Ayala Land firms up plans for Makati's leisure hub

MANILA, Philippines - Property giant Ayala Land Inc. will be spending billions in pesos for the facelift of Ayala Center, which serves as the retail and leisure center of Makati, the Philippines’ premier business district. Besides spending P7.2 billion for Glorietta 1 and 2 redevelopment, Ayala Land will also put up a four-star businessman's hotel, a company executive said. Redevelopment will begin with the demolition and excavation of the current location of Glorietta 1 and 2, Maria Victoria Anonuevo, group head for both Ayala Land Businesscapes and Ayala Malls, said. Proposed plans for the locations include office building development and the construction of 350-room four-star businessman's hotel on top of the mall. “We will be partnering with an internationally-known brand for this hotel. We are still drawing up the plan for it. We will announce the partnership towards the end of the year," Anonuevo said. To be completed in 2016, the hotel will have a construction budget of P2.5 billion, accounting for nearly 30 percent of Ayala Center’s entire redevelopment budget. As a result, the entire Ayala Center will have a total of nine hotels and serviced apartments, including those up for completion such as the Fairmont Hotel, Raffles Hotel and Raffles-branded residential units. Other hotels in the area are the Makati Shangri-La, the Intercontinental Hotel, the Dusit Thani, the Renaissance Hotel, and the Ascott Serviced Apartments. Next: Ayala Land earnings for first quarter may decline Ayala Land earnings for first quarter may decline Although sales remain on track, earnings may decline, company officials said. The first quarter’s bottomline will be lower than last year’s owing to the absence of a one-time gain, Jaime Ysmael, Ayala Land chief finance officer, said. “We will not be able to match the first quarter last year because of the P670-million net capital gain we booked in that quarter. It is difficult to match that," said Ysmael. For his part, Jaime Ayala, outgoing Ayala Land president explained that new office space supplies will have a discount price of between 10 and 15 percent owing to the glut and slowdown in the expansion of the business process outsourcing operators. “We are hit twice because there's too much supply in the market and there's a slowdown in the BPO industry," he said. However, the company remained optimistic that most BPO companies will continue to expand as more firms seek offshoring services to cut costs particularly during crisis. Bernard Vincent Dy, Ayala Land group head for Residential Business, remained optimistic about the company’s prospects, saying that middle-income and affordable markets offer room for growth. “For the residential sector, we felt the global slowdown as early as the second and third quarters of last year because most of our sales come from overseas Filipinos in North America," said Dy. But Ayala added that the retail segment had been “holding up relatively well." In 2008, Ayala Malls merchants reported total sales of P40 billion. On the same year, the company's net income grew 10 percent to P4.8 billion. Capital expenditures for this year, however, will be lower at P17.9 billion from last year’s P18.9 billion. For this year, half of the investment allocation will be for residential development; followed by 17 percent for strategic landbank management; shopping centers, 13 percent; corporate business, 12 percent; and geographic businesses, eight percent. - GMANews.TV