KHAZ­ANAH’S PLAY

The Peak (Hong Kong) - - Portfolio • Property -

In its maiden in­vest­ment in the Philip­pines, Malaysia's sov­er­eign wealth fund Khaz­anah Na­sional Ber­had chose to put its money in 8990 Hold­ings, a listed mass hous­ing de­vel­oper whose com­pany name was in­spired by a Nokia cell­phone model.

There is a lot go­ing on for 8990 that could have played a part in Khaz­anah's de­ci­sion to ac­quire 8 per cent of the de­vel­oper in 2014 and be a cor­ner­stone in­vestor.

First, is the huge un­met hous­ing de­mand in the Philip­pines, par­tic­u­larly in the low-cost seg­ment.

The to­tal hous­ing need to ease the back­log – al­ready at 5.9 mil­lion house­holds in 2015 – is ex­pected to reach 10.5 mil­lion house­holds by 2030, with an ad­di­tional 4.6 mil­lion houses needed from 2016 to 2030 alone, ac­cord­ing to the Sub­di­vi­sion and Hous­ing De­vel­op­ers As­so­ci­a­tion. To elim­i­nate the to­tal back­log, an es­ti­mated 800,000 houses will need to be built an­nu­ally un­til 2030.

“We see our­selves as a pure play in the Philip­pine af­ford­able hous­ing mar­ket. This is be­cause un­like other de­vel­op­ers we only cater to low to mid in­come earn­ers, we do not sell homes that are priced higher than 2 mil­lion pe­sos (HK$300,989) and more than 90 per cent of our rev­enues come from the sale of our low cost res­i­den­tial de­vel­op­ments,” says Wilibaldo Uy, 8990 Hold­ings pres­i­dent and CEO.

Then there's Manila's push to move de­vel­op­ment and progress out­side the con­fines of the tra­di­tional ur­ban cen­ters of com­merce, says Justino Calay­cay, head of re­search and en­gage­ment at Phil­stocks Fi­nan­cial, Inc.

“The cur­rent back­log in hous­ing (af­ford­able seg­ment) is ex­pected to re­main wide if not widen even more as long as plans re­main on track. In par­tic­u­lar (8990's) mod­u­lar build sys­tem al­lows it to put up units in the least time, putting it at the front­lines of the sup­ply ‘war', “says Calay­cay.

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