Construction Industry Pulse for H1 2024 (Part 3: Real Estate Companies)

How did the leading real estate companies in the Philippines fare during the first half of 2024?

Various government infrastructure initiatives, such as the administration’s Build, Better, More program and the rise of public-private partnerships (PPPs) supported by the private sector, are currently fueling the remarkable growth of the Philippine construction sector. Complementing these strong drivers is the expanding real estate market, which plays a pivotal role in shaping the trajectory of the country’s overall construction industry growth.

During the second quarter of 2024, the construction industry contributed 16.0% of the country’s 6.3% GDP growth (Philippine Statistics Authority). Key players in this notable development are the leading local real estate developers who are actively shaping the urban landscape by addressing the increasing demand for both housing and commercial spaces.

This article is the third part of our Construction Industry Pulse H1 2024 Series, where we take a closer look at the status of the nation’s construction industry. In this installation, we will take a closer look into the performances of the top five major developers in the Philippines: Ayala Land, Inc. (ALI), Megaworld Corporation, Filinvest Land, Inc. (FLI), Vista Land & Lifescapes, Inc., and Robinsons Land Corporation (RLC). We will examine their latest projects, financial performance, and contributions to the construction industry’s vibrancy in the first half of 2024.

The five developers featured in this article collectively account for a significant portion of the construction industry’s market share. They have a proven track record of delivering high-quality projects and have played a pivotal role in transforming the Philippine landscape. By analyzing the performance of these developers, we can gain valuable insights into the trends and opportunities shaping the construction industry in the Philippines.

Overview of the Construction Industry for H1 2024

2024 was a particularly profitable year for the local real estate industry. With a surge in public spending, particularly in infrastructure and urban renewal, new opportunities are emerging for developers, especially in areas near these projects. Following the pandemic’s market devastation, the ‘office-first’ strategy facilitated the revival of commercial real estate.

By the third quarter of 2023, residential property prices have already seen a 12.9% increase, reflecting growing interest outside Metro Manila. Retail spaces are holding strong, and the hospitality sector is nearing pre-pandemic occupancy levels, boosted by a rise in international tourists. 

As the Philippines opens its doors wider, the real estate market stands ready to capitalize on these trends, making 2024 a profitable year for both developers and investors. Let’s look at how the biggest players in the Philippine real estate market fared during the first half of 2024. 

Ayala Land, Inc. (ALI)

Image from Ayala Land/Facebook

Company Profile

In 1988, Ayala Corporation, a prominent conglomerate in the Philippines with deep historical roots in various industries, established Ayala Land, Inc. (ALI) as a subsidiary. Since its inception, ALI has prioritized sustainable property development, distinguishing itself through a diverse portfolio that includes residential, commercial, and mixed-use developments. The company focuses on creating integrated communities that blend lifestyle, work, and leisure, underpinned by their commitment to environmental stewardship and social responsibility.

Industry Pulse and Key Company Developments

• In H1 2024, Ayala Land continued to solidify its leadership in the real estate sector through strategic investments and project launches, particularly in premium residential and commercial spaces. The company emphasized its commitment to sustainability, evidenced by the closure of ₱20.5 billion in debt through its innovative Sustainability-Linked Financing (SLF) Program.
• For the first half of 2024, ALI spent ₱36.5 billion on its CapEx (capital expenditures). 51% (approximately ₱18.6 billion) was specifically spent on developing residential properties, while 27% (around ₱9.9 billion) was allocated to estate development.

Recent Key Financial Highlights

Ayala Land’s financial performance in the first half of 2024 demonstrated its resilience and robust market position. The company reported a 15% increase in net income, reaching ₱13.1 billion, driven by strong consumer demand and strategic project execution. Consolidated revenues also showed significant growth, totaling ₱84.3 billion, with substantial contributions from property development and leasing activities.

Ayala Land, Inc. (ALI) showcased strong financial performance in H1 2024, particularly in the residential segment, where revenues surged by 40%. This growth is a reflection of robust property demand and successful project launches in premium markets. While the office-for-sale segment faced challenges, the company’s diverse portfolio and strategic focus on high-demand areas mitigated the impact. In addition, ALI’s commitment to sustainability, highlighted by its ₱20.5 billion Sustainability-Linked Financing (SLF) Program, further strengthens its competitive position and appeals to environmentally conscious investors.

