MANILA, Philippines – Ayala Land Incorporated’s (ALI) move to bank on its premium residential offerings appears to be paying off.

In a stock exchange filing on Wednesday, August 8, the property giant reported a 15% year-on-year net income growth to P13.1 billion in the first six months of 2024. Consolidated revenues also increased by 28% to P84. 3 billion, with its residential segment earned revenues that totaled P43.7 billion.

ALI president and chief executive officer Anna Ma. Margarita Bautista-Dy said its residential segment “outperformed expectations.”

“Our gross take up grew 20% for the premium [brands] and 9% for the core [brands] so clearly there’s still a bias for premium. I think for the core we will continue to I guess focus our sales force and make sure that we are able to move our current inventory and in fact start launching some projects in our core segment,” Dy said in a briefing on Wednesday, August 7.

“But clearly, you see the strength more in the premium than in the core as our numbers show,” she added.

Dy said in a February briefing that they are allocating P100 billion to develop their residential property segment this year, 80% of which would be dedicated to developing their premium brands such as Alveo Land and Ayala Land Premier (ALP), and 20% will be for core brands Avida and Amaia.

ALI launched P33.7 billion worth of residential projects in the first half of 2024, of which 92% are premium brands and 52% are horizontal developments. These include ALP’s Miravera Phase 2 in Bulacan, Anvaya Seabridge Residences Building A in Bataan, Alveo’s Orean Place Tower 3 in Vertis North, South Palmgrove Phase 2 in Batangas, and Amaia’s Scapes Iloilo Sector 2B.

The company expects its core brands to gain more traction once interest rates go down. For the rest of the year, however, 70% of its launches will be dedicated to its upscale market.

First-time buyers, younger consumers

While “loyal” customers or those who have been buying properties from ALI’s premium brands for decades have been contributing to the company’s revenues, executives note that their market is also getting younger.

“Kasi (because) the Filipino is continuously becoming more affluent,” Dy said. “When we take a look at the buyers, we actually have a fair amount of first-time buyers in our premium segment, which tells us that our buyer pool is expanding.”

For instance, the company shared that the gross monthly income of its ALP buyers stood around P500,000 for either single- or dual-income households. The majority or 60% of its customer base are male and 68% are married. In terms of age, 30% of their buyers are 27 to 42 years old, and 37% are 43 to 58 years old.

Those seeking Alveo properties are usually male (55%) and 60% are married.

ALI chief finance officer Augusto Bengzon said most of them are entrepreneurs, business owners, and are part of their company’s top management.

“Actually worth noting here…a lot of our buyers are actually business owners and I think that’s a testament to the strength of SMEs in the country, which continues to grow,” Dy said.

‘Hitting growth targets’

Ayala Land said it is “hitting its growth targets across all business lines and market segments” in the first six months of 2024.

Its leasing and hospitality revenues went up by 10% to P22.1 billion, which the company attributes to higher occupancy at Ayala Malls Manila Bay, its transport hub One Ayala Mall and Offices, Ayala Triangle Tower 2, Seda Manila Bay, and in Seda Nuvali and Lio.

The company earned P6.1 billion in office leasing in the first half. In relation to the national government’s directive to ban Philippine offshore gaming operators (POGOs), which had once been the driver of office leasing in the country, the property giant implied that the policy will barely affect them.

“Only 1% of our portfolio is occupied by POGOs. We were never a big POGO locator so I suppose it has even gone down over the years,” Dy said.

“In terms of our sales, we have very little sales to Chinese buyers in general. The current effect might be who rents or who stays in buildings when renting out…less than 5% of our units are occupied by POGO or probable POGO employees.”

Meanwhile, shopping center revenues went up by 8% to P11.1 billion in the same period and hotel and resort revenues jumped 19% to P5 billion.

ALI’s service business revenues also surged 51% to P8.4 billion in the first half of the year. – Rappler.com