• The decision to cancel or pause projects reflects different risk profiles based on project stage and sales traction.
• The drop in residential sales is being driven more by weaker bookings.
• New project launches are being held back, with management waiting for clearer pricing and cost visibility before restarting.
Real estate giant Ayala Land’s decision to pull back a couple of its high-profile projects a few weeks ago caught the market by surprise.
Observers knew real estate was slowing, with signs already showing up in 2025 even in the more resilient high-end segments.
But pausing Laurean Residences in the heart of the Makati central business district and the cancellation of The Heights Katipunan project in Quezon City—one of the most anticipated mid-market offerings in years—sent an unprecedented negative signal.
This also led to varying interpretations about the company’s financial health. Ayala Land moved to quell concerns, pointing to its strong balance sheet and considerable financial buffers to absorb shocks from the US-Iran war.
But the builder’s weaker first-quarter figures confirm the changing reality for a company that’s often considered a bellwether for the sector.
Why was Laurean paused but The Heights Katipunan shut down?
These decisions are not made lightly since real estate projects typically require months or years of planning.
Ayala Land president and CEO Anna Ma. Margarita “Meean” Dy said they had to move quickly, considering the rapid impact the war was having on confidence.
“Katipunan was launched just a few weeks before the war actually erupted. So we were in a much earlier phase of the selling period. So that one we cancelled,” Dy said during a briefing with analysts on Thursday.
Laurean was launched in September 2025, well before the war but in the middle of the sweeping flood control scandal that was making buyers jittery.
Reports at the time also suggested Ayala Land was offering larger discounts for cash buyers, helping Laurean achieve P10.4 billion in sales as of February 2026.
Dy said all selling and development activities for Laurean are “on hold for now” and reservation sales related to the project were removed from its first quarter financials.
“We will revisit it at maybe at some point when the environment is clearer. We’re thinking maybe middle of next year is when we will take a look at it again,” she added.
Rising costs affect project viability
Pushing ahead with these projects would expose Ayala Land to double risk, facing weaker sales and a rising cost environment.
Dy explained a large part of their existing pipeline is in the latter stages of construction, making them less affected by increasing material and construction costs.
This is why the developer is committed to delivering 13,000 residential units across 40 projects to buyers in 2026.
“It’s because we are in the later stages of construction,” Dy said.
But Laurean and The Heights Katipunan were still getting off the ground, meaning cost and earnings assumptions no longer held true as the war triggered global price shocks.
“I think where we would see more significant or meaningful impact are in projects that we are about to start,” Dy said on Thursday.
She said the Philippine Constructors Association estimated costs to rise 10–30 percent—large enough to hurt margins and the viability of these projects.
Writing off growth in 2026?
Ayala Land’s profit dropped 23 percent while management decided to cut the 2026 capital spending budget by nearly half to P50 billion.
Total revenues were down 14 percent because of weak residential sales.
Breaking this down, sales in the upscale market fell 20 percent while more affordable projects known as “core” sales declined 26 percent compared to the first quarter of 2025.
These were clear warning signs that pushed management to rethink its pipeline and act fast.
What’s next?
The developer announced its pivot to leasing and hotels, which grew 12 percent during the first quarter, offering a bright spot.
Weaker residential sales mean ALI is likely to hold off on new residential launches this year.
In fact, the builder did not launch any new residential project in the first quarter of 2026.
It managed to book about P28.2 billion in overall sales. This is lower by 22 percent over the same period last year, but this also suggests there was still demand even if subdued.
For the rest of the year, Dy said they will avoid new condominium project launches but an opportunity to sell horizontal might open up in the second half.
“We’re looking at horizontal launches on the second half of the year. That’s maybe one segment that we will review, but we’d like to have the second quarter to assess that,” she said.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