Megaworld Corporation

Image from Megaworld Corp./Facebook

Company Profile

Megaworld Corporation, established in 1989, has made a name for itself as a major developer of integrated urban townships in the Philippines. The company specializes in creating lifestyle communities with concepts that blend residential, commercial, and leisure spaces. With a focus on mixed-use developments, Megaworld has been instrumental in transforming landscapes across the Philippines, certainly influencing the standard for modern urban living in the country.

Industry Pulse and Key Company Developments

• In the first half of 2024, Megaworld Corporation embarked on several significant projects. Notable major projects by the real estate developer accumulated to ₱18 billion during Q2 2024 alone, including new townships and residential developments in high-growth areas of the country, such as Bulacan, Cebu, Palawan, and Batangas. The list of projects is below.
  • 9 Central Park—West Wing at Northwin Global City in Bulacan
  • One Portwood Residences at Newport City in Pasay City
  • CostaVida Residential Resort at The Mactan Newtown in Lapu-Lapu City, Cebu
  • Lialto Beach and Golf Estates—Phase 1 in Lian, Batangas
  • Sonrisa Gardens at Baytown Palawan in Puerto Princesa, Palawan
• Apart from their residential projects, Megaworld also ventured into the hospitality sector by opening the Grand Westside Hotel in Parañaque City, highlighting the company’s focus on capitalizing on the resurgence of tourism.

Recent Key Financial Highlights

Megaworld Corporation experienced significant growth in H1 2024, primarily driven by a 30% increase in residential sales, reflecting strong demand for its township developments in regions like Taguig City, Cavite, and Cebu. This growth strategy emphasizes expanding into provincial areas, allowing the company to tap into new markets beyond urban centers.

The tourism sector’s resurgence significantly boosted revenues from its hotel and resort operations. Notable developments, including the newly opened 1,530-room Grand Westside Hotel and the upcoming ₱1.5 billion Mactan Expo Center, position Megaworld to capitalize on the recovery in travel and events, contributing positively to its financial performance.

Overall, Megaworld’s diversified portfolio and proactive expansion strategies reinforce its leadership in the Philippine real estate market, ensuring continued resilience and adaptability in such a dynamic industry.

Filinvest Land, Inc. (FLI)

Image from Wikipedia/Manila Standard

Company Profile

Founded in 1955, Filinvest Land, Inc. (FLI) is one of the oldest and most established real estate firms in the Philippines. With a legacy spanning over six decades, FLI has developed a reputation for delivering quality residential, commercial, and mixed-use developments across the country.

FLI specializes in creating a diverse range of properties that include residential subdivisions, townships, and commercial spaces. The company places a strong emphasis on affordability, aiming to provide housing solutions that cater to various segments of the market, from low-cost housing to mid-range residential projects.

Industry Pulse and Key Company Developments

• In H1 2024, Filinvest Land, Inc. launched 10 new projects valued at ₱14.70 billion, signaling a strong commitment to expansion in both established and emerging markets. The company has identified key areas for development, including Davao City and the CaLaBaR region (Cavite, Laguna, Batangas, Rizal), which are becoming increasingly attractive due to their economic potential and infrastructure improvements.
• FLI also focuses on developing master-planned communities with integrated amenities such as parks, schools, and commercial areas to promote sustainable urban development.

Recent Key Financial Highlights

Filinvest Land, Inc. has shown significant growth in H1 2024, with a 22% increase in residential sales totaling ₱7.38 billion. This surge reflects the strong demand for affordable housing in a recovering market. The completion of key projects in Taguig, Valenzuela, and Dumaguete highlights FLI’s commitment to quality developments.

By targeting next-wave cities like Davao and the CaLaBaR region, FLI is well-positioned to benefit from the rise of IT-BPO hubs. The company’s plan to launch ₱25 billion in new projects by the end of 2024, along with the integration of amenities in master-planned townships, underscores its strategic focus on community development and value enhancement. This diverse portfolio helps mitigate risks associated with market fluctuations, supporting FLI’s performance in the real estate sector.

Vista Land & Lifescapes, Inc.

Image from Real Estate Asia/Daily Tribune

Company Profile

Vista Land & Lifescapes, Inc., established in 2007, has become a key player in the Philippine real estate sector, known for its extensive nationwide presence. Over the years, the company has solidified its reputation by focusing on innovative residential developments that integrate lifestyle concepts, catering to the diverse needs of the Philippine market.

Vista Land specializes in residential developments, with a strong emphasis on creating integrated lifestyle communities. These projects often combine residential units with commercial spaces, parks, and recreational areas, promoting a holistic living experience.

