Ayala Land Inc. (ALI) recorded a 12% increase in net income to P15.2 billion in the first six months of 2019 while total revenues increased by 4% to P83.2 billion during the period. This was driven by the sustained growth of ALI’s property development business led by office sales, complemented by the strong topline growth of its commercial leasing businesses. The positive macroeconomic environment in the first half of the year provided the growth platform for the company.
The company’s extensive portfolio has allowed it to maximize the demand for residential, office and commercial properties, generating real estate revenues of P81.9 billion. Property development revenues amounted to P58.9 billion as supported by the office for sale segment which grew more than two-fold to P10.1 billion and commercial and industrial lot sales which increased by 11% to P4.3 billion. Meanwhile, commercial leasing revenues jumped to P18.6 billion, a 16% increase from the previous year.
“We continue to benefit from the strong economic growth of the country. Results from our various business lines continue to be good, with notable performances in our leasing portfolio and the sales of office condominiums and commercial lots. Moving forward, we remain positive on demand across all market segments and plan to increase the level of product introduction in the second half of the year,” said ALI President and CEO Bernard Vincent O. Dy.
The company’s capital expenditures reached P49.5 billion in the first half of the year to sustain its residential and leasing asset buildup. Residential revenues registered at P44.5 billion, 11% lower than the previous year mainly due to the full sell out and completion of successful projects by ALP and ALVEO. Meanwhile, Avida and Amaia continued to exhibit growth from the contribution of its ongoing projects. Avida generated P13.6 billion in revenues, 28% higher than P10.6 billion last year. Amaia on the other hand, recorded revenues of P3.7 billion, a 19% increase from P3.1 billion in the previous period.
Sales reservations remained steady at P72.3 billion as local Filipinos continued to drive demand, comprising 70% of the total buyers. This was supplemented by sales from Overseas Filipinos comprising 13% while sales from other nationalities amounted to 17%.
A total of 13 projects valued at P19.5 billion went to market in the first half of 2019. The company plans to ramp up launches in the second half with a bulk of the projects to be launched within the last two quarters of the year. Unbooked revenues increased by P3 billion from the first quarter of 2019, reaching a total of P147 billion which will be recognized in the next 3 to 4 years based on percentage of completion.
For ALI’s commercial leasing business, shopping centers revenues grew 12% to P10.3 billion, supported by same mall revenue growth of 11% given the increased contribution of Ayala Malls Feliz, Circuit Makati and Capitol Central, supplementing the strong operations of Glorietta and Greenbelt in Makati, and Ayala Center Cebu. Office leasing revenues also surged 25%, reaching P4.6 billion as newly-opened offices in Ayala North Exchange, Vertis North and Circuit Makati gained further traction. The hotels and resorts segment on the other hand, saw a 17% surge in revenues to P3.7 billion, due to strong patronage of Seda Ayala Center Cebu, and Lio.
The company looks forward to finishing the year with a full range of projects including new estates in Tarlac and Batangas, the Alviera Country Club in Porac, and the recently launched Ayala North Exchange in Makati City.
The Ayala North Exchange is one of the latest additions to the portfolio of AyalaLand Offices, which is currently the country’s leader in the office real estate sector with over 1.1 million square meters of leasable space in key cities nationwide.
Office properties form a significant part of ALI’s growth strategy as the company recently announced plans to establish a Real Estate Investment Trust (REIT) with prime commercial office assets in Makati.
“We continue to build our nationwide footprint as we gear up to launch estates in Batangas and Tarlac. Our best in class landbank of over 11,000 hectares is strategically positioned in the most progressive areas in the country and will support our long-term growth objectives,” said Dy.