Ayala Land, Inc. (ALI) Earnings Call Transcript & Summary

Good afternoon, everyone. Thank you for joining us today, and welcome to Ayala Land's First Quarter Briefing. Let me begin by introducing our panel. Meean Dy, President and CEO; Toti Bengzon, CFO and Treasurer; Mike Jugo, Head of the Premium Residential Business Group; Mariana Zobel De Ayala, Group Head for Leasing and Hospitality. We're also joined today by members of our management committee; Robert Lau, Head of Strategic Growth, New Ventures and Central Land Acquisition; Darwin Salipsip, Group Head of Construction Management; Raquel Cruz, Head of the Core Residential Business Group; and Isa Sagun, Chief Human Resources Officer. We likewise acknowledge the presence of our broader management team. Please note that the press release and presentation materials are available on our Investor Relations website at ir.ayalaland.com.ph. For any questions we may not be able to address during the briefing, we will respond via e-mail at the soonest possible time. At this point, I'd like to turn it over to our CFO, Mr. Toti Bengzon, for his presentation.

Thank you, [ Joahnna ]. And good afternoon to all our friends. Allow me to present our financial and operational performance for the first quarter of the year to be followed by a message from our CEO. The company delivered double-digit earnings growth in the first quarter of 2025, achieving a net income of PHP 6.9 billion. This is 10% higher than last year. Our consolidated revenues totaled PHP 43.6 billion, a 6% year-on-year improvement, driven by resilient property development bookings and healthy leasing operations. CapEx in the first quarter stood at PHP 20.6 billion, mostly for the build-out of our property development projects, estates and leasing and hospitality assets. We maintained a healthy gearing level at 0.75:1. Breaking down revenues by business segment, let's start with the big numbers. Property Development revenues expanded by 11% to PHP 27.8 billion, lifted by contributions from our premium residential offerings and commercial and industrial lots for sale. Our Residential revenues reached PHP 22 billion. This is 3% more than the previous year, anchored on the resilience of the premium segment. Meanwhile, the combined revenues from the sale of estate lots and office condominiums accelerated by 60% to PHP 5.8 billion, primarily coming off the strong lot sales at Arca South. And as we implement reinventions across our flagship malls and hospitality assets, our leasing revenues totaled PHP 11.6 billion. This is a 7% increase from the same period last year on the back of stable occupancy and lease escalation. Shopping center revenues grew by 4% to PHP 5.7 billion on the back of growing contributions of core and emerging malls. Office leasing revenues reached PHP 2.9 billion, also 4% higher year-on-year with lease escalation and sustained better-than-industry occupancy levels. In addition, revenues from hotels and resorts expanded by 10% to PHP 2.6 billion, anchored on improving occupancy and room rates, notwithstanding the closures of hotels currently undergoing renovation. Our emerging industrial real estate portfolio of warehouses, cold storage and industrial land for lease accounted for PHP 357 million in revenues, 60% more than the first quarter of 2024, driven by AREIT's industrial land holdings and newly opened cold storage facilities. Our service businesses composed of construction, property management and other ancillary services declined by 24% to PHP 3.2 billion due to the absence of airline revenues from the sale of AirSWIFT last year as well as the completion of third-party construction contracts. Our net construction revenues declined by 9% to PHP 2.4 billion, while property management and other ancillary service revenues stood at PHP 800 million. Breaking down our income statement. Real estate revenues reached PHP 42.6 billion. This is 6% higher year-on-year, lifted by the resilient property development revenues complemented by healthy leasing revenues, notwithstanding our mall and hospitality reinvention initiatives. Interest and other income grew by 4% to PHP 924 million on account of higher equity earnings from associates and JVs as well as interest and investment income. Equity in net earnings of associates