MANILA, Philippines?Property giant Ayala Land Inc. plans to build more business process outsourcing (BPO) hubs this year, boosting prospects for recurring office rental earnings that complement its shopping mall and residential businesses.
?Because of the recovery that we?re seeing, we have revived our plans for BPO expansion and we?re going to be launching this year another 120,000-130,000 square meters of new BPO space mostly in provincial locations,? ALI investor relations officer Alfie Reyes said in a briefing on Friday.
So far this year, ALI has launched BPO hubs in Iloilo and Baguio, offering 18,000 sq.m. in combined additional BPO space. With the recent pick-up in demand from BPO firms, however, the office property segment has been revitalized.
In the pipeline this year are new hubs in five more provincial locations and a couple more in Metro Manila, Reyes said.
In the first three months of this year, ALI?s office business segment posted a 3-percent rise in revenue to P466 million, with the expansion of the BPO office portfolio to a total of 258,001 sq.m. in gross leasable space as of end-March.
First-quarter office revenue was also boosted by higher average BPO lease rates, which rose by 11 percent to an average of P584 per square meter a month and improved occupancy levels of 66 percent against 50 percent a year ago.
The strategy on BPO is in line with the Ayala group?s expansion in all other property segments, particularly the residential business.
For this year, 15 to 20 new residential property projects are expected to be launched, Reyes said.
Because of the strong demand for residential property, ALI expects to be able to raise its selling prices this year by an average of 10-15 percent.
Reyes said ALI was upbeat on business prospects for this year. ?Based on what we see, this year should be better than last year,? he said.
ALI posted a 32-percent profit growth in the first quarter to P1.2 billion from year-ago level.
Consolidated revenue for the first quarter reached P9.22 billion, up by 24 percent over a year ago. This was due to higher real estate revenue.
