Ayala Land retains 2020 revenue targets

MANILA, Philippines — Ayala Land Inc. (ALI), the property arm of the Ayala Group, is sticking to its 2020 revenue targets even with the sale of Family Mart and the possible sale of QualiMed.

Augusto Bengzon, ALI chief finance officer and group treasurer, said such developments would have no impact on the company’s revenue stream. Family Mart, for instance, is just small in terms of asset size.

“We don’t see it as having significant impact on our 2020 plans,” Bengzon said.

Asked about the rationale behind the sale of Family Mart, Bengzon said the company believes the brand could grow more under the Phoenix Petroleum brand.

“We think the brand can go grow more under Phoenix. There is synergy with Phoenix’s 500 gas stations,” he said.

Davao-based businessman Dennis Uy acquired Family Mart, saying that it would complement his retail gasoline station business, Phoenix Petroleum.  

Meanwhile, ALI is also looking to sell QualiMed Health Network, which is a partnership with the Mercado Group. QualiMed has at least four operating hospitals with a combined capacity of more than 400 beds. It also has several facilities around the country.  

ALI’s plan is to grow the company’s net income by an average of 20 percent to reach P40 billion by 2020.

In 2016, net income grew to P20.9 billion, an increase of 19 percent. 

Bengzon said that to achieve the target, the company has come up with a sustained and balanced growth strategy.

Under this plan, 50 percent of the growth will come from property development – divided equally between horizontal and vertical projects and 50 percent from leasing such as malls, office hotels and resorts.

A key component of the 2020 growth plan is to triple ALI’s leasing assets with a focused completion of investment properties.

For the malls, for instance, ALI is targeting to grow its gross leasable area to 3.10 million square meters (sqm) by 2020 from 1.66 million this year, while its office space is targeted to grow to 1.5 million square meters from 840,000 planned for 2017. These offices are headquarter type offices and business process outsourcing-type facilities.

Meanwhile, for its hotels and resorts, ALI plans to build a portfolio of 6,000 rooms by 2020 from a target of 2,000 rooms by the end of the year. These are comprised of SEDA Hotels, island resort and estates and other international brand formats.

Bengzon said ALI expects to add 190,000 sqm of mall space and 180,000 sqm of office space by the end of this year and to add likely the same level for 2018.