and JVs ended 29% higher at PHP 534 million, driven by higher earnings from Ortigas Land and our FBDC companies. Interest and investment income climbed by 16% to PHP 213 million from a higher average daily balance from our short-term investments and cash deposits. Other income of PHP 177 million is a 39% decline year-on-year due to lower collection of management fees from FBDC in our joint venture with the Eton Group due to lower incremental percentage of completion on nearly completed projects. Meanwhile, total expenses were managed and grew by 4% to PHP 33.1 billion. Real estate expenses, in particular, totaled PHP 25.8 billion, nearly the same level as last year, while general and administrative costs were managed, up 7% year-on-year to PHP 2.4 billion. Our GAE ratio settled at 6%. This is steady versus the first quarter of 2024. Our EBIT margin stood at 35%. This is a percentage -- a 4 percentage point improvement from 31% last year and well within our target range of 30% to 35%. Interest expense, financing and other charges reached PHP 4.9 billion, 39% higher year-on-year, driven by costs from our accounts receivable sale program, which we executed in the first quarter of this year, which was absent in the same period last year. Deducting expenses from revenues, income before tax grew by 13% to PHP 10.4 billion, and this increase translated to an income tax provision of PHP 2 billion. We've maintained our average tax rate at 19.6%. Income before noncontrolling interest totaled PHP 8.4 billion, 13% more than last year. And netting off our noncontrolling interest from JVs and associates, which grew by 26% to PHP 1.4 billion. Net income attributable to ALI Equity Holders grew by 10% to PHP 6.9 billion. Allow me to break down our revenues by business segment. Property Development revenues accelerated by 11% to PHP 27.8 billion. Residential revenues from our premium and core brands, including the contributions of Avaland, our Malaysian subsidiary, rose by 3% to PHP 22 billion, mainly driven by higher bookings from the premium segment. Revenues from commercial and industrial lots more than doubled to PHP 5.7 billion, driven by lot sales at Arca South. Office for sale revenues declined by 88% year-on-year to PHP 96 million as lower incremental POC offset new bookings recorded during the period. Revenues from our leasing and hospitality business reached PHP 11.6 billion. This is a 7% improvement year-on-year. Shopping center revenues grew by 4% to PHP 5.7 billion on stable occupancy, lease escalation and the growing contribution coming from our core and emerging malls. Office leasing revenues also grew by 4% to PHP 2.9 billion from lease escalation and sustained better-than-industry occupancy levels. Hospitality revenues reached PHP 2.6 billion, 10% higher on improving occupancy and room rates. In addition, our industrial real estate revenues climbed by 60% to PHP 357 million, driven by AREIT's industrial land and newly opened cold storage facilities. Our service businesses composed mainly of construction, property management and ancillary services declined by 24% to PHP 3.2 billion. MDCs, giving some color on service businesses. MDC's net construction revenues dipped by 9% to PHP 2.4 billion with the completion of our data center engagement with ePLDT. Property Management revenues and other ancillary services revenues declined by 50% to PHP 800 million due to the absence of airline revenues with the sale of AirSWIFT last year. Summing up the top line, real estate revenues amounted to PHP 42.6 billion, 6% higher from last year with interest and other income of PHP 924 million, total revenues grew by 6% to PHP 43.6 billion. Allow me to share with you our -- the [ ops stats ] of our operating businesses, starting with Property Development. Total Property Development sales reservations reached PHP 36.2 billion. This is 4% higher year-on-year, led by premium residential sales, which rose by 4% to PHP 20.7 billion as well as the take-up from our commercial and industrial lots, which more than tripled to PHP 4.9 billion. The strength of these segments cushioned the contraction in the core residential segment, which contributed PHP 10.5 billion to total sales. Moving on to the performance of the residential brands. Our total residential