ALI’s China project 50% complete


Three years after breaking into mainland China’s residential property market, Ayala Land Inc. reported it was halfway through its first project—a 19-tower residential complex project in Tianjin Eco-City.

The project is moving slower than targeted given the slowdown in the Chinese economy but residential sales are proceeding well, without the need to cut prices, said ALI chief finance officer Jaime Ysmael.

The residential complex is being built by ALI in partnership with Keppel Land and the government of Tianjin Eco-City. The Ayala property arm has a 40-percent interest in the project, Ysmael told reporters at the sidelines of an ING-Financial Executives Institute of the Philippines (Finex) CFO forum.

Ysmael said the Chinese property market was undergoing difficult times and even bigger property players from Japan, Taiwan and Malaysia were also facing rough sailing.

“As you know, the China market has been problematic but we’re fortunate that we priced it at mid-range, so we didn’t have to cut down prices,” Ysmael said.

To date, he said 50 percent of the towers committed by joint venture Sino-Singapore Tianjin Eco-City Investment and Development Co., Ltd. (SSTEC) had been built.

Under the agreement, the venture must develop more than 1,100 residential units it the complex located at the gateway of the Eco-City’s “Start-Up” area. The first phase of the project, covering 11 towers, started construction at the end of 2010 and was originally expected to be completed within 20 months.

Asked about sales take-up in China, Ysmael said sales volume had yet to reach 50 percent.

In China, developers are allowed to sell residential units only after a certain stage of completion.

Ysmael said ALI had so far spent $16 million to $17 million for the China project. “These are not very high-rise projects,” he said.

Asked whether ALI would pursue more projects in the mainland, Ysmael said: “The initial idea was for us to graduate and be given a potential site in commercial center, but this may take awhile,” he said.

Tianjin Eco-City, which is 40 kilometers from the Tianjin city center and 150 kilometers from Beijing, is a 3,000-hectare collaboration between the Chinese and Singaporean governments. It was designed to showcase the future direction of urban planning and sustainable development.

In the meantime, ALI expects to post “good” financial results in the second quarter of the year in line with the momentum seen in the first three months.

In the first quarter, ALI grew its net profit by 30 percent year-on-year to P2.76 billion as all business lines contributed higher earnings. Sales take-up value for the first three months reached P19.2 billion, equivalent to an average monthly sales take-up of P6.4 billion, comparable to the record P6.5 billion average monthly sales take-up achieved for the whole of 2012.

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  • delpillar

    Northern Half of China will have 5 to 7 years less life expectancy than the southern half because of polution.

    According to expert, even if China make drastic solution within two years, the same polution (PM2.5) level will linger for another 15-to-20 years.

  • Mark

    China’s economy is on a downhill. Ayala can say goodbye to their $17 million investment. A lot of companies are moving their production plants elsewhere.

    Casper Li, the Chinese Ghost is said to be the famous tenant in Tianjin Eco-City.

  • jpastor

    “In China, developers are allowed to sell residential units only after a certain stage of completion.”

    – In the Philippines they pre-sell all units prior to even dig the first hole of one column of the building.

  • ConcernedCitizenPh

    ALI got itself in trouble here.

  • wvillaro822

    This must be one of those stupid project that a PH investor put in China. Anything wrong happen between PH vs. China, the Chinese will destroy it.

  • generalproblem

    andami nang luagr sa china na ghost town kais wala naman nabili. ang susunod na balita sigurado. ALI nalugi sa china.

  • Marcos5

    Ysmael said the Chinese property market was undergoing difficult times:

    Air quality in China and environmental concern is driving expats out of China. Property market is a bubble. The truth is they are running out of fresh clean water with a billion more population climate change will cause chaos from short food supply and unstable regional policies. from the hardcore Politburo members of chairman Mao tse dung.

    Not a good place to put your egg, very unstable.

  • Sun Tzu

    Big deal

    • UrHONOR

      NO wonder they always laugh… hi hi hi!

    • dipaloloko

      Project is 19-tower complex, not 19-storey building. You lack brains to understand why we all laugh at you now.

      • Chrisnadal19

        agree. the size of their eyes equates to brain size.

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