Real estate giant Ayala Land Inc. is now ready to open new malls and pursue the construction of new ones as it becomes more optimistic that consumers are going out again as the economy reopens.
ALI Chairman Fernando Zobel de Ayala during the firm’s annual stockholders’ meeting noted that declining Covid cases, the ongoing vaccination booster rollout and improving indicators support recovery prospects.
“Mortgage rates have remained affordable, supported by flexible payment terms. Local consumption continues to be strong comprising close to 70 percent of the GDP,” he added.
“Also Overseas Filipino remittances and BPO revenues continue to be important than versus the economy. All these prospects provide us with optimism for the future,” Zobel said.
ALI President Bernard Vincent Dy said “I believe that all our major businesses will remain relevant post pandemic. Some will even benefit from the changes in consumer preferences.”
“While a few businesses will require a higher level of reinvention with changes that we need to implement quickly. New opportunities have also been crystallized, which we will pursue aggressively,” he added.
Dy said that, “With reduced Covid cases, high vaccination rates, and improved mobility, I am optimistic that our country is on course for resurgence and we are positioned to accelerate our V-shaped recovery.”
“Local consumption remains strong in our nation's favorable demographics, a growing middle class, and a young working class will support growth over the medium to long term,” he noted.
Given the improving situation, Dy said ALI is now planning to open new commercial facilities with the first being the retail space at the Ayala Triangle Gardens as well as the 11,000 square meters in the phase one of Vermosa mall in Cavite.
“We have close to about 300,000 square meters of mall space under construction and we expect to open these facilities from now until 2026,” he said.
Dy said that, as of April, foot traffic in all of ALI’s malls have risen by an average of 70 percent while merchant same store sales are up 80 percent.
“So we believe that the malls business is on its way to recovery and barring any more lockdowns or surges or strict, strict mobility restrictions, we believe and we hope that the business will continue to move and hopefully reach near pre pandemic levels by the person by by Christmas season,” he said.
Meanwhile, ALI is seeing strong demand for its hotel rooms, primarily from domestic business travel, as well as domestic leisure travel.
In March, Ayala Land recorded around 45 percent occupancy in all its hotel rooms since the alert level one category for people’s restriction was imposed.
“In April, we're seeing that continuing trend of increasing occupancy. We're also seeing an increase in the room rates that we're able to charge for hotels and resorts,” said Dy.
He added that, “Moving forward again, we're very hopeful that that trend will will continue again barring any kind of lockdowns or mobility restrictions for travel restrictions. And we're hopeful that the business will put up particularly as foreign business travel and foreign leisure travel, come back in more meaningful way in our country.”
In the office segment of its business, ALI has not seen “any kind of meaningful contraction or departure” from any of its four major tenants for business process outsourcing (BPO) firms and traditional corporates locators.
Dy said Ayala Land continues to see BPO expansions in its sites, as well as traditional space occupiers moving to newer buildings like Ayala Triangle Tower two as well as One Ayala.
“So moving forward for the year, we expected that vacancy rates will be meaningfully reduced, and therefore, our revenues for the office segment should increase in 2022 as compared to 2021,” he said.