Property developers SM Prime Holdings Inc. and Ayala Land Inc. reduced their capital expenditure budgets this year from their initial plans to rein in spending after embarking on aggressive expansion over the past several years.
SM Prime said in its third-quarter financial report it expected to incur capital expenditure of P45 billion in 2016, or 25 percent lower than P60 billion programmed capital spending it announced at the start of the year.
SM Prime vice president for finance Ma. Teresa Cecilia Reyes said in a text message the reduced budget this year was due to delayed land banking activities.
SM Prime operates 58 shopping malls in the Philippines and six malls in China. It also has 27 residential developments mostly in Metro Manila and launched three projects with 6,000 units in the first nine months.
The Sy-owned integrated property firm was scheduled to open a new mall and expand SM Center Molino and SM City San Pablo in the fourth quarter.
It also intends to launch 4,500 condominium units in Pasay City, Quezon City, Parañaque City and Bulacan province.
Meanwhile, Ayala Land said in a recent analysts briefing it expected to end the year with lower capital expenditure than earlier projected.
“Compared to the budget of P84 billion capital expenditures, we expect to end the year with lower capital spending as we continue to tighten spending,” Ayala Land chief finance officer Jaime Ysmael said.
The company’s capital expenditure stood at P63.9 billion as of end September, of which 40 percent was spent in residential projects and 27 percent in commercial leasing projects.
Ayala Land said it would continuously expand its business with 1 million square meters of office space currently under construction and some 259,000 sqm of office space slated for completion next year.
Ayala Land registered a net income of P15.06 billion in the first nine months, up 17 percent from the same period last year on double-digit growth in revenues from core businesses.