Real estate giant Ayala Land Inc. will spend P7.2 billion for the redevelopment of its Glorietta commercial center in Makati to include the construction of additional office space and one four-star businessman's hotel.

At the sidelines of the firm’s annual stockholders meeting yesterday, ALI officials said the company is embarking on a “significant development” on its strategic landbank to prepare for the market's eventual resurgence.

“(There are) a lot of planning put in place... (to ride on) the resurgence of the market in time,” said in-coming ALI president Antonio Aquino.

ALI has allocated P2.96 billion as capital expenditures on its strategic landbank management for this year, slightly higher compared to the P2.84 billion capex spent in 2008.

Of the amount, a portion would be spent for the initial groundwork to prepare the sites in the Ayala Avenue quadrant for development.

ALI mall group head Ma. Victorian Anonuevo said the clearing and excavation of site has been scheduled but the actual launch of the project is slated sometime towards the end of the year.

She said that, by 2011, a new facade in Glorietta 1 and Glorietta 2 will be unveiled adding that ALI is still in talks with an international hotel brand that will operate the hotel that will be open in October 2012. The hotel development is seen to cost P2.5 billion.

Ayala Land meanwhile is “pleasantly surprised” with the company's performance for the first quarter as sales appear to be “tracking” last year's and holding off the drag of a slowing economy.

While experiencing a drag, the middle income and affordable sector is supporting the resiliency for the whole.

The over-all income, however, will be lower compared to the previous year due to the lack of one-time gains this year compared to those booked in 2008 from the sale of assets.

The firm said cancellations had experienced “an increase, particularly in the high-end market.”

“What we are seeing is that the residential sector has been affected by the global crisis. A lot of people had been affected by the uncertainty in the market. We are now focusing on how people should buy... so we are seeing an increase in sales in affordable product. We are still positive. We see a little bit of flight to quality,” said outgoing ALI president Jaime Ayala.