Industry Pulse and Key Company Developments

• In the first half of 2024, Vista Land launched several projects valued at ₱22.2 billion, demonstrating its commitment to upscale developments and strategic partnerships. This move highlights the company’s ongoing commitment to upscale development by catering to the increasing demand for quality housing in both urban and provincial areas. 
• Vista Land underscored its emphasis on asset maximization through the Vista Estates strategy, which encompasses 26 locations nationwide. This approach facilitates the development of comprehensive residential complexes while actively planning to introduce more vertical residential projects that align with urbanization trends.

Recent Key Financial Highlights

Vista Land & Lifescapes, Inc.’s robust financial performance in H1 2024, marked by an 11% increase in net income and an 8% growth in consolidated revenues Y-o-Y, reflects its effective asset diversification strategy. By generating significant revenues from both real estate and rental income, the company capitalizes on diverse market opportunities.

The company’s extensive geographical presence across 147 cities and municipalities in 49 provinces enhances its resilience against regional market fluctuations, with 60% of its landholdings in provincial areas. During the first half of 2024,  Vista Land maintains stable growth, further supported by a successful bond offering of US$350 million in July 2024, which underscores investor confidence in its strategic vision and performance.

Robinsons Land Corporation (RLC)

Image from Business World Online

Company Profile

Founded in 1980, Robinsons Land Corporation (RLC) holds a significant position in the Philippine real estate industry. It operates as a subsidiary of JG Summit Holdings, focusing on a diverse array of real estate segments that encompass residential, commercial, and investment properties.

RLC specializes in various real estate developments, including investment properties such as shopping malls and office buildings, residential projects offering a range of housing options, and commercial developments that cater to businesses and consumers alike.

Industry Pulse and Key Company Developments

• The rental income from Robinsons Malls surged by 12%, reflecting increased foot traffic and enhanced tenant performance. Additionally, the residential division, RLC Residences, recorded an impressive net sales take-up of ₱5.45 billion in Q2 2024 alone.
• RLC has actively pursued strategic acquisitions and partnerships to expand its portfolio and enhance operational capabilities. This includes investments in new residential developments and collaborations with technology partners to improve property management and customer engagement. 

Recent Key Financial Highlights

Robinsons Land Corporation’s financial results in H1 2024 demonstrate the capabilities of its diversified portfolio amidst market challenges. The notable increase in net income, particularly after adjusting for one-time gains, highlights the company’s effective management and operational strategies.

The recovery in consumer spending significantly contributed to revitalizing the retail and hospitality sectors, as evidenced by a 12% rise in rental income from Robinsons Malls and a 42% surge in hotel and resort revenues. Additionally, the residential division, RLC Residences, experienced a remarkable rebound, with net sales take-up increasing eightfold from Q1 to Q2. This suggests a growing demand for residential properties at a time when buyers are actively returning to the market.

Overall, RLC’s adaptability and strong performance puts it in a favorable position for continued growth in the Philippine real estate sector.

Construction Industry Pulse For H1 2024

The first half of 2024 showcased a notable performance within the Philippine real estate sector, with key players such as Ayala Land, Megaworld, Filinvest, Vista Land, and Robinsons Land making significant strides in both growth and innovation. Each of these developers has demonstrated resilience and adaptability in the face of market challenges, leveraging strategic investments and a keen focus on sustainability to cater to evolving consumer demands.

The notable financial highlights from these companies reveal much more than an upward trajectory in revenues and net income—it also highlights a renewed confidence in property demand in the country, which is indicative of a broader recovery within the construction industry. 

Ayala Land’s commitment to sustainable practices, Megaworld’s expansion into provincial markets, Filinvest’s focus on affordability, Vista Land’s diverse asset portfolio, and Robinsons Land’s resilience through diversified offerings collectively underline the vital role of real estate in driving economic growth in the Philippines.

Looking ahead, the implications of these trends are important. As the market continues to embrace sustainability and prioritize consumer preferences, the adaptability of these developers will be crucial. The ongoing recovery in tourism, coupled with increasing urbanization, is likely to further fuel demand for residential and commercial spaces. Thus, the landscape for the Philippine construction and real estate markets appears promising, with opportunities for continued growth and innovation in the coming years.

