PROPERTY MARKET. Ayala Land, Inc. president and chief executive office Anna Ma. Margarita (left) and chief finance officer Augusto Bengzon answer questions from the press in a briefing in Makati City on Tuesday (Feb. 20, 2024). The company will be spending PHP100 billion for property development this year. (PNA photo by Kris M. Crismundo)
MANILA – Ayala Land, Inc. (ALI) has set PHP100 billion in capital expenditure (capex) this year as its outlook in the property sector remains rosy, especially in the high-end market.
In a press briefing Tuesday, ALI chief finance officer Augusto Bengzon said 34 percent of this year’s capex would be spent on residential projects, 24 percent for estate development, 19 percent for land acquisition, 10 percent for malls, 8 percent for offices, and 5 percent hotels and resorts.
This year’s capex is 16 percent higher than ALI’s actual spending in 2023 at PHP86.2 billion, which exceeded the allotted capex for that year at PHP85 billion.
ALI will also launch a PHP115 billion property development in 2024, PHP100 billion of which are residential projects and PHP15 billion are new commercial and industrial projects.
Bengzon said that of the PHP100-billion residential launches this 2024, 80 percent are in the premium segment and 20 percent are core.
“I think we’re launching more and more every year. I think it’s just that this mix of launches favoring the premium is more reflective of market opportunities,” ALI president and chief executive officer Anna Ma. Margarita Dy said.
“It’s really reflective of how different segments of the market that have been affected by the pandemic and the increase in interest rates,” Dy added.
She added that the middle-income segment, which is heavily reliant on mortgage in acquiring housing units, is also more vulnerable to inflation and higher interest rates.
“It’s usually the middle market that I guess is more vulnerable to these changes and the premium segment is a little bit more resilient. That changes the behavior. And we’re just making sure that we are addressing the market that we feel is the most robust,” Dy said.
ALI remains ready to change the mix once the company sees that the middle-income segment has bounced back, Dy said.
“So we’re hoping, in our internal plans, maybe in three years time, we will be seeing our core come back. And if it’s sooner than that, we will be ready,” she added.
Most of these residential projects are horizontal development at 52 percent and the 48 percent are vertical residential projects.
In terms of locations, 44 percent of ALI’s residential launches will be in Metro Manila, 38 percent in South Luzon, 7 percent in Central Luzon, and 11 percent in Visayas and Mindanao. (PNA)
