Ayala Land Seeks Hotels, Airports After Record 2011
January 15, 2012, 11:54 PM ESTBy Cecilia Yap
(Corrects spelling of hotel brand in second paragraph of story published on Jan. 13.)
Jan. 13 (Bloomberg) -- Ayala Land Inc., the biggest Philippine developer, plans to build more hotels and resorts, and bid for airport management contracts to broaden its revenue beyond residential and office projects.
The company, which developed the Makati City business center known as Manila’s Wall Street, said it is building its own hotel brand, called Kukun, starting with four properties. It also wants to manage and rebuild older airports, said Antonino Aquino, Ayala Land’s president.
“We’re generally interested in the airport business,” he said in an interview at his Makati City headquarters, adding that “tourism will be a government priority, so we’d like to be on that side. You will see us having a heavier foray into that business.”
Ayala Land is setting its sights on tourism-linked projects as the Philippine government offers as many as 16 infrastructure projects worth as much as 142 billion pesos ($3.2 billion) to boost growth with the aim of attracting 10 million visitors a year starting 2016.
The company plans to rebuild a resort under its El Nido Resorts brand that burnt down, and is looking for “further additions” through new developments or acquisitions, he said. It also plans to build more resorts in the central Philippine island of Visayas, he said.
Among the airports, Ayala plans to bid for projects in Cebu and Cagayan de Oro City, he said.
‘Level of Aggressiveness’
Net income and sales at Ayala Land climbed to a record in 2011, fueled by residential sales and rents from its malls and office buildings, he said.
The company is “well on the way” for annual profit of 10 billion pesos by 2014, Aquino said. Profit in the first nine months of 2011 increased 33 percent to 5.23 billion pesos, with half of the revenue from residential sales.
“We would like to continue with that level of aggressiveness,” Aquino said in the interview yesterday.
Ayala Land shares climbed 13 percent since the start of the year, twice the advance in the Philippine benchmark index.
The company may raise 10 billion pesos by selling notes to help fund record spending this year, Aquino said. It raised a similar amount from a notes sale in January 2011, offering debt with maturity of as long as 15 years, the longest issued by any Philippine company. Capital spending this year will be higher than the 30 billion pesos budgeted last year, he said.
The developer is still expanding its residential projects because there’s a shortage of 4 million homes in the nation, providing demand for the company, Aquino said. The backlog is “so large” and “it’s not something that will go away in a decade,” he said.
--With assistance from Clarissa Batino. Editors: Linus Chua, Andreea Papuc
To contact the reporter on this story: Cecilia Yap in Manila at cyap19@bloomberg.net
To contact the editor responsible for this story: Rebecca Evans at revans6@bloomberg.net;
