MANILA, Philippines - Bent on keeping the Makati central business district at the forefront of masterplanned developments in the country, property giant Ayala Land Inc. (ALI) is injecting P20 billion over the next three to five years for a major facelift of the 40-year-old Ayala Center.
The redevelopment of the five-hectare Ayala Center, the flagship mixed-use urban city complex of the Ayala Group, is being hailed as a long-sought catalyst for the rebirth of Makati, the country’s financial capital.
The move also signifies ALI’s bullish stance on the real estate industry, which has seen remarkable growth since the second half of last year.
Following a cautious tack in 2009, ALI is aggressively stepping up its construction and investment activities with plans to sell a total of 9,200 residential units this year or nearly four times the number of units sold the previous year, said company chairman Fernando Zobel de Ayala in a press briefing Tuesday night.
Zobel said ALI’s bullishness stems from the return of investor confidence, stable remittances from overseas Filipino workers, low interest rates and improving global market conditions.
“The first half of last year basically had everyone moving very cautiously as we saw the crises in the US and Europe unfold. But we saw a very dramatic turn when we got to June of last year. With a renewed confidence and a feeling that people wanted to go back to the market once again after they have seen the US crisis play out, we saw the market pick up quite significantly starting in July last year. The market went on to gain quite a bit of strength towards the end of last year and we’re seeing a strong start up to this year,” Zobel said.
“The conditions continue to strengthen for a very robust real estate cycle, interest rates continue to be low, remittances continue to grow although the growth has been less than the past years and banks are in a very healthy condition,” he added.
For its first salvo this year, ALI is accelerating the makeover of Ayala Center with the construction of an upscale residential enclave, (Park Terraces), two office buildings, a shopping mall and a businessman’s hotel.
Less than half of the programmed P20-billion capital budget will go to Park Terraces, with the rest going to the continued refurbishment of the retail shops and the establishment of office buildings. The project would be financed largely by internal cash and some borrowings the company has previously arranged.
ALI president Antonino Aquino said this would be the most ambitious redevelopment of the Ayala Center, which has undergone three makeovers since the 1960’s.
Aquino said the three-tower Park Terraces, will make available a total of 370 units, priced at between P5 million and P40 million. Unit sizes range from 37 square meters to 270 square meters.
By Zinnia B. Dela Peña