Property developer Ayala Land Inc. said it is set to borrow between P8 billion and P10 billion this year for its capital expenditures including the completion of projects that it had already started.
The company said it is looking at borrowing more to refinance its debt and replace it with cheaper ones.
Augusto Cesar D. Bengzon, the company’s CFO, said the company will borrow an additional P30 billion to refinance its debt, as rates have come down further since the company tapped the capital market since last year.
“Rates have come down further and we’d like to refinance our debt. As you know we really don’t have high interest rate debt because our credit spreads our quite low but we see still opportunity because rates have come down. So we will be actively refinancing our capital market debts, our bond, as well as our bilaterals [bank loans]. There’s quite an activity for 2021 for our treasury team,” Bengzon said.
All of its fund raising this year will be peso denominated.
“What we are doing is that we are actively pre-terminating high cost debt and will going to replace it with lower cost debt as interest rates have come down significantly and we’d like to take advantage of that opportunities that it present,” he said.
Bengzon said the company will soon launch its 4-year bond from which it hopes to raise as much as P6.25 billion.
The country’s second largest property developer will also refresh its P50 billion in shelf registration with the Securities and Exchange Commission.
The company said it will spend some P88 billion the year, and launch projects worth some P100 billion. This is higher than last year’s P63.7 billion in revised capital expenditures, mainly for the completion of residential and commercial leasing assets, with a portion spent on land acquisition and development of estates.
Of this year’s spending, some P38.8 billion will be for Avida Land, P37 billion for Alveo Land, P17.2 billion for Amaia Land, P12 billion for Ayala Land Premiere and P0.3 million for Bellavita.
Some 62 percent of these projects are for high-rise buildings, 37 percent are for horizontal and 1 percent for the leisure.
About half of its projects are still located in Metro Manila and the rest are scattered in several parts of the country.
The company is expecting a “sharp recovery” this year, but it admitted that it will still take them two to three years to reach its 2019 figures.
Ayala Land said most of the spending this year will be earmarked to finish its ongoing construction as it will delay some of the projects that it has previously set to launch this year.
The company is still looking to replace some 4 percent of its office space, or about 40,000 square meters, that will be left vacant by the Chinese online gaming operators, mainly located in its Circuit Makati project.
For its shopping malls, the company provided some P6.1 billion in rent condonation last year, which it may continue this year depending on the lockdown situation in country.
It is now offering a variable rent discount of 5 percent for food stalls and 3 percent for non-food and as much as 50 percent discount for those that have fixed rent in its malls.
The company’s income fell 74 percent last year to P8.72 billion from the previous year’s P33.18 billion, its first drop in earnings since the global financial crisis.