Property developer Alveo Land plans to bring to the property market a record-high P40 billion worth of inventory this 2017, the year when it will reach a turning point in history to become Ayala Land’s biggest brand in terms of earnings contribution.
In a press briefing on Wednesday, Alveo Land president Jennylle Tupaz said sales take-up this year was targeted at P45 billion compared to P38 billion sales (without value added tax) in 2015.In the last four years, Alveo – which caters to the middle- and high-end market, has been the biggest brand in Ayala Land’s residential business group in terms of sales take-up. But this year, the 15-year-old Alveo was projected to be the biggest contributor in terms of net profit, edging out sister brand Ayala Land Premier for the first time.
Tupaz said Alveo’s projected rise as Ayala Land’s biggest brand this year was a function of the big launches in the last four years alongside strong the strong market take-up. “The ramp-up that happened in 2010 in terms of launches, we’re starting to realize (revenues) from them and with more project completions and delivery, we’ll see the impact on the net profit,” Tupaz said.
In its 15-year history, Alveo has launched 84 projects in 12 locations valued at P206 billion, mostly comprising residential and office-for-sale units.
Last year, Alveo sold more residential and office units than it launched. New project launches amounted to P22 billion, slower than the P33 billion launched in 2015. The new inventory launched last year consisted of nine projects – a mix of residential lots, condominiums, and office spaces across Makati, BGC, Pampanga, Laguna, Taguig, Cavite and Davao.
Alveo’s sales take-up last year was steady at P38 billion, the same as the level in the previous year.
This year, the P40 billion new launches planned by Alveo would consist of 16 new projects with over 5,000 residential and office units. About 11 percent of these will consist of office-for-sale units while the rest will comprise residential units.
About 60 percent of Alveo’s launches last year consisted of projects in Metro Manila while 40 percent of new projects were in provincial areas. In 2015, provincial areas accounted for only 30 percent. Moving forward, Tupaz said Alveo would increasingly rely on provincial areas for growth.
In terms of aging of inventory, Alveo has an average inventory life of 11 months, much shorter than the ideal life of 1.5 years. “What it tells you is that if inventory life is low, we’ve been efficient in using our inventory,” Tupaz said.
About half of Alveo’s buyers are end-users while half are investors who intend to lease out the units. Offshore buyers account for 25 to 30 percent of total sales take-up.
“Alveo will continue to strengthen its presence in major growth centers and in Ayala Land estates. We are expanding our footprint across the nation as we venture into new territories, and launch more compelling formats capitalizing on the synergies within the Ayala group,” Tupaz said.
The property firm has also made eight new property acquisitions in Laguna, Alabang, Cagayan de Oro and Makati over the last year. The company will expand its presence in Alabang and Cavite in the South, Bulacan in the North and Cagayan De Oro in Mindanao in 2017.
“The company’s track record proves how its pioneering developments contribute to the growth of the cities where they are located. With its thrust to create meaningful living and working experiences, Alveo develops masterplanned communities that speak to the needs of its residents, while carrying the legacy of Ayala Land,” Tupaz said.
Tupaz attributed Alveo’s success during its 15-year-history to building integrated living and working environments for a discerning market. These quality products consisted of “thoughtfully- designed” condo units, residential lots, and office units in prime locations, she said.