president and chief executive officer, maintained that the company is now focused on residential, retail and leasing businesses in the Philippines.
It would also focus more on its equity stake in Malaysia.

MCT Bhd, which was established in 1999 as a construction company, is a property developer specializing in mixed-use projects that include retail, office, hotel and mid- to-affordable residential units.

It is listed under the main market of Bursa Malaysia, and has several ongoing projects in One City Subang Jaya and Cyberjaya in the Klang Valley.

Ayala Corp. is also raising another P7 billion “in the next few weeks” from fixed-rate bonds due 2025, Jaime Ysmael, chief finance officer, said.

This would be the “second and last” tranche of fundraising this year for the parent company.

Ysmael said Ayala’s subsidiaries would have their own fund raising programs, but the P15 billion including the P8 billion announced a few weeks ago is the maximum Ayala intends to raise.

The board has approved the P7-billion fixed-term bond. The company intends to capitalize from the momentum of the P8-billion loan the company announced in February.

Ysmael said the terms and the interest rate for this loan would be similar to the P8 billion, which was used to invest in MCT Bhd. (P2.9 billion), the acquisition of a 26-hectare property at the South Road Properties in Cebu (P1.3 billion), and the construction of mall, office and hotel projects at its mixed-use developments Vertis North in Quezon City, Circuit in Makati and South Park District in Muntinlupa (P3.5 billion).

“It’s still the same tenor. We just shortened it a little bit by a few days. So, it’s less than 10 years, just to ensure that we deliver in our maturity towers of P15 billion maximum debt at any point in time,” Ysmael said.

“The rate is very similar to what we’re able to achieve in the first P8 billion we offered. Basically pretty much the [same]terms. The interest rate is very similar to what we issued a couple of weeks ago,” Ysmael said.

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