This is the third part of PinoyBuilder’s Construction Industry Pulse For H1 2024 series. You can check out other installations in the series below:

Construction Industry Pulse for H1 2024 (Part 1: Construction Companies)

Construction Industry Pulse for H1 2024 (Part 2: Construction Retailers)

References:

Adonis, M. J. (2024, August 9). RLC H1 earnings up 25% to P7.25B. Business Inquirer. Retrieved September 26, 2024, from https://business.inquirer.net/473927/rlc-h1-earnings-up-25-to-p7-25b

Alfaro, E. J. (2024, August 10). Robinsons Land H1 profit jumps 25% to P7.2B. The Manila Times. Retrieved September 26, 2024, from https://www.manilatimes.net/2024/08/10/business/corporate-news/robinsons-land-h1-profit-jumps-25-to-p72b/1963035

AyalaLand. (n.d.). ALI 1H24 net income up 15% to P13.1B. AyalaLand. https://www.ayalaland.com.ph/news/ali-1h24-net-income-up-15-to-p13-1b

Cordero, T. (n.d.). Vista Land books P6.4B net income, up 11% in H1 2024. GMA News Integrated. https://www.gmanetwork.com/news/money/companies/917305/vista-land-books-p6-4b-net-income-up-11-in-h1-2024/story/

Daily Tribune. (n.d.). Filinvest Land reports 11% YOY H1 growth Read more at: https://tribune.net.ph/2024/08/14/filinvest-land-reports-11-yoy-h1-growth Read more Daily Tribune stories at: https://tribune.net.ph/ Follow us on our social media Facebook: @tribunephl Youtube: Tri. Daily Tribune. https://tribune.net.ph/2024/08/14/filinvest-land-reports-11-yoy-h1-growth

Filgit.com. (n.d.). Megaworld’s First Half 2024 Profit Rises 11% to P9.81B. Filgit.com. Retrieved September 26, 2024, from https://filgit.com/market/megaworld-s-first-half-2024-profit-rises-11-to-p9-81b

Filinvest Development Corporation. (2024, August 15). Filinvest Development Corporation’s 1H24 net income rises 41% to P5.5B, 2Q growth at 46%. Filinvest Development Corporation. Retrieved September 26, 2024, from https://www.filinvestgroup.com/filinvest-development-corporations-1h24-net-income-rises-41-to-p5-5b-2q-growth-at-46/

GMA Network. (2024, August 16). Filinvest nets P5.5 billion in H1, up 41% | GMA News Online. GMA Network. Retrieved September 26, 2024, from https://www.gmanetwork.com/news/money/companies/917308/filinvest-nets-p5-5-billion-in-h1-up-41/story/

iTechSolution. (n.d.). Ayala Land, Inc.’s H1-2024 Net Income is Up 15% to P13.1 Billion. iTechSolution. https://www.itechsolutionph.com/blog/ayala-land-incs-h1-2024-net-income-is-up-15-to-p131-billion

Mercurio, R. (2024, August 15). Ayala earnings rise to P22.3 billion in H1. Philippine Star. Retrieved September 26, 2024, from https://www.philstar.com/business/2024/08/15/2377892/ayala-earnings-rise-p223-billion-h1

Philippine Star. (2024, August 8). Megaworld earnings jump 11% to P9.8 billion in H1. Philippine Star. Retrieved September 26, 2024, from https://www.philstar.com/business/2024/08/08/2376155/megaworld-earnings-jump-11-p98-billion-h1

Philippine Star. (2024, August 10). Investment properties lift RLC earnings in H1. Philippine Star. Retrieved September 26, 2024, from https://www.philstar.com/business/2024/08/10/2376691/investment-properties-lift-rlc-earnings-h1

Santos, J. O. (n.d.). Construction Industry Pulse for H1 2024 (Part 1: Construction Companies). PinoyBuilders. https://pinoybuilders.ph/construction-industry-pulse-for-h1-2024-part-1-construction-companies/

Santos | Knight Frank. (n.d.). Philippines Real Estate Outlook 2024. Santos | Knight Frank. Retrieved September 26, 2024, from https://santosknightfrank.com/wp-content/uploads/2024/02/Philippine-Real-Estate-Outlook-2024-Growth-Paths.pdf

Vista Land. (2024, August 15). Vista Land Posts 11% Growth in 1H2024 Net Income to ₱6.4B Amid Strong Project Launches. Vista Land. Retrieved September 26, 2024, from https://www.vistaland.com.ph/news/vista-land-posts-11-growth-in-1h2024-net-income-to-6-4b-project-launches-total-22-2b/