Ayala Land commercial sales jump 348% from FTI sales

MANILA, Philippines – Property giant Ayala Land Inc. (ALI) recorded a 348% increase revenues from the sale of commercial and industrial lots in the first quarter of 2013, driven mostly by its activities in the Food Terminal Inc (FTI) complex, which it won in a government auction.

First quarter revenues from Ayala Land’s commercial and industrial arm reached P4.1 billion as the developer began selling parcels of land from its newly acquired FTI property in Taguig City, now called Arca South. (Ayala Land total revenues grew 38% to P18.53 billion in the first quarter.)

“What we did immediately after we won the bid was really to identify a large enough parcel that would allow us to monetize part of what we paid but of course to the extent that we can capture the value appreciation we will do so,” Ayala Land CFO Jaime Ysmael said in a press briefing on Tuesday, May 8. 

“The value capture objective will necessitate postponing or deferring some of the additional commercial lots. It will be programmed over time. We are already quite comfortable with what we’ve been able to sell so far,” he added.

Ysmael said 50 hectares out of the total 74 hectare land will be kept for Ayala Land’s use. The rest will be sold externally.

The FTI is the single biggest landbank Ayala Land has acquired since taking over the Bonifacio Global City project in Taguig City in 2003.

In a public bidding in 2012, Ayala Land won FTI  with its bid of P23.9 billion, a net present valuation that was higher than two other rivals’ bid. Including value added tax, total cost is estimated at P27 billion. Ayala Land estimates that its acquisition price per square meter was a little over P32,000.

In February, Ayala Land started to unlock values from the FTI property selling a number of commercial lots to begin development. It launched 17 commercial lots in varying sizes — between 2,500 and 3,000 square meters — based on a headline price of P150,000 to P155,000.

“Instead of borrowing from the banks to set up infrastructure for the 74-hectare proper in Paranaque city bought from the state-owned Food Terminal Inc, Ayala Land will sell a portion of that prime property,” Ayala Land in a statement released to the Security and Exchanges Commission on February 18.

Plans for FTI

According to Ysmael, there are a few more lots that will be sold in early 2014.

Ysmael aims to offer complete flexibility with the lots sold. “The way they are being sold for use really allows for flexibility in terms of the types of use. It can be office, residential and retail or even hotel. We made it a point to make it as flexible as possible,” he said.

Ysmael said they are looking for long-term renters. “We made sure that the names and to whom we are selling to are the ones we can execute and build on the properties. We don’t intent these properties to be idol forever. We also want the catalyst for the entire development.”

So far, Ayala Land has sold parts to businesses across different sectors. “We are trying to achieve a mix of all locals in different types of businesses which will complement the entire development,” said Ysmael.

Transportation hub

The FTI property will also have a Integrated Transport System project which will be implemented by the Department of Transportation.

The system will be adjacent to the property and will be connected to the current Philippine National Railways station in the area. Plans are being made for a possible Bus Rapid Transit (BRT) that would run from Pasay City to Makati City, Bonifacio Global City, FTI and the Ninoy Aquino International Airport (NAIA). 

ALI said it aims to transform FTI into another business district and bring all its product lines — commercial, residential — into the development.

The FTI property in Taguig is among Ayala Land’s ongoing multi-billion-peso development projects, including The Circuit in Makati, Bonifacio Global City (BGC), Vertis North in Quezon City, and Cebu Park District. – Rappler.com