sales reached PHP 31.2 billion, 6% lower year-on-year, but we recorded a notable sequential quarter-on-quarter improvement of 17% from improved take-up of both the premium and core segments. By product type, demand for horizontal offerings continues to be healthy, growing 16% year-on-year to PHP 15.5 billion and accounting for half of total sales. Moreover, demand for our residential -- for our developments outside Metro Manila remained resilient with take-up increasing by 3% to PHP 17.3 billion and accounting for 55% of residential sales reservations. Sales during the quarter were led by the following projects: Ayala Land Premier's Virendo in Davao, Enara in Nuvali and a sequel phase of Ayala Westgrove Heights in Cavite. And for Alveo, it was the Park East Place in BGC. We launched 4 projects totaling PHP 12.6 billion during the quarter, 90% in the premium segment and 10% for core. All of the launched projects are horizontal projects located outside Metro Manila. These include Ayala Land Premier's Virendo in Toril, Davao and the sequel phase of Ayala Westgrove Heights in Cavite. In terms of our portfolio buyer profile, 72% of the sales were from local Filipinos amounting to PHP 22.5 billion, 5% lower year-on-year. However, we continue to see growth from the premium segment buyers, which was up 10% to PHP 17.2 billion. Sales from overseas Filipinos declined by 9% to PHP 4.8 billion, while sales to foreign passport holders ended 8% lower year-on-year, primarily due to a 95% decline in sales to Chinese buyers. Turning to our leasing and hospitality portfolio. For malls, total GLA of 2.2 million square meters with a portfolio lease-out rate at 89%. Total pipeline stands at 707,000 square meters under construction and under planning. For offices, total GLA of 1.4 million square meters. The lease-out rate for all our offices is 90% with the exit of our last POGO tenant in Manila Bay. Our total office pipeline stands at 362,000 square meters, and the tenant mix remains 78% BPOs, 12% corporates with no POGO exposure in place. Our vacancy rate stands at 10%, which is -- which continues to be significantly better than the industry occupancy or vacancy rate of 20%. For hotels and resorts, total of 4,264 rooms. Occupancy and room rates continue to be very healthy. The average occupancy for all our hotels is currently at 70%, 5 percentage points better than last year and 56% for resorts on par with prior year's levels. Total number of hotel and resort rooms in the pipeline stands at 4,058. Industrial, which we are going to start disclosing, given that it's a significant part of our growth initiatives, our dry warehouse GLA now stands at 358,000 square meters, while cold storage GLA is at close to 32,000 square meters. Occupancy levels are at 74% and 49%, respectively, as we continue to acquire new facilities. In terms of CapEx, still in line with our guidance for the year. For the first quarter, PHP 20.6 billion, of which 46% went to residential, 30% on -- to estate development, 16% to our leasing and hospitality portfolio and 9% on remaining land acquisition commitments. Our debt profile remains to be well managed with 90% contracted into long-term tenors. Our forecast for the year is to see a slight pickup in our overall cost of debt from 5.3% last year to 5.5% this year. 75% of our portfolio is locked into fixed rates. And as we implement our borrowing program this year, we will be extending that maturity back to about 5 years. The balance sheet remains strong with a net gearing ratio of 0.75:1. I just want to point out the 3 debt metrics that we manage carefully. So net debt to equity of 0.75: 1 translating to a gross D of 0.81. Our net debt -- our interest coverage ratio of 5.2 is an improvement from the end of last year. So just to sum up, total revenues of PHP 43.6 billion was up 6%. Net income of PHP 6.9 billion, up 10%. CapEx of PHP 20.6 billion. Net gearing of 0.75:1. In terms of segment revenues, Property Development revenues, up by 11% to PHP 27.8 billion. Leasing and Hospitality, up 7% to PHP 11.6 billion. And service revenues of PHP 3.2 billion, down 24%, primarily on account of our sale of AirSWIFT. So we're not recognizing any more income from our airline. So with that, allow me to turn you over to our CEO for her key messages.

