MANILA, Philippines – Property giant Ayala Land is allocating the bulk of capital expenditures for its premium residential offerings, at least for now, as the affluent market continues to show signs of robustness.
Ayala Land is allocating P100 billion for its residential property development for 2024, of which 80% would be used for its premium properties like Alveo Land and Ayala Land Premium. The remaining 20% would be for its “core” properties like Avida and Amaia.
The trend of allocating more for the premium segment started during the pandemic. Prior to COVID-19, Dy said capex for this market was closer to 64%.
In a press briefing on Tuesday, February 20, Ayala Land president and CEO Meean Dy said they are improving the quality of their offerings, which will mostly be in the southern areas outside Metro Manila, to ensure that they lead in the premium segment.
Dy noted that those who can afford their premium properties are not very sensitive to increases in interest rates.
Dy said that even other developers who were initially catering to the middle income market have been aspiring to play in the premium segment.
“Over the medium term, with a country like the Philippines, we need the core to come back, which is why now we continue to nurture our Avida brand,” Dy said.
“We have the land bank for the projects, we continue to plan and we intend to have projects on push-button mode so that if there should be opportunities, we would be very quick in being able to capture market changes,” she added.
Dy said if Ayala Land is able to tighten its pay terms, that is a clear signal that the market is getting stronger.
But for now, the company is bracing for interest rates to remain “higher for longer.”
Ayala Land ended 2023 with its net income rising by 32% to P24.5 billion and revenues up by 18% to P148.9 billion.
The bulk of its revenues came from property developments, which delivered P81.2 billion, a 14% increase. Average monthly sales stood at P9.5 billion.
Capex stood at P86.2 billion, 49% of which was spent for residential projects.
– Rappler.com
