MANILA, Philippines - Property giant Ayala Land Inc. (ALI) is focusing more on developing its recurring income business through an aggressive rollout of new hospitals and clinics, department stores and supermarkets, office space and shopping centers.
The residential development side is expected to continue its robust growth, with the property firm planning to strengthen its foothold north of Metro Manila through new mixed-use communities, its top official said.
“Over and above the growth we are having in the residential development side, we’re going to be having a lot more on the recurring part of the business,” said ALI president and CEO Antonino T. Aquino.
“We will keep on increasing investments on that recurring part of the business to give us far greater flexibility,” Aquino said.
The launch of more shopping centers, office space, hospitals, convenience stores, department stores and supermarkets is in line with ALI’s plan to achieve a balanced growth. So far, around 30 percent of the company’s revenues came from the recurring income portfolio.
“That means we’re going to be overweighting and increasing the magnitude of investments in the (recurring segment),” Aquino said.
The listed property development arm of the Ayala conglomerate is jacking up its capital spending to P70 billion this year as it commits to launch 78 projects worth P142 billion to ensure continuous growth in the coming years.
Aquio said the company plans to launch four to six new retail establishments every year, particularly in its integrated mixed-use developments.
The aggressive rollout will allow ALI to maintain growth trajectory of the recurring income portfolio in the next three to five years, Aquino said, adding that the segment has posted around 20 percent improvement annually.
But the residential business will not be left behind in terms of expansion.