Thank you, Toti, and good afternoon to everyone. As we close the first quarter of 2025, I'm pleased to share that Ayala Land remains firmly on track, guided by discipline, resilience and long-term perspective, even as we navigate today's complex macroeconomic landscape. Our diversified property development portfolio continues to be our anchor. While Metro Manila mid-market segment remains under pressure, our deliberate pivot towards the premium, commercial and industrial segments have yielded strong results. In particular, take-up of commercial and industrial lot sales has stood out, surging 2.2x year-on-year to PHP 4.9 billion. These now contribute 21% of Property Development revenues. We continue to benefit from healthy investor appetite evidenced by repeat purchases or repeat purchase rates of 40% for commercial and 34% for industrial lots. We have identified 3 to 4 years' worth of commercial and industrial lots to develop and sell, providing us a strong pipeline in this resilient segment. Over the years, we've consistently allocated 15% to 20% of our CapEx to priming our estates. And today, we are reaping the benefits of the sustained investments with 84% of our gross leasable area or of the gross leasable area of our leasing assets now located within our estates. On the residential front, our inventory levels have started to improve. We ended the first quarter at 21.9 months, down from 22.4 months as of end 2024. This is in spite of our launches, PHP 34.4 billion in the last month of last year and PHP 12.6 billion in the first quarter of this year. The bulk of our 2025 launches are scheduled for the second half, and we will continue to calibrate this to match market absorption. Cancellations of residential sales have trended down and now stand at 7.9% of Property Development revenues. This is a result of tighter controls on reservations and sales qualifications. More importantly, these efforts are translating to a stronger, more committed buyer base, underscoring our shift towards improving not just sales volume, but sales quality. We also made a strategic decision to accelerate the renovations of our flagship malls. This initiative will enhance our customers' experience, strengthen brand equity and solidify merchant partnerships. This will enable us to complete the upgrades by the first half of 2026, at least 6 months ahead of our original schedule. Excluding these 4 malls, mall revenues grew 11% year-on-year with merchant sales growth at 12% and other key performance indicators showing healthy momentum. Notably, occupancy at Ayala Malls Manila Bay now at 71% and One Ayala at 88% continued to rise, reflecting improved performance across our broader retail portfolio. A similar approach guided the renovations of our 4 hotels, 3 of which were fully closed for faster project delivery. Excluding these hotels, hospitality revenues rose 25% year-on-year. This highlights the strong performance of our operational assets with 70% occupancy levels. We will continue this upgrade program with 5 hotels scheduled to commence renovation by the first quarter of 2026. Our long-term investments in our estates remain a core strategy. $1.3 billion of CapEx is committed to the activation, land development and infrastructure in our estates. In addition, 96% of our upcoming retail and office GLA and 88% of our new hotel keys will rise within our estates. This reflects our enduring belief in the long-term value creation embedded in our master-planned communities. Today, we are proud to offer the broadest range of property options in both residential and commercial segments, whether for end use or investment. In every case, we are long-term partners in value creation for our customers. And even as we invest in future growth, we continue to deliver value to our shareholders today. In the first quarter, we declared PHP 4.2 billion in cash dividends. Alongside our active share buyback program, we have returned 28% of prior year's net income to shareholders. We are on track to match last year's return level of 60%. This reflects our strong commitment to providing investors with both immediate returns and long-term growth potential. Looking ahead, we are confident in the strength of our portfolio and strategies to navigate short-term volatility and capitalize on long-term value or long-term growth opportunities. In 2025, we are targeting the following milestones: opening 78,000 square meters of new retail space and 50,000 square meters of premium office space. Acquisition of a 500 key 5-star hotel in Metro Manila, forming new international hotel partnerships, the groundbreaking of the Contemporary Arts Museum in Circuit Makati and the Lakeside Retail and Santa Rosa Civic Center in Nuvali. The opening of Phase 1 of Ayala Malls Arca South, launching 3 new green logistics park and a relaunching of Arillo as a leisure estate anchored by a new hotel. Introducing Laurian, a premier development in the heart of Makati CBD in the second half of the year and growing our bottom line at 2x GDP. As always, thank you for your trust and your continued support. We are energized with what lies ahead, and we continue to deliver sustainable long-term value for all our stakeholders. Again, a summary of my key messages. Our diversified property development portfolio continues to be our anchor. We made a strategic decision to accelerate renovations of our leasing assets in order to enhance customer experience, strengthen brand equity and solidify merchant partnerships. Our long-term investments in estates remain our core strategy. And even as we invest in the future, we continue to deliver shareholder value today. Looking ahead, we are confident in the strength of our portfolio, our strategies to navigate short-term volatility and capitalize on long-term growth opportunities. Thank you.

