Ayala-Land-Annual-Report
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With many years of experience, we have gained key learnings that enabled us to strengthen our capabilities and hone our craft to be a premier builder of large-scale, integrated, mixed-use, sustainable estates. With each estate, we open opportunities for growth and a better quality of life. As we grow our footprint across the country, we widen our reach to more Filipinos and help reshape the landscape for more progress. THIS IS HOW WE ARE RESHAPING THE LANDSCAPE THE 2016 INTEGRATED ANNUAL AND SUSTAINABILITY REPORT 2016 THEME ABOUT THIS REPORT HOW WE ARE RESHAPING We continue to enhance our reporting On Corporate Governance, we present THE LANDSCAPE standards by adopting Integrated our practices based on metrics defined Reporting based on the International by the ASEAN Corporate Governance This year’s annual report is focused Integrated Reporting (IR) framework Scorecard (ACGS) to provide on “How We Are Reshaping the developed by the International shareholders with an organized and Landscape”. Here we have outlined the Integrated Reporting Council (IIRC). detailed reference that is aligned and critical milestones that support the 20- consistent with ASEAN standards. 20-40 plan -- a corporate goal defined In line with this initiative, there will in 2014 which means achieving P40 be no separate Sustainability Report. The sustainability indicators in this billion in net income by year 2020 All sustainability performance integrated report were externally through a more balanced contribution indicators will be included in this assured by DNV-GL using the DNV- from property development and integrated annual and sustainability GL Report Verification Protocol commercial leasing. As we move report, following the standards of the (VeriSustain), covering economic, forward with this goal in mind, we Global Reporting Initiative (GRI) G4 environmental, governance and social will continue to build on our strong Sustainability Reporting Guidelines indicators. track record as a leading developer “In Accordance” with its Core option. of large-scale, integrated, mixed-use, An electronic copy of this report is sustainable estates in the Philippines. The sustainability indicators cover available on our website Ayala Land’s units involved in project ir.ayalaland.com.ph. Our cover photo reflects the development and commercial leasing development in Nuvali, an estate operations. Except for employee More information on the material which we started to develop and data, indicators do not include sustainability data is available at was launched in 2006. Nuvali is a operations of subsidiaries that provide www.ayalaland.com.ph/sustainability. prime example of how our company support services, and new business (G4-15, G4-28, G4-32, G4-33) reshapes the landscape of the city of units such as QualiMed, AirSwift, Sta. Rosa and its development has FamilyMart, and Merkado Supermarket. BASIS OF PRESENTATION created a strong positive impact to The specific boundary and business the growing community and local units to which certain performance We have discussed in this report the economy of Laguna and neighboring indicators are most material and financial and sustainability indicators municipalities. Nuvali has spurred applicable is specified in the GRI that materially affect our ability to create urban development and has evolved Content Index. This report covers value and execute our plans to achieve to become a dynamic sustainable performance data from our operations sustainable growth. The process of community. in the Philippines from January 1 to identifying the materiality of these December 31, 2016. indicators is a major component of Ayala Land’s strategic planning and management process which includes identifying risks and opportunities and engaging stakeholders for consultations and feedback. (G4-18) TABLE OF CONTENTS 6 8 OUR INTEGRATED PERFORMANCE BUSINESS MODEL HIGHLIGHTS 10 14 20 CHAIRMAN’S PRESIDENT’S CHIEF FINANCE MESSAGE REPORT OFFICER’S REPORT 24 46 BUSINESS SUSTAINABILTY REVIEW REPORT 58 136 CORPORATE FINANCIAL GOVERNANCE REVIEW OUR VISION ENHANCING LAND AND ENRICHING LIVES FOR MORE PEOPLE OUR COMPANY Ayala Land is the largest property developer in the Philippines with a solid track record in developing large-scale, integrated, mixed-use, sustainable estates that are now thriving economic centers in their respective regions. Following the success of the Makati Central Business District (Makati CBD), Ayala Alabang, Cebu Park District, Bonifacio Global City (BGC), and Nuvali, we continue to increase our footprint by building estates that benefit more people. With 9,852 hectares of land bank, 20 estates, and presence in 55 growth centers across the country, we offer a balanced and complementary mix