AYALA Land, Inc. (ALI) is optimistic its residential business will cushion the decline from other segments as it recorded growth in sales during the second quarter.

In a statement over the weekend, the listed property developer said it was “seeing encouraging signs” in its residential business, as this segment showed increasing sales from April to May and April to June despite the strict lockdown.

“We’re seeing a pick-up in activity in residential sales as early as now. We hope that positive trend will continue,” ALI President and Chief Executive Officer Bernard Vincent O. Dy was quoted in the statement as saying.

The company noted its mall segment continues to be affected by the coronavirus pandemic, as malls remained closed for most parts of the second quarter, and to date, are still on limited operations.

ALI’s hotel and resorts segment likewise remain dampened as travel is still restricted to contain the coronavirus.

In the first quarter, ALI’s earnings fell 41% to P4.3 billion due to lower bookings and project completions, which it attributed to the Taal Volcano eruption in January and the lockdown in mid-March.

Nearly all its business segments recorded revenue declines during the period, except for its office leasing business, which posted a 15% revenue growth to P2.5 billion due to the sustained operations of the outsourcing industry.

Despite this backdrop, Mr. Dy said the company remains hopeful it will weather the coronavirus storm on the back of the Philippine’s strong economy, citing low interest rates, low inflation rate and stable exchange rates.

“If you look at long term trends of property, taking into account various economic cycles, I believe property continues to be one of the best, if not the best, performing asset class,” he said.

Mr. Dy added ALI has yet to see a meaningful price correction, and believes there would not be price reductions as large as during the 1997-98 Asian financial crisis, when capital values fell as much as 14% and office rents by 16%.

Last week, ALI received the go-ahead from the Securities and Exchange Commission to do a P15.1-billion real estate investment trust (REIT) offering by July 27-31.

If it proceeds, this would be the country’s first REIT offering in history, and the shares will start trading at the Philippine Stock Exchange on Aug. 7.

Shares in ALI at the stock exchange dropped 95 centavos or 2.88% to close at P32 each on Friday. — Denise A. Valdez