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Business

Southeast Asia beckons as China declines

MANILA -- As the Philippine developer eases out of China's cooling property sector, Ayala Land has turned to Malaysia for its first overseas toehold in Southeast Asia.

     On Monday, the company informed the Philippine Stock Exchange that its subsidiary Regent Wise Investments has acquired a 9.16% stake and one of seven seats on the board in the newly-listed MCT Consortium, formerly GW Plastics Holdings. The deal was done through a private placement and is valued at 1.9 billion pesos ($43 million).

     Ayala Land President and CEO Bernard Vincent Dy was not forthcoming about the company's strategy with MCT. "It depends on the opportunity," he told reporters on Monday after a shareholder meeting. "There will be situations that we have to take an active role; there will be situations that it may not be necessary."

     With a market capitalization of around $450 million, MCT specializes in mixed-use projects comprising retail spaces, offices, hotels and less expensive residential developments -- very much the same portfolio profile Ayala Land has evolved in the Philippines.

     "ASEAN is one of the fastest growing regions in the world," said Dy. "Although the Philippines is growing quite aggressively, we feel that there are opportunities in the region."

     The move into Malaysia is the firmest so far as Ayala Land looks elsewhere in the region for opportunities. The company has been in talks with City Mart in Myanmar over a residential project, and continues to scout for partners in Vietnam, Indonesia and Thailand.

     The shift to Southeast Asia comes as the company runs down its residential inventory in China's Tianjin City. According to Chief Financial Officer Jaime Ysmael, there are no plans for further projects in China at present.

     Ayala Land was the biggest property firm in the Philippines until SM Group consolidated its real estate assets into SM Prime Holdings in 2013, turning the mall developer into a real estate conglomerate.

     Ayala Land remains a major player in the Philippine property sector with 100 billion pesos earmarked this year for development projects. The company made 14.8 billion pesos net income last year, up 26% from 2013, and is targeting 40 billion pesos by 2020.

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