Real estate giant Ayala Land Inc. reported a 22 percent decline in first-quarter net income as slump in residential sales offset the steady expansion of its malls and hotels.

In a disclosure to the Philippine Stock Exchange on Thursday, April 30, the firm said its net income fell to ₱5.4 billion in January to March from ₱6.9 billion a year earlier.

At end-March, ALI’s revenue dropped 14 percent to ₱37.5 billion as the company’s core property development business faced headwinds.

ALI’s property development revenue, a primary driver for the local builder, tumbled 27 percent to ₱20.3 billion. Sales reservations, a key indicator of future revenue, also fell 22 percent to ₱28.2 billion, averaging roughly ₱9.4 billion per month during the period.

Despite the quarterly decline, Ayala Land noted that demand for its premium segments and estate lots remains resilient. Residential sales reached ₱24.4 billion, a figure the company said matched its performance in the preceding quarter and surpassed the ₱22 billion recorded in the first quarter of 2025.

For the remainder of the year, ALI said the developer plans to focus on clearing existing inventory, with a target to deliver 13,000 residential units across 40 projects.

However, the company’s recurring income segments provided a partial cushion against the residential slowdown. Combined revenue from leasing and hospitality rose nine percent to ₱12.6 billion, driven by higher tenant sales and increased occupancy across its commercial portfolio.

Shopping center revenue edged up to ₱5.8 billion from ₱5.7 billion a year ago. Performance was bolstered by the redevelopment of flagship assets like TriNoma in Quezon City and Ayala Center Cebu, as well as the addition of 17,500 square meters of new space at the recently opened Ayala Malls Arca South.

On the other hand, ALI’s hospitality division emerged as a bright spot, with revenue surging 30 percent to ₱3.4 billion, supported by new capacity from the New World Makati Hotel and stronger performance from renovated properties, including the Seda hotel chain and El Nido’s Lagen Resort.

Likewise, office leasing remained stable at ₱3 billion, while the company’s industrial real estate arm saw revenue grow 23 percent to ₱439 million on the back of rising demand for cold storage and dry warehousing.

“Our leasing platform is delivering steady growth and providing greater stability to the business,” Anna Ma. Margarita Bautista-Dy, ALI president and chief Executive officer, said.

She added that the company is “actively reshaping” its portfolio to ensure a more balanced mix of income streams.

ALI is currently executing a long-term strategy to expand its recurring income base. The company intends to bring more than 270,000 square meters of new mall and office space online this year, alongside the anticipated reopening of the five-star Mandarin Oriental in Makati.

Dy noted that the current economic environment requires a “deliberate approach” to capital deployment as the firm seeks to navigate market cycles.