Ayala Land H1 profit jumps 34% to P8.1B

Real estate giant Ayala Land Inc. (ALI) saw its profits in the first half of 2022 jump 34% to 8.1 billion pesos, propelled by the recovery of shopping centers and hotels in addition to an increase in demand for commercial land.

Residential sales during the period remained a drag, however, as the builder provided payment leeway to struggling buyers during the pandemic.

Total revenue for the first half reached 53.5 billion pesos, up 9%.

Ayala Land said the sale of commercial lots soared 166% to 5.3 billion pesos amid strong uptake at its Arca South, Nuvali and Vermosa projects.

This offset the 28% drop in office units for sale and the 9% drop in residential income to 27.4 billion pesos. Ayala said the drop in residential sales was due to “stretched payment terms resulting from the challenges of the pandemic”.

Sales of residential reservations, an indicator of future revenue, added 2% to 49.3 billion pesos.

“A strong recovery in shopping centers and hotels, resilient office leasing operations and strong demand for commercial land drove our performance in the first half of 2022,” said Ayala Land President and CEO Bernard Vincent Dy, in a press release.

“Increased economic activity allowed our various business segments to drive quarter-over-quarter improvements and support the growth of our diversified real estate portfolio,” he added.

The builder’s commercial leasing business saw a 54% recovery due to the easing of pandemic movement restrictions.

Ayala Land mall revenue doubled to 6.9 billion pesos as rents and tenant sales increased, while office rentals rose 12% to 5.4 billion pesos, mainly thanks to the contribution of the newly opened projects.

Hotels and resorts also outperformed with a 91% increase in sales to 2.3 billion pesos” thanks to the increase in customers and higher room rates due to the resurgence of domestic tourism. “.

“We look forward to sustaining our recovery for the rest of the year, anchored on the country’s stable fundamentals and the new socio-economic program,” Dy said.

In the second quarter alone, Ayala Land said net income reached 4.9 billion pesos, up 51%, while revenue rose 18% to 28.7 billion pesos.

The developer said it rolled out 30.2 billion pesos of capital expenditure for the first half, more than half of it for residential projects.

During the period, it launched 12 projects worth 34.9 billion pesos, five of which were rolled out in the second quarter of 2022.

Capital expenditure reached 30.2 billion pesos, of which 54% was spent on residential projects, 10% on commercial projects, 15% on land acquisition, 15% on property development and 6% for other purposes.

Ayala Land launched 12 projects worth 34.9 billion pesos in the first half, with five projects worth 17.9 billion pesos offered to the market in the second quarter. For the rest of the year, it plans to launch two planned estates in the country which will be located “in strategic growth areas”.

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