of residential spaces, shopping centers, offices, hotels and resorts, and other businesses. We pioneer standards and practices that reflect the value we place on sustainability in all our developments. We shall be a responsible corporate citizen and act with integrity, foresight, and prudence. We shall empower our employees to deliver products that exceed our customers’ expectations and build long-term value for our shareholders. CORE VALUES At Ayala Land, we value leadership, integrity, vision, excellence and malasakit. (G4-3, G4-6, G4-8, G4-9, G4-56) View from Sicogon Island Tourism Estate, Iloilo HOW WE CREATE VALUE (G4-9) OUR INTEGRATED BUSINESS MODEL THE CAPITALS AYALA LAND, WITH ITS STRATEGIC LAND BANK, DIVERSIFIED PRODUCT LINES, AND SOLID TRACK RECORD IN DEVELOPING INTEGRATED, MIXED-USE, SUSTAINABLE ESTATES, IS UNIQUELY POSITIONED TO SEIZE GROWTH OPPORTUNITIES IN THE PHILIPPINE PROPERTY SECTOR. NATURAL INTELLECTUAL MANUFACTURED STRATEGIC SOLID-TRACK RECORD OF BUILDING DIVERSIFIED LAND BANK LARGE-SCALE, INTEGRATED, PRODUCT LINES MIXED-USE ESTATES Our developable land bank is strategically- Our unique master planning process We have a wide range of products located in key growth centers integrates our product lines to create that cater to all markets and for immediate and long-term sustainable and vibrant communities segments of the property sector. development. and foster urban development. ESTATE DEVELOPMENT PROPERTY DEVELOPMENT OUR BUSINESS We develop estates that host our property We offer and build residential, office for sale, and commercial OPERATIONS development and commercial leasing products that address various market segments represented products. through our five brands, Ayala Land Premier, Alveo, Avida, Amaia, and Bellavita. THE OUTPUTS WE MADE SIGNIFICANT PROGRESS IN 2016, LAYING THE GROUNDWORK TO DELIVER LONG-TERM, SUSTAINABLE GROWTH BASED ON OUR 2020-40 PLAN. • Total of 9,852 hectares of developable • Added two (2) more estates in 2016: • Property Development: Completed land bank. Gatewalk Central, Cebu and Sicogon Island and turned-over 5,775 residential units • Saved P42 million and avoided Resort, Iloilo • Malls: completed 173 thousand sqm 1,336.6 tons of GHG emissions • Total of 20 estates across the Philippines. of GLA to a total of 1.62 million through energy efficiency initiatives • Additional dedicated walkways in BGC and • Offices: completed 121 thousand sqm • Undertook measures to protect Makati CBD of GLA to a total of 836 thousand 34 threathened animal species in • Additional 50k sqm of open space • Resorts: opened 36 rooms to a total our leisure developments. of 2,027 rooms in operation THE OUTCOMES THE RESULT OF OUR OPERATIONS HAVE PROVIDED MORE VALUE FOR OUR SHAREHOLDERS, EMPLOYEES, COMMUNITIES AND VARIOUS STAKEHOLDERS We protect Philippine biodiversity and We provide spaces that are site We provide homes and venues for ecosystem services within our land bank. resilient, pedestrian-friendly, business and leisure that support public-transport connected and the community and catalyze local eco-efficient, uplifting living economic growth. standards for Filipinos. We carefully manage our capitals and use them prudently as inputs to our business operations so we can grow the business further and achieve long-term and sustainable growth. With new estates and products we offer to the market, we create more value for our shareholders, employees, communities and various stakeholders. FINANCIAL SOCIAL HUMAN STRONG HIGHLY-TRUSTED DECENTRALIZED BALANCE SHEET BRAND ORGANIZATION We ensure the quality of our Our decentralized structure We have a strong balance sheet products and services and uphold empowers our people, and to support our growth plans and strict sustainability and corporate provides the flexibility to a prudent fiscal policy to maintain governance practices for our execute our strategy in a fast the strength of our financial customers and stakeholders and efficient manner. position. COMMERCIAL LEASING CONSTRUCTION AND OTHER BUSINESSES We develop and operate Malls, Offices, and Hotels PROPERTY MANAGEMENT We hold investments in selected companies and Resorts across the Philippines represented by We develop our projects through our own construction that complement our core businesses like Ayala Malls, Ayala Land Offices, branded Hotel formats, company, Makati Development Corp., and manage Cebu Holdings, Inc., Ortigas and Company, SEDA hotels and El Nido, Lio, and Sicogon Resorts. the completed properties through our own property Prime Orion Philippines, Inc., MCT Bhd, management company, Ayala Property Management and other ventures in Healthcare and Retail. Corp., to ensure quality throughout the entire project life. • Sustained market leadership in the • Employs a total workforce of 4,369 direct • Net Income of P20