Ayala Land eyes overseas investments

SINGAPORE (Reuters) - Ayala Land (ALI.PS), the Philippines' largest developer, said on Monday it may revive a long-held ambition to grow its overseas business and will invest directly in foreign projects if the opportunity arises.

Chief Financial Officer Jaime Ysmael also said there were early signs of an improvement in the domestic residential market, though this would not be reflected in 2009 earnings due to the way the firm accounts for property sales.

"Now is the time to revisit our overseas initiatives to rebalance our portfolio," Ysmael said at the Reuters Global Real Estate Summit in Singapore, although he added the Philippines will remain the firm's main focus in the foreseeable future.

Ysmael, who is also president of the Asian Public Real Estate Association (APREA), a pan-Asian lobby group representing developers and property investors, said Asia's real estate market as a whole was in a better shape than other regions.

"The general mood has been cautious, but there is also optimism. Asian companies in general are in much better shape compared to their peers in other regions," he said.

Ayala Land, which has long sought to spread beyond its home market, has a stake in a $330 million Asian real estate fund that has invested in Thailand and India but it does not directly own any foreign properties.

Ayala Land has assigned several key personnel to the fund, whose shareholders include parent Ayala Corp (AC.PS), and the developer will second other staff should the fund require help from building professionals such as architects. The fund is about one-third invested, he said.

Within the Philippines, Ayala is embarking on projects in the northern and eastern parts of Metro Manila as well as other parts of the country to balance its exposure to the southern part of the capital.

It also plans to build homes for middle and lower-middle income Filippinos to reduce its dependence on the upper end of the residential market, Ysmael said.

"The housing backlog in the Philippines remains significant," he said.

Property values in the Philippines have not risen as much as in other countries, and prices, in dollar terms, are lower than before the 1997 Asian crisis, he added.

Ayala Land is the real estate arm of Ayala Corp, a Philippine conglomerate whose businesses include banking, insurance, autos, telecoms, information technology and water.

The real estate firm's flagship properties include the Makati Stock Exchange Building and the Glorietta and Greenbelt malls in central Manila.

Ayala Land last month posted a 50 percent drop in January-March net profit to 907 million pesos ($18.75 million) due to weaker home sales.

Ayala Land, like many developers, recognises revenues progressively as projects are being built, which meant a second-half recovery in home sales will not be reflected immediately in revenues.

"We expect 2009 to be a difficult year even if times are improving," Ysmael said.

(For summit blog: blogs.reuters.com/summits/)

(Editing by Ian Geoghegan)