MikeLigalig.com

By: Doris Dumlao-Abadilla
@inquirerdotnet
Philippine Daily Inquirer
07:54 AM February 22nd, 2016


PROPERTY giant Ayala Land Inc. is unwinding its property investment in mainland China and instead focusing its overseas investing activities closer to home in Southeast Asia.

ALI chief finance officer Jaime Ysmael said in a press briefing on Friday that ALI was just trying to sell the remaining residential units and would afterwards liquidate its interest in the special purpose vehicle created to hold the investment in Tianjin Eco-City – 150 kilometers from Beijing – a 3,000-hectare collaboration between the Chinese and Singaporean governments to showcase advanced urban planning and sustainable development.

“We already gave up on another site that was allocated to us,” Ysmael said. “It’s very difficult in the current market.”
 
Ysmael said ALI would likely end up with a break-even position from its investment in Tianjin, which was made in 2010 when the company teamed up with Sino-Singapore Tianjin Eco-City Investment and Development Co. Ltd. (SSTEC) to develop a 19-tower residential complex. SSTEC is a joint venture between a Chinese consortium led by Tianjin TEDA Investment Holding Co. Ltd and the Singapore consortium led by the Keppel group.

“It was definitely a learning experience,” Ysmael said, when asked about ALI’s inaugural foray into China. “It opened our eyes on how they actually operate: they really build very massive, and right away, and (have) access to the supply chain. We were able to gain access to some of those.”

One key difference with the Philippine residential market is that pre-selling of residential units ahead of a certain level of completion was not allowed in China so a developer like ALI would need to finance the project in the interim.

ALI’s decision to unwind its investment in China also comes in the aftermath of massive chemical warehouse explosion in another part of Tianjin in August 2015 that killed over a hundred people. This has been described as China’s worst industrial disaster in years.

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