Ayala Int’l eyes US property market

Ayala International Pte. Ltd. (AIPL), the holding company for the Ayala Group’s international operations, is exploring opportunities in the US property market to take advantage of a cyclical reduction in prices and values.

Ayala Corp. managing director Rufino Luis Manotok said its subsidiary AIPL is looking at some projects which can generate cash and income to ensure its long-term growth.

AIPL is repositioning its portfolio towards more stable property markets that will provide depth and breadth for deal sourcing and investment disposal.

At present, the firm has residential and commercial property investments in Singapore, Hongkong, Japan and Australia.

AIPL will seek partners, typically medium-sized real estate developers, which require capital to continue to expand their businesses.

To facilitate the search for suitable partners and investments, AIPL has established a base in San Francisco, California last year.

Manotok said AIPL’s approach to property investment in the US is not limited to equity but may also include debt or quasi-debt financing.

Apart from this, AIPL is looking at the development of two residential projects with a joint venture partner but is being prudent by closely monitoring the market trends before either project is commenced.

Last year, the company chalked in a net income of $11.8 million. It has retired nearly all of its debt and generated a healthy cash balance of $54 million through the divestment of some investments.

AIPL’s most significant transaction in 2002 was the sale of the Olderfleet, an office and park building in the Melbourne commercial and business district to a property trust. The sale was the culmination of an extensive refurbishment and successful leasing program started in early 2001.

It now owns 100 percent of its property business in Singapore following the privatization of Ayala International Holdings Ltd.

Despite the general weakness of the Singapore market, the Forum, a shopping and office complex along Orchard Road in which AIPL has a minority interest, performed better than expected.