Real estate giant Ayala Land Inc. will continue to focus on the upscale residential market instead of initially planning to shift back to its core middle market, where challenges have unexpectedly persisted.
In a press briefing after the firm’s annual stockholders’ meeting, ALI President and CEO Anna Ma. Margarita Bautista-Dy said “the middle market continues to have some challenges, not just in terms of interest rates being stickier than what we would have wanted, as well as some oversupply in particular segments and particular geographies.”
“Our focus on the premium segment will continue. So specifically, the premium segment and more horizontal developments,” she added.
After leaning on the resilience of the premium market for growth amid higher interest rates and a middle market condominium oversupply situation in recent years, Dy had said last February that they are gearing up for the possibility of a recovery in its core residential market.
She said then that they have prepared plans for the launch of fresh inventories so that they can immediately launch middle market projects as soon as the time is ripe--noting then that interest rates were expected to go down while property developers have taken steps to address the oversupply by scaling down project launches.
In today’s briefing, Dy also pointed out that, the oversupply is only in specific areas in Metro Manila, ALI’s projects are mostly outside of these areas and the firm’s inventory only amounts to about two year’s supply as against the industry inventory of about eight years.
Meanwhile, Dy said that, “The other segment that you will be hearing more about are really our commercial and industrial lots. Now, this product has traditionally been part of our menu of offerings, accounting for maybe 10 percent of our sales.
“So this is an area where we believe there are opportunities, because the buyers are our businesses, you know, or buyers would like to have a commercial property as part of their portfolio of real estate assets.
“So we're actually going to be a little bit more aggressive when it comes to our commercial and industrial lots this year.”
Dy said “what excites me is that there's so much we're doing in terms of reformatting our products, increasing the quality, trying out new product styles.
“There will be new types of offerings that we would want to introduce. We're starting with our MRB (medium rise buildigns) in Avida. We'll be doing more of our MRB projects."
Meanwhile, ALI Chief Finance Officer Augusto D. Bengzon said they have further fine-tuned the company’s fund-raising plans to ₱55 billion this year of which 60 percent will be raised from sustainability-linked instruments.
He said half of these sustainability-linked borrowings will come from multilateral agencies, while the other half will be raised from the capital market.
The balance of 40 percent of the ₱55 billion will be raised from bank borrowings. Of the ₱55 billion to be raised, ₱25 billion will be used to refinance maturing obligations, while ₱30 billion will be used to help fund ALI’s planned ₱95 billion capital expenditures this year.