Ayala Land to chart new multi-year expansion program

MANILA, Philippines - Property giant Ayala Land Inc. (ALI) is charting a new multi-year expansion program targeting to maintain its annual double-digit growth trajectory in the next three to five years, banking on the strength of the economy and the property sector.

The listed firm, which is wrapping up a five-year expansion program that started in 2009, will source its profit growth from the strong performance of the residential, commercial leasing and office projects nationwide, executives said.

“Our sense is if the economic environment continues to be similar with what we are experiencing now, then we could continue to do fairly good growth rates for the next three to five years,” said ALI president and CEO Bernard Vincent O. Dy.

“We’re currently at 25 percent [growth] so I think it’s reasonable to expect at least in the foreseeable future that we will have 15-20 percent growth,” Dy said.

ALI posted a 25-percent earnings growth to P7.1 billion in the first half from P5.6 billion a year ago amid the improved performance of the residential, shopping center, office, and hotels and resorts businesses units.

In 2013, ALI’s profits surged 30 percent to a record P11.74 billion from P9.04 billion in 2012.

Hence, the property firm 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.

In the past years, the property arm of the Ayala conglomerate has positioned itself to take advantage of the robust economic growth.

Dy said the company has numerous estates nationwide as it beefed up its landbank in the past five years.

“We’re actually well-positioned to take advantage of the economic growth the country is experiencing and in the various growth sectors,” Dy said.

ALI chief finance officer Jaime E. Ysmael said the property giant has launched various product lines for different segments of the residential market, as well as for the office sector, shopping centers and hotels.

ALI is operating under five major brands -- Ayala Land Premier for the upscale segment, Alveo Land for the upper and middle-income segment, Avida Land for affordable housing, Amaia Land for economic housing and BellaVita for socialized housing.

“We have the products and the landbank to provide that growth. We have to make sure the execution [of the plans] is there,” Ysmael said.

“Across all forms, we’re still in expansion mode,” Dy said, adding that the property firm’s residential business continues to benefit from low interest rates while consumption growth fuels the improvement in shopping malls’ performance even as foreign companies are still looking for office space in the Philippines.

The listed property firm committed to spend P70 billion this year, up from P66.26 billion in 2013, to complete ongoing developments and new launches to help sustain the growth trajectory in the coming years. It also plans to launch 78 projects consisting of 30,000 residential units with an estimated value of P142 billion.