Waltermart backs out of deal with 8990
MASS HOUSING developer 8990 Holdings, Inc. is mulling its options after the Waltermart Group scrapped a deal to operate malls within the former’s integrated mixed-use projects in Metro Manila.
8990 Holdings President Januario Jesus Gregorio B. Atencio told reporters on Tuesday the Waltermart Group has rescinded a joint venture agreement signed in April last year to run the mall component of its projects in Ortigas Avenue and Vitas, Tondo.
The two projects will adopt an integrated mall concept, featuring low-cost condominiums with a mall component. The retail area will offer 45,000 square meters (sqm) of gross floor area (GFA) at the 13-hectare ( ha) Ortigas development and 35,000 sqm of GFA at the 8-ha Tondo development.
“We are not looking, but we are open [to new partners],” Mr. Atencio said.
Waltermart is a joint venture between the Lim family and the SM Group, which bought into the former in 2013.
8990 Holdings is looking for a partner that can bring together a supermarket, department store and fast-food chains in its planned retail center, but it is likewise considering operating the mall component of the project.
“This may be providential because it now opens the opportunity for 8990 itself to go into mall operations,” Mr. Atencio said.
8990 Holdings’ plan to venture into mall development is part of a growing trend among property developers to increase recurring income to diversify their revenue stream, therefore providing bet- ter cushion in case the property cycle turns less favorable.
8990 Holdings registered a 23% growth year on year in net income to P4.05 billion, from P3.31 billion registered in 2014, alongside a 24% uptick in gross sales to P9.65 billion from P7.79 billion.
The property company attributed the higher profits to its “strong presence, brand acceptance, building innovation and track record of housing delivery in the growth centers of the country,” such as the National Capital Region, Angeles, Cebu, Iloilo and Davao.
For 2016, 8990 Holdings sees its net profit climbing a fifth to P4.8 billion, on the back of a 24% increase in revenues to P12 billion.
It is projecting an annual growth of 20% in a bid to double net profit and revenues by 2020.
8990 Holdings is set to launch 14 new projects that would add 75,608 units worth P7.3 billion to its inventory. The projects include horizontal developments under the Deca Homes brand in Bulacan, Iloilo, Cebu, Davao, and Bacolod as well as medium-rise building projects under the Urban Deca Homes in Cavite, Cebu, and Manila.
In addition to the new projects, the company has 11 ongoing projects would provide an additional 5,377 units worth P4.8 billion this year.
Shares in 8990 Holdings dropped 1.4% to close at P7.10 apiece on Wednesday.