Thank you, Meean. We will now proceed with the Q&A session. [Operator Instructions] We'll begin with taking questions from the floor. Carl?

I'd just like to ask on the residential segment first, if your views have changed since the last briefing. So at least in the first quarter, it looks like on a year-on-year basis, vertical sales are down, Metro Manila sales are down and core sales are down. Does this make you change your views on the residential segment?

I think we have to make our decisions based on both our performance as well as what is happening in the industry. And if we are seeing some industry -- some inventory overhang in particular segments or particular markets, then clearly, we will try to pivot and avoid that. For the core, in particular, we've just become more cautious, I think, based not so much on our inventory levels, but on industry-wide inventory levels and we'll focus mostly on horizontal developments. There are still some pockets of opportunities in Metro Manila for the core, which we feel we are well positioned to take advantage of, but we will be very deliberate when it comes to launching vertical projects in Metro Manila.

On the EBIT margin improvement, I'll check if -- was this mostly due to mix? For instance, commercial lots are a higher-margin business? Or is it because of margin improvements per category?

Yes, it's primarily mix given that we sold a lot of horizontal. So clearly, commercial lots, industrial lots carry higher margins. Same with the horizontal subdivisions wherein our GP margins, they are higher than vertical.

And finally, one of [ Jelline's ] typical questions this time. Could I ask for the sales value of your unsold inventory and perhaps, if possible, a breakdown between Metro Manila/outside or vertical/horizontal, core/premium?

Roughly about PHP 200 billion. The breakdown in terms of location; 55% Metro Manila, 45% areas outside of Metro Manila.

Any other questions from the floor?

This is Raffy from Maybank Securities. I just wanted to know more color on the malls segment's revenues. It was only up by 4%. But I guess if you exclude the renovations, I think as Ms. Meean mentioned, it's around 11%. Is same mall stores growth still the same as last year? Or is it better?

So I think our CEO also mentioned that our overall merchant sales grew 12%. And I think it's worth mentioning that as -- repeating, as mentioned by our CEO, ex of the 3 assets under renovation, revenues grew 11%, but actually for our flagship and premium malls, it grew 14%.

Okay. And for the -- again, going back to the improvement in EBIT margin, is this a sustainable level? Or do you think it will gradually revert back to how it is in the succeeding quarters?

The sustainable level, and our target is to maintain EBIT margins between 30% to 35%.

Jelline from JPMorgan. I have a question or a follow-up on the presales guidance. I recall last quarter, you were mentioning around 12% growth target for the year. Is this something that you would want to pursue still all considered? And any changes on the launch target in terms of numerical target?

We're really looking at this, Jelline, as a portfolio. So it's a property development target for us. So it would include commercial and industrial lots in our forecast. Sorry, what was the second question?

The launch target.

The launch target. So I think the guidance we gave last year was PHP 80 billion and PHP 20 billion, PHP 80 billion for residential and PHP 20 billion for commercial lots. We will assess. I think what we've decided internally is to -- for one, to prioritize our horizontal launches, which is probably half of what we planned anyway. And number two, if we were to launch Metro Manila, we would be very deliberate, particularly in the core market. So while we are ready to launch, we'll need to see where inventory levels are industry-wide. But we're ready with PHP 80 billion and PHP 20 billion of residential and commercial, respectively.

