Ayala Land Weighs Future of Dusit Thani Manila as Lease Nears 2027 Expiry

Lease Clock Ticking on Makati Landmark

Ayala Land Inc. is evaluating several options for the Dusit Thani Manila site as the land lease agreement for the five-star hotel approaches its end-of-2027 expiration. Anna Ma. Margarita Bautista-Dy, president and CEO of ALI, confirmed that discussions with the Thailand-based hospitality partner remain fluid, with no final resolution in place.

"Just like any partner, we are talking about different possibilities and at the moment there is no agreement yet," Bautista-Dy said. She characterized the negotiations as ongoing, with proposals moving in both directions between the two parties.

The property sits in Makati's central business district, one of Metro Manila's most valuable commercial corridors. Dusit Thani Manila operates more than 500 rooms and suites alongside multiple dining venues and event facilities. The hotel has anchored the site since 2008, when Thai hospitality group Dusit rebranded the property following its 1997 acquisition of Hotel Nikko Manila.

Multiple Scenarios Under Review

Jed Quimpo, ALI's chief financial officer, said the property developer's project team is assessing a range of scenarios for the site. The review encompasses potential lease extensions, redevelopment plans, and alternative uses for the prime real estate parcel.

"We're waiting for the project team to let us know what are the different options available to us, but right now it is continuing as is," Quimpo said. Operations at the hotel proceed without interruption while the strategic evaluation unfolds.

A representative from Dusit Thani Manila emphasized that Manila remains a priority market for the group. The company stated it is committed to sustaining an operational footprint in the Philippine hospitality sector, though it declined to provide specifics on the structure or timeline of any potential arrangement.

Strategic Stakes for Both Parties

The outcome carries significant implications for both organizations. For Ayala Land, the site represents a high-value asset in a district where land premiums have climbed steadily over the past decade. Mixed-use developments combining residential towers, office space, and retail have become the dominant model for similar parcels in Makati, offering higher returns than single-use hotel properties in many cases.

Dusit, meanwhile, entered the Philippine market nearly three decades ago and has positioned Manila as a key node in its Southeast Asian network. Withdrawing from the capital would leave a notable gap in the group's regional portfolio, particularly as tourism demand in the Philippines has recovered strongly following pandemic disruptions.

The 2027 deadline leaves roughly 16 months for the parties to finalize terms, secure regulatory approvals if needed, and execute any transition plan. Hotel industry observers note that lease renewals in prime urban locations have become more complex in recent years, with landlords increasingly seeking higher revenue shares or opting to redevelop properties entirely.

Neither party has disclosed the financial terms of the existing lease or the valuation parameters under discussion. The site's location near the Ayala Avenue corridor and proximity to the Makati central business district's office towers and shopping complexes make it one of the most scrutinized hospitality assets in Metro Manila.

Dusit Thani Manila continues to accept reservations through 2027, and hotel representatives indicated that guest services remain unaffected by the ongoing negotiations.