ALI remains bullish, allots over P20B for capex in 2009

Amid a global economic meltdown, property giant Ayala Land Inc. will work as usual with plans to spend more next year or about same level as last year, according to a top company official.

 “Our capital expenditure budget for next year will be over P20 billion, if not more than the P24-billion set this year it would be same amount as this year,” said ALI president Jimmy Ayala.

Ayala noted that 2008 was a banner year for the company in terms of capex and revenues.

He said the company continues to take a cautious but optimistic approach to 2009.

“There would be no downgrading of projects. We’re making adjustments but we’re moving forward instead of being traditional. All projects will get finished on time,” said Ayala.

Ayala said the company may take on additional borrowings to fund its capital budget next year.  ALI currently has over P18 billion in cash.

Given the strong demand for low-to-middle-income housing, ALI will develop more subdivisions catering to these segments of the market. 

For its shopping mall operations, ALI will start redevelopment of Glorietta 1 and 2 next year with the establishment of a hotel, office building and condominium projects.

The company is expected to end 2008 with a total gross leasable area of 160,000 square meters or double the year earlier figure.  This is expected to increase by another 100,000 square meters next year with the addition of more office buildings and expansion of existing malls.

Ayala said ALI continues to see strong growth in the office sector next year.

Bulk of the 2008 capex went to the development of 5,600 new residential units from new projects and additional phases in existing projects.

About 30 percent was channeled to the expansion of its business process outsourcing space, significantly higher than the 12 percent a year earlier.  The balance will be used to fund the redevelopment of the Ayala Center and Greenbelt, and beef up its landbanking activities with focus on acquiring key sites in the Mega Manila area and other geographies with attractive and fast-growing economies.