And on the malls business, I understand that there was a decision to accelerate the renovations. What's the thinking behind there? And if we just look at the numbers, 4% for the portfolio, 11% for those, excluding the 3 malls, which would imply that the 3 malls was down around 10%, if my math is -- yes, the 4 malls would be down around 10%, simplistically math basis. How should we think about that?

So I think a couple of things. Firstly, we're very excited by the momentum we've seen in terms of the merchant replacement program that our CEO has mentioned previously. I think I'm at liberty to share that based on the GLA that we've replaced as part of these renovations, we've seen a 3.6x increase in sales and over 50% increase in rent. And I think the thought is, obviously, there's the physical part of the renovation, but there's also kind of the merchant mix within the mall. And we feel we're in a position to make that space higher yielding and more productive. And so things should normalize as we expect that for Trinoma and Cebu, we'll be able to reopen with it by the third quarter of this year and for Glorietta to follow early next year.

And then third, my question is on the share buyback. Well, we've bought back quite a bit in the first quarter. Is there an intention or move to increase the remaining budget? And if that would be the case, what would be the precursor to that?

We have more than enough in the overall approval. But for this year, it's -- we think we'll probably follow what we did last year, wherein in terms of return of capital to our shareholders, we did a 30% payout ratio for dividends and a similar amount, a similar absolute amount would go to buybacks. So dividends this year is probably we're looking at about PHP 8 billion, PHP 8.5 billion. So roughly a similar amount for share buybacks.

We also have a couple of questions via chat box. Number one, on industrials. This is from [indiscernible] of Metrobank. On industrials, can you provide the lease rates for the warehouse business? Who are the key logistics players in the Philippines? Is this mostly Air21?

For dry warehouse...

Dry warehouse.

Roughly about a little under PHP 200 per square meter today. For cold storage, what? 1.5 per pallet, yes, but on the per square meter. PHP 1,500 per pallet position per month.

Some follow-up questions. What kind of scale or ramp-up are you looking at for this segment? And in terms of cold storage, what kind of goods mostly pass through your warehouse?

I'll have Robert -- maybe Robert can answer that, who heads our industrial.

Our clients spans from third-party logistic providers and own use. So we have [ Safexpress ]. We have ice cream manufacturers and Coca-Cola and some pharmaceutical companies. We have 31,000 pallet positions currently right now. And we're -- there's an ongoing 35,000 pallet positions that's targeted to be completed next year.

Some questions for malls as well. How much of the 4% increase in mall revenues came from occupancy growth or adjustment in occupancy costs?

Yes. So our occupancy is relatively flat, and we mentioned that there was a 12% growth in sales. So it's really growth in sales that trickles down to a growth in our rent.

What's the time line on finishing the renovations? And what percentage of GFA is still unproductive?

So I think our commitment to management -- so about -- maybe to start, 350,000 square meters of our GLA is currently under some version of renovation. It doesn't mean that all the stores are closed. Our commitment to management is that no more than 30,000 square meters per year would be affected by the merchant replacement program or the renovation. So we use that as our cap. And we use that to kind of drive our strategy for the merchant replacement. Timing, Trinoma and Cebu, we are looking to open ahead of schedule by the third quarter of this year and Glorietta within the first half of next year.

And lastly, what are the consumer trends that you've seen in terms of tenants?

So I think we were surprised and also not surprised to see that kind of home as a category grew significantly year-on-year, I think, over 60%. And maybe that's supported by the fact that we had -- we opened the largest Muji in the country, 2,400 square meters. I think it's the only -- the second flagship outside of Singapore, and it's been received very, very well. Essentials also grew, and I think that's supported by the fact that we opened 14,000 square meter Landers in Vermosa as well. Food continues to grow, which is less surprising.

