Ayala Land Inc. (ALI) booked a net income of P11.5 billion in the first half of the year, supported by growth in its leasing and hospitality businesses despite challenges in the operating environment.

The property giant reported on Monday that revenues from January to June clocked in at P75 billion. In the second quarter alone, ALI recorded a topline of P37.5 billion and net income of P6.1 billion, with profit rising 13 percent from the previous quarter.

ALI’s leasing and hospitality businesses generated P25.2 billion in first-half revenues, up 9 percent year-on-year, as all asset classes posted positive contributions.

Shopping center revenues rose 4 percent to P12 billion, driven by higher occupancy, increased foot traffic, growing merchant sales and early returns from completed reinvention works across flagship malls.

Hospitality revenues jumped 28 percent to P6.3 billion on the strong performance of renovated facilities and the contribution of New World Makati Hotel.

The company’s offices segment, meanwhile, generated P6 billion in revenues on above-industry occupancy rates and contracted escalations from existing leases.

Industrial real estate revenues increased 15 percent to P879 million, supported by solid occupancy across dry warehouse and cold storage facilities.

Property development remained ALI’s largest revenue contributor, generating P41 billion in the first half. Second-quarter property development revenues reached P20.6 billion, stable compared with the first quarter.

Sales reservations stood at P53.5 billion during the six-month period as the company maintained disciplined inventory management.

ALI said it remains on track with deliveries across 40 projects, with close to 6,000 residential units turned over to date. Residential inventory improved to 15 months from 18 months in the first quarter.

“We are building a more resilient Ayala Land through disciplined capital allocation, a growing recurring income base, and a strong balance sheet,” said Anna Ma. Margarita Bautista-Dy.

“Supported by our integrated estate model and diversified platforms, we are confident in Ayala Land’s ability to deliver sustainable growth and remain well positioned for the opportunities ahead.”

ALI is also moving to expand AREIT Inc. as part of its strategy to recycle capital and grow its recurring-income portfolio.

The company’s board approved the infusion of four malls and three hotels into AREIT with an aggregate value of P20 billion.

The planned infusion is expected to increase AREIT’s assets under management to P179 billion while further diversifying its portfolio across malls, offices, hotels and industrial land.

ALI said cash proceeds from AREIT infusions are being redeployed to fund its pipeline of leasing and hospitality assets, helping accelerate the expansion of its recurring-income businesses.

Meanwhile, ALI kept a tight rein on spending, with capital expenditures reaching P39.5 billion in the first half, down 2 percent from a year earlier.

Capital spending for its leasing businesses, however, increased 17 percent to P13.2 billion as the company funded the completion and ramp-up of key recurring-income assets.