ALI to raise P50 B in debt capital

Property giant Ayala Land Inc. (ALI) is raising up to P50 billion in debt capital this year to refinance maturing obligations and partially fund general corporate requirements.

ALI said the amount would be raised through the issuance of retail bonds and corporate notes for listing on the Philippine Dealing and Exchange Corp., as well as execution of bilateral term loans.

“We intend to access both our bank lines as well as the debt capital markets, roughly 50-50. Of the total of P50 billion, P25 billion will be to finance our capital expenditures this year and the other P25 billion is for refinancing of maturing debt,” ALI chief finance officer Augusto Bengzon said.

“The strategy is to access our long– term bank lines as well as the debt capital markets in the second half of the year as we anticipate that by that time, rates should start trending downwards. So we have that flexibility to trigger a major part of our financing program in the second half of the year when hopefully, rates would have moderated. We want to borrow long–term fixed rate. It is important for us to try to get the financing at the opportune time,” he said.

ALI finished 2023 on a high note with earnings rising by nearly a third due to robust property demand and heightened consumer activity.

Net income last year stood at P24.5 billion, up 24.5 percent year-on-year, while revenues increased by 18 percent to P148.9 billion from 2022.

Steady bookings and higher completion of residential projects and offices for sale buoyed property development revenues by 14 percent to P92.3 billion.

ALI launched 25 new projects valued at P75.9 billion in 2023.

Leasing and hospitality revenues of the company likewise expanded by 25 percent year-on-year to P41.7 billion on the back of improved occupancy and rents.

Shopping center revenues saw a 31 percent jump to P21.1 billion, while office leasing inched up by six percent to P11.8 billion.

Higher travel and tourism demand boosted occupancy and room rates, resulting in a 42 percent jump in hotel and resort revenues to P8.8 billion.

ALI president and CEO Anna Ma. Margarita Bautista-Dy said the company is optimistic about opportunities for this year, but pragmatic in addressing potential challenges of a higher-for-longer interest rate regime.

“Ayala Land was well-positioned to take advantage of opportunities from an improving market in 2023, enabling us to meet our objectives for the year,” Bautista-Dy said.

“With our focus on quality, we look forward to bringing more high-value development products to market and embarking on the reinvention of our malls, hotels, and resorts for our customers to enjoy,” she said.

Meanwhile, AREIT Inc., the listed real estate investment trust of the Ayala Group, reported a 43 percent jump in net income to P4.93 billion in 2023 due to robust revenues.

Revenues surged by 41 percent to P7.14 billion as the group’s properties posted a 97 percent average occupancy, higher than the industry.

“Our growth initiatives will benefit AREIT--profoundly enlarging the portfolio further, diversifying the assets, reducing concentration risk, and most importantly, providing our shareholders dividend accretion. This is a testament that AREIT, led by its sponsor Ayala Land, is an integral vehicle for capital recycling and growth, and we remain steadfast in attaining our vision of being the leading and most diversified Philippine REIT,” AREIT president and CEO Carol Mills said.