Property giants battered by pandemic in 2020

Some of the country’s biggest property companies suffered double digit losses on profits last year, as they were unable to complete their projects due to business restrictions enforced by the government.

Ayala Land Inc.’s net income crashed 74 percent to P8.72 billion in 2020, from P33.18 billion in 2019, as revenue fell 43 percent to P96.27 billion from P168.79 billion.

The real estate business of the Ayala family attributed the drop to two major catastrophes: first, the eruption of Taal Volcano in January that affected some of its assets in Batangas, Cavite and Laguna; and second, the spread of COVID-19 in the country that compelled the government to enforce quarantine regulations.

Ty-owned Federal Land Inc. likewise saw its net income slide to P623.7 million last year, from P1.61 billion in 2019 as consolidated revenues decreased to P9.25 billion from P13.15 billion.

A slowdown in construction due to mobility restrictions put in place to contain the transmission of the virus led to the decline. Federal Land also had to delay its equity collections to support the government’s stimulus package.

Andrew Tan’s Megaworld Corp. saw its net income slump by close to 45 percent to P9.88 billion in 2020, from P17.93 billion in 2019, along with a decline in revenues by more than a third to P39.27 billion, from P61.96 billion.

Due to the losses, Megaworld may be hindered from acquiring new land for future development, as it may fail to lease its properties on time and collect rent at profitable rates.

SM Prime Holdings Inc. also suffered a decline of more than half in its net income to P18 billion last year, from P38.08 billion in 2019, as its consolidated revenues crashed by over 30 percent to P81.89 billion, from P118.31 billion.

The property subsidiary of the Sy clan’s SM Investments Corp. attributed the plunge to the closure of its malls at the height of the lockdowns. During this period, SM Prime waived a total of P23.3 billion in rental fees to mitigate the shutdown’s impact to its tenants.