Ayala Land expanding retail portfolio

MANILA, Philippines - Property giant Ayala Land Inc. (ALI) is aggressively expanding its retail portfolio through the launch of new shopping malls and department stores in its mixed-use developments.

Newly-created department store chain Wellworth plans to have 20 stores in the next five years, while three multi-billion peso shopping malls would be introduced to the market every year, officials said.

“The intention is to introduce Wellworth in our mixed-use developments. Whenever we have an estate development, our intent is to have a shopping center and a Wellworth,” said ALI chief operating officer Bernard Vincent Dy.

Investment for every Wellworth department store is roughly P500 million, said Cora Dizon, ALI vice-president and head of Business Development and Strategic Planning-Commercial Business Group.

The first branch of Wellworth, a joint venture between ALI and the Tantoco family, located at Fairview Terraces started operations late last week.

In 2012, ALI entered into a joint venture agreement with Specialty Investments Inc. (SII) of the Tantoco family’s Rustan’s Group that is one of the largest specialty retail firms in the Philippines. SSI, the company behind Zara, Prada, Lacoste and Debenhams in the Philippines, claims to have the largest and choice luxury upmarket fashion lifestyle portfolio through 72 brands and more than 250 free standing shops nationwide.

Dy said ALI would open at least three Wellworth department stores every year, dovetailing the mall expansion.

“It’s our strategy to be able to introduce these estate developments in major growth centers in the country. Whenever we have that, then we have the opportunity to bring in our various product lines,” Dy said.

New shopping malls would range from 10,000 square meters (sqm.) to 100,000 sqm., Dy said. Aside from Fairview Terraces, ALI is also completing the expansion of the Solenad retail strip in the Nuvali township in Laguna and the new phase of UP Town Center in Quezon City.

The pace of shopping mall expansion in the next few years would depend on land acquisition of ALI, Dy said.

“We continue to remain quite bullish. Our sentiments continue to remain favorable towards expansion,” Dy said.

The launch of more shopping centers, office buildings, hospitals, convenience stores, department stores and supermarkets is in line with ALI’s plan to achieve a balanced growth. So far, around 30 percent of the company’s revenues come from the recurring income portfolio.

The listed property development arm of the Ayala conglomerate is jacking up its capital spending to P70 billion this year as it commits to launch 78 projects worth P142 billion to ensure continuous growth in the coming years.

In 2013, ALI’s profits surged 30 percent to a record P11.74 billion from P9.04 billion in 2012 as consolidated revenues jumped 36 percent to P81.52 billion.

Hence, the property already breached the income target under its 5-10-15 program that was launched in 2009 amid the global financial crisis. It is a five-year plan ending in 2014 that aims to boost net income of ALI to P10 billion and return on equity to 15 percent.