Ayala moves into Boomtown

Indeed, it is such a delight to receive news that listed real-estate company Ayala Land Inc., one of the country’s biggest real-estate developers, is now targetting Subic Bay for expansion. The company, a news report indicates, proposes to build a P3-billion mixed-use development in the former Subic US naval base reportedly as part of its countrywide strategy to acquire or co-develop large tracts of land.

It was in late October that Ayala Land disclosed to the local stock exchange that it signed a 50-year lease agreement with the government-led Subic Bay Metropolitan Authority (SBMA), the agency that manages the Subic Bay Freeport and Economic Zone in Zambales. To a large extent, it is a feather in the cap of SBMA boss Armand Arreza that Ayala Land opted to venture with Subic during his administration.
As part of the lease agreement, Ayala Land was reported interested in developing a 7.5- hectare “master planned community” within Subic’s central building district. This is the area near the Magsaysay Gate that goes out to Olongapo City. The proposed development will reportedly include a new shopping mall, new business-process outsourcing buildings, and a new hotel.
If memory serves me, this is Ayala Land’s first major foray into mixed-used commercial development in Central Luzon. Its Avaya Cove project in Bataan is a residential project that is more recreational and leisurely in nature. For Subic, what is reportedly planned is shopping mall and office space development, including a new hotel.
About a decade ago Ayala Land started a similar development effort in Southern Luzon, particularly the Laguna area. But with the Northern Luzon Expressway as well as the Subic-Clark-Tarlac Expressway now providing easy access to the Subic-Clark economic corridor, the country’s newest boomtown region, Ayala Land’s timing to move into Central Luzon couldn’t have been better.
The Tarlac-La Union Expressway will soon be underway, along with the rehabilitation of MacArthur Highway as well as the old railway line from Manila to Clark in Pampanga. In addition, the Diosdado Macapagal International Airport at Clark is up for redevelopment as well, while the Subic International Port has just gone through a facelift. Indeed, Ayala Land’s timing is impeccable.
“This development is part of the company’s strategy to establish mixed-use master planned growth centers in various parts of the country,” said Ayala Land in a statement. It said the development would cater to nearby areas of Subic and Olongapo, and may also serve as a draw for local and international tourists.
Ayala Land can’t go wrong with the latest move. The SM group of the Sy family has long shown the way with regard to mall development in urban areas outside Metro Manila. To some extent, it may be seen that Ayala Land had chosen niche markets, rather than the very broad expansion strategy of SM. And perhaps rightly so, given that both companies don’t necessarily cater to the same markets.
“The company’s development will be a catalyst for growth in the Subic-Olongapo corridor,” Ayala Land said in a statement. This, it added, will spur growth particularly from retail, office and hotel locators and create an estimated 10,000 new jobs in the area. This will truly augur well for Subic, and is a much-needed private sector effort to add to the development of the Freeport.
Not to take away anything from Ayala Land, but the real catalyst for growth in the Subic-Clark corridor, in my humble opinion, is the Subic-Clark-Tarlac Expressway, which was initiated with much thanks to the foresight of former BCDA chief Rufo Colayco. He pushed the project during the Estrada and Arroyo administrations, and its completion saw the emergence of Boomtown.
For sure, with Ayala Land now coming in, SBMA boss Armand Arreza is bound to come out with new projects that will benefit the Freeport, its locators, the neighboring communities, and most important, the people of the Subic-Clark-Tarlac corridor. Ayala Land’s big project, for sure, is just the beginning.

Marvin A. Tort is a veteran business journalist. He is a former Managing Editor of BusinessWorld and also a former chairman of the Philippine Press Council. He is presently into various businesses including gaming and IT, and business and communication consulting. He also writes a twice-weekly column for the BusinessMirror, and is the Philippine Marketing Representative of Institutional Investor Magazine.