Encouraged by the strong recovery in property sales this quarter, Ayala Land Inc. is committed to pursue its planned capital expenditures for 2009.

In an interview with reporters, ALI president Antonino Aquino said the company would compensate for its reduced spending in the previous months as uncertainties in the market continue to ease.

Year-to-date, Aquino said ALI spent only less than half of its P17 billion budget for the full year. He said the company is expected to spend more in the second semester.

"Our business plan is premised on the situation of the economy as we see today. The economy is still showing resilience," he said.

Sales up

Surprisingly, the recovery in ALI's sales was significant in the high-end residential market, which is handled by Ayala Land Premier.

Ayala Land Premier suffered a 24 percent year-on-year decline in bookings in the first quarter, dragging its parent's bottomline. However, beginning March, the company had seen its monthly sales breach the P1-billion mark.

"The money was always there since nothing affected the finances of our buyers. The weakness earlier seen was due to investor sentiment and increased cautiousness because of what was happening overseas," said Ayala Land Premier marketing and sales head Tom Mirasol.

Noting that the worst has passed and buyers have returned to the market, Mirasol said "people began to realize that we were not as exposed to or affected by the global crisis."

Mirasol said March saw a 52-percent spike in Ayala Land Premier's new reservations and these rose by another 7 percent in April. In May, new reservations were up by 76 percent.

He added that June is expected to do just as well, translating to 4 straight months of steady growth.

"Confidence has returned to the market. A realization that the valuations in the local property market are based on fundamentals, not speculation. Consequently, current prices reflect the true worth of property assets—which are good stores of long-term value," Mirasol said.

Bernard Dy, senior vice president and group head of Ayala Land Premier, attributed the upscale property developer's strong monthly results to the domestic market, which accounts for up to 80 percent of sales. He said only 10 to 15 percent is contributed by overseas buyers.

Outlook

Aquino said ALI's outlook for the rest of the year remains upbeat, with the upward trend in reservations and sales likely to continue.

"We expect to see significant growth in the second quarter and the second half of the year. New projects continue to be planned for 2010 and the next 5 years," he said.

In the first three months, ALI posted a net income of P907 million, 50 percent lower than the P1.83 billion recorded in the same period a year ago. This was due to the absence of one-time gains as well as lower revenues.

ALI's revenues for the period dropped 10 percent to P7.41 billion from P8.23 billion.