Leasing business seen to drive Ayala Land growth in 2026

Ayala Land's leasing business currently accounts for about 45 percent of the company's earnings before interest, taxes, depreciation, and amortization.

Ayala Land Inc. said it expects its leasing business to power earnings in 2026, cushioning the continued softness in residential sales.

In a press briefing last week, Ayala Land president and CEO Anna Ma. Margarita Bautista-Dy said property development this year, growth wise, “will be at least flat, but leasing will grow double digits so it will be our key growth driver for 2026.”

Anna Ma. Margarita Bautista-Dy, president and CEO of Ayala Land

A banner year

“It will be a banner year for us, as far as leasing is concerned. If I combine the malls and the offices, we have (more than) 250,000 sqm of leasable space that we will be bringing to the market this year. That’s fresh space,” Dy said.

Ayala Land’s leasing, according to Dy, currently accounts for about 45 percent of the company’s earnings before interest, taxes, depreciation, and amortization (Ebitda), while property development contributes 55 percent. By 2027, this is expected to balance out to 50-50 much earlier than the company’s initial target of 2029.

“It (has) always been an aspiration for us to have a more balanced portfolio. We’re seeing opportunities in growing our leasing assets,” Dy said.

She disclosed that for malls, Ayala Land has about 800,000 sqm, of which 200,000 sqm will be launched this year, while the remaining 600,000 sqm are under planning and construction. For offices, aside from the 70,000 sqm to be launched this year, Ayala Land has another 230,000 sqm being planned. And as for its hospitality business, there are about 1,500 hotel keys in the pipeline, including the 276 rooms of Mandarin Oriental, slated to reopen by end 2026.

Even its capital spending this year reflects Ayala Land’s increased focus on its leasing business.

Of the planned P70 billion to P80 billion capital expenditures (capex) set for 2026, 38 percent will be earmarked for Ayala Land’s leasing projects, while the rest will be allocated for payments for land acquisition costs, and for residential developments, Dy said.

Continued residential launches

This leasing push comes as residential demand remains uneven across locations.

Even so, Ayala Land still plans to launch new projects this year, with a larger share in horizontal communities outside Metro Manila and Luzon. The target is to launch some P30 billion worth of projects in 2026, scaled down from the P60 billion last year, and the P80 billion level seen two years ago.

“That P60 billion we launched last year considers an almost P30 billion, high value project in Laurean Residences. Now, it’s quite spread out. We will have launches in both the core and premium (segments), primarily horizontal (projects),” said Mike Jugo, head of Premium Residential Business at Ayala Land.

Mike Jugo, head of Premium Residential Business of Ayala Land

“We also are aware that there are some oversupply situations in particular areas, and we cannot deny that,” Dy added, noting that upcoming launches will depend on “very granular” market conditions. Inventory stands at around 19 months, which the company considers manageable. New projects, meanwhile, remain ready for launch once market absorption improves.

“We actually have a lot of projects that we are ready to launch if we see the opportunity,” Dy said.

Ayala Malls Arca South is the latest addition to the company’s growing retail portfolio.

Activating estates

The emphasis on horizontal expansion outside the capital region, meanwhile, aligns with demographic demand and the company’s extensive landbank. Ayala Land holds about 9,500 hectares and has been deploying roughly 800 ha annually.

Dy added that they still have a few more estates they are mulling to open, but the immediate focus is to activate and populate Ayala Land’s existing estates.

“Given that money has become more expensive, the focus has to be more on

utilizing the landbank, particularly since we’ve had this for a while already. We’re still in a utilization mode, at least on the existing landbank we have. Any land we acquire at this point has to be something that we can use immediately,” she added.

Last year, Ayala Land posted P39.1 billion in net income, driven largely by the company’s expanding leasing and hospitality segment and gains from portfolio management initiatives.

Consolidated revenues rose 5 percent to P190.2 billion, while net income from core operations grew 8 percent to P30.6 billion. Property development remained the largest contributor, generating P113.9 billion in revenues for the firm despite persistent headwinds.