Thanks, Mariana. We also have a couple of questions from Danielo Picache of AB Cap. Number one, do you have any deal target for inventory life? Has there been any changes to payment schemes offered to buyers to further improve sales velocity?

On inventory levels, it's improved to around less than 22 months. And -- what's the next question?

Has there been any changes to payment schemes offered to buyers to improve velocity of sales?

For the core market, we continue to be agile and adjust accordingly. We do not operate in a vacuum, so it would be in a location basis. For the premium segment for horizontal, we're pretty much the same. And then for certain condos, we are 6 to 12 months longer in terms of payment schemes.

Thanks, Mike. We also...

6 to 12 months longer versus pre-COVID.

Versus pre-COVID, yes.

Thanks, Mike. We have one on office. I noticed office revenues declined by 16% on a quarter-on-quarter basis despite only a slight change in occupancy. And as you mentioned, some lease escalation. What could have caused this?

We have started to see -- I think -- well, I think it's worth repeating that again, our vacancy is significantly lower than the market. So we're at 10% versus the market at 20%. We have started to see some kind of natural reversions on the leases that we're renewing. Though that being said, I think we have about 9% of our GLA for renewal this year and already 61% are renewed and another 31% under negotiation.

Any other questions from the floor? Okay. We have one more question online. For residential, can you share the cancellation rates by segment, premium versus core? And what measures are being taken to sustain the improving buyer quality?

So the cancellation that we usually communicate is a cancellation value as a percent of our sales value. So I've mentioned earlier that I think we're down to -- we're stable with about 8%. So when we started reporting this, I think we were at about 12%, above 10%. So that's become down through the quarters, but we're stabilizing at about 8%. The second one was cancellation on...

Yes. What measures are being taken to sustain the improvement in terms of buyer quality?

I think this is where we had to be stricter on the upfront. So I think the reservation values have increased. We're also faster in terms of recognizing the cancellations if it's not going to push through because it's really so much more difficult to do this towards the end of the life of the transaction. So I think one of the things that we've decided on is to put in more sort of gates or mechanisms to screen really whether the buyers can afford the units being acquired.

No further questions online. Any last -- okay. Please go ahead.

I am Paul from BPI Securities. I have 2 questions. So my first question is on the residential segment. You've mentioned earlier that you have, if I'm not mistaken, PHP 200 billion worth of inventory. How much of this total inventory are RFOs? And what are the initiatives being made by Ayala Land in order to attract demand into these RFOs?

About 13% is RFOs. That's slightly higher than last quarter because we've had some completions towards the beginning of this year. And the second question was...

What initiatives are being done in order to attract demand for these RFOs?

I think similar to some of what other industry players are doing, we have special promos from the RFOs, but -- for the RFOs, but we do it on a -- really on a case-to-case basis. If a project is particularly challenged or if it's in a location where there's a lot of competition, then we would bring down the down payment rates or allow for early turnover of the buyers to encourage the take-up. But that happens quite on a selective basis, not for all types of projects.

Another follow-up on that question. Can you give a split between -- on the RFOs between core and premium?

About equal. Equal split between premium and core.

My last question is on the hospitality segment. You've mentioned earlier that you currently have 4 hotel renovations, 3 of them were fully closed, if I'm not mistaken, for renovations. Can you provide the time line upon -- for the completion of these hotel renovations?

Yes. So we're looking to reopen Abreeza and Cagayan de Oro, those are both [ set as ] within the third quarter and Lagen Resort as well within the third quarter. Holiday Inn is the fourth, and we are phasing the renovation. We've already begun with some of the rooms.

Any final questions from the floor? Okay. That concludes our briefing on Ayala Land's performance for the first quarter of 2025. If you have any further questions, please feel free to reach out to us at [email protected]. A recording of this briefing will also be made available on our website, ir.ayalaland.com.ph. Once again, thank you all for joining us this afternoon. Light refreshments are available at the back. Please help yourselves. We truly appreciate your time today.