ALI invests P80B to develop former FTI property

Property giant Ayala Land Inc. (ALI) is investing over P80 billion in “Arca South,” the former Food Terminal Inc. (FTI) complex in Taguig, which the company is developing into the country’s next central business district.

ALI, now under new president Bernard Vincent Dy, will also be investing abroad.

Apart from its investments in China, ALI will set aside $10 million to acquire a minority stake in a residential venture in Myanmar. It also wants to be part of another residential venture with a retail property component in Vietnam, Dy said in a briefing after the company’s stockholders meeting Monday.

Asked whether ALI will become a regional property player under his term, Dy said that the company would, for the most part, continue to be a “Philippine play.”

“We’ve made some investments overseas for strategic reasons, one (of which) is to learn in terms of how things are done in those markets,” Dy said. “In particular, for China, we want to leverage on procurement. There’s a lot of opportunities to bulk up and carry down cost of construction in the Philippines.”

Under his watch, Dy vowed to continue the company’s strategy of establishing a presence in new growth centers, introducing “market-leading” large-scale mixed-use integrated estates, and broadening its product base to come up with more affordable products.

In 2013, Ayala Land launched 18,000 residential units, of which 60 percent was from the more affordable brands Bella Vita and Amaia. In terms of value, these affordable brands account for about 20 percent of the business.

To gain more flexibility in tapping the equities market for any need that may arise, ALI has obtained the consent of shareholders to exempt from preemptive rights the issuance of up to one billion common shares.

Dy said ALI would likely have no need to issue new shares this year or the next, but it would like to gain more headroom to prepare for growth.

Over the next five years, P80 billion will be poured into Arca South, said Aniceto Bisnar Jr, ALI vice president for strategic landbank management group.

The project may take about 10 to 15 years to complete, Bisnar said.

Arca South will be a mix of commercial, residential and office buildings on 3.6 million square meters of land. It will include a hospital to be put up through a partnership with the Mercado group under the “QualiMed” brand.

A 200-room Seda hotel will likewise be built in Arca South for an estimated P1 billion, said Jose Emmanuel Jalandoni, ALI vice president and group head for hotels and resorts.

Excluded from the 3.6-million mixed-use space planned by ALI would be lots reserved for investors who already bought tracts of land.

ALI has so far sold close to P9 billion worth of commercial land in the area, which Bisnar said would be a “major central business district in the tradition of Bonifacio Global City and Makati.”

To cover its funding requirements, ALI will raise about P15 billion from the issuance of 11-year bonds this year, of which P8 billion will likely be offered as a first tranche in May. Some P5 billion worth of seven-year bonds will be raised by affiliate Cebu Holdings and another series of “Homestarter” bonds worth about P3 billion will be offered within the year.