Top Philippine homebuilder Ayala Land pauses luxury tower on war fallout
The builder is cutting its launches of premium and core residential projects by half
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[MANILA] Top Philippine builder Ayala Land said it is pausing the development and sale of a high-end residential tower in the nation’s central business district due to the impact of the Middle East conflict.
The pause on the Laurean Residences project reflects the company’s “forward-looking approach grounded in long-term value creation and disciplined capital management,” Ayala Land said in a statement on Monday (Apr 20). Shares of the company closed 1.4 per cent lower on Monday, bucking the Philippine benchmark stock index’s gains.
The project offered 65 floors of residences ranging from 72-square metre suites to 402-sqm four-bedroom homes, with prices starting at 650,000 pesos (S$13,818) per square metre, Philippine Daily Inquirer reported in September. Back then, Laurean had generated close to eight billion pesos in sales ahead of its launch, according to Ayala Land.
Ayala Land’s decision shows how companies are grappling with the economic fallout from the Iran war, which has caused global crude costs to soar and price pressures to spread across sectors like logistics and transport. The war may also hurt job prospects for Filipino migrants and dent remittances.
“We continue to take a more deliberate approach to capital allocation-prioritising developments where we have clearer visibility on execution, while strengthening our broader portfolio, particularly our recurring income base,” Ayala Land said. It is reaching out to buyers directly to discuss options.
Tensions in the war ratcheted up over the weekend as the US Navy fired upon and boarded an Iranian-flagged cargo ship in the Gulf of Oman, the first seizure in the US blockade of the Strait of Hormuz.
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Ayala Land, in February, said sales of luxury and premium condominiums have been tepid amid a slower economy that has been partly due to a corruption scandal in the government’s infrastructure projects.
For this year, the builder is cutting its launches of premium and core residential projects by half to 30 billion pesos as an oversupply of condominiums drag on home sales. Unlike previous years, it is banking on recurring businesses including malls and offices to drive growth. BLOOMBERG
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