AYALA Land Inc. (ALI), the country’s second-largest property developer, said capital expenditures (capex) for the year will hit P110.8 billion, up from its P91.1 billion capital spending last year.
Of the amount, residential projects will account for 43 percent, leasing from shopping malls, offices and resorts to account for 31 percent, 12 percent for land acquisition and the balance for estate developments and other investments.
ALI CFO Augusto Bengzon said the company plans to launch P125-billion worth of projects, including hotels, to drive growth.
“If you will look at our historical capex spend, the previous five years, that’s an average of P80 billion,” Bengzon said. “So 2018 will be a landmark year, the transition for the company, given that we see a good prospect in the market and, at the same time, we have that platform, which we can unlock to allow us to grow.”
Bengzon said ALI may tap the capital market to partly finance this year’s capital spending. The company is looking at a P10-billion bond offer pending the completion of a pending the bond sale in the market by San Miguel Corp. and SM Prime Holdings Inc.
The capital spending will be partly financed by “a combination of bonds and some bilateral loans,” he added.
“Coming to 2018, we are feeling good of the prospects. Back in 2014 we launched a 2020 plan to reach P40 billion by 2020 and we continue to be on track,” ALI President Bernard Vincent O. Dy said.
“Between 2018 [and] 2020, to be able to get to P40 billion, we need to grow by 17 percent a year,” Dy added. “We feel this is achievable, primarily because as I call this our country continues to grow, macro-fundamentals continue to be supportive of growth.”
Dy said a strong platform for growth for ALI is its 10,285 hectares of landbank—25 estates all over the country—and the company’s presence in 55 growth centers nationwide.
“Our capex is significantly higher year on year,” he added. “So this is [going to] be an all-time high. And that is an indication of the opportunities that we see in the market.”
The company is launching P100 billion worth of residential and office space this year and P25 billion worth of leasing spaces.
ALI now claims to be the largest office landlord in the Philippines with an office gross leasing area of 1.02 million square meters (sq m), overtaking Megaworld Corp. The company is now the third-largest hotel and resort developer at 2,583 rooms.
There will be about 280,000 sq m of retail spaces that the company will be opening this year, including the 23,000-sq-m gross leasable area One Bonifacio High Street and the 54,000-sqm Circuit Mall in the former Santa Ana race track.
In the office space, ALI will open this year the 20,000-sq-m Ayala North Exchange and the 38,000-sq-m Vertis North BPO 3.
In the hotel and resorts segment, the company will be opening this year the 19-room Huni Sicogon and the 153-room Seda Lio.
Margarita Dy, ALI strategic landbank management group head, said the company is also set to launch another estate in the Visayas-Mindanao area after January’s launch of the 35-hectare Parklinks in the Pasig City and Quezon City area, and another pocket development of around 11 hectares to 12 hectares in Quezon City.