8990 Holdings to launch 7 projects in 2nd half

MASS HOUSING developer 8990 Holdings, Inc. remains on track to launching seven more projects toward the yearend, with the addition of malls and offices to future developments being considered on a case-to-case basis.

The listed company is proceeding with the launch of 14 projects worth P6.80 billion this year despite some delays arising from the leadership transition in government, its President and Chief Executive Officer Januario Jesus B. Atencio III said in an Aug. 22 interview in Mandaluyong City.

“There’s some delay because of the election and, therefore, the government is in transition, but for the most part in the level of the local government, the transition has been done and so we’re able to move again as fast as we expect towards the launching of these projects,” Mr. Atencio said.

8990 Holdings only managed to launch four projects within the six months to June. The pace then accelerated with the unveiling of three developments in July alone.

“For this quarter, we want to launch four [more] so that in the fourth quarter, there will be three projects left to launch and these will be all in Davao City,” Mr. Atencio said, while six projects are completed.

Accordingly, the company continues to target a 36% increase in net income to around P5.5 billion from gross revenues totaling about P12 billion or 24% over the P9.65 billion registered in 2015.

“This is a transition year for 8990 because I will be finishing with six projects but I’ll be launching 14 new ones,” Mr. Atencio said. “Because 8990 is in transition, we expect that half of our performance for this year will come in the fourth quarter when we finally launch all the 14 projects.”

8990 Holdings expects a sustained demand amid the 5.7-million backlog in the affordable segment of the residential market.

“We are in a kind of market niche that doesn’t really need to create or invent a market. The market is already there; all we need to do is to make sure that ordinary middle-class Filipino families can very well afford and can very well access our products and housing finance,” Mr. Atencio added.

In addition to the 14 new projects, 8990 Holdings has started building 13 condominiums offering 13,000 units in aggregate within an 8.4-hectare property in Tondo, Manila. Three buildings are slated for completion within the first half of 2017.

The company is looking to start developing a bigger estate along Ortigas Avenue Extension in Pasig City within the first three months of 2017. The project will have at least 23 residential buildings with more than 23,000 units.

“We think that we can finish the Tondo project in about five years and we expect that when we launch the Ortigas Avenue Extension project next year, it will take us seven years to finish 23,000 housing units,” Mr. Atencio said.

8990 Holdings is effectively foraying into commercial real estate development for the condominium projects in the cities of Manila and Pasig.

The condominium complexes will have shopping malls, each spanning 30,000 square feet and requiring investments totaling P300 million to P400 million. The company initially wanted a partner that will manage the malls.

“Actually we found one and we lost him along the way. But as I was saying, maybe this is an opportunity for us to actually manage our own mall, so that we can somehow manage it in the way we think it ought to be run, which is a valuable conduit or valuable magnet so that our buyers can actually be delighted living in our condominium,” Mr. Atencio noted.

8990 Holdings is currently talking to supermarket and department store operators, with the list of prospective locators down to two.

“We expect to finalize it this year because we need to build the mall next year. We want to finalize the main locators so that they can help us design the mall in a way that they can also maximize their presence and so we’ll go with the locators first,” Mr. Atencio said.

8990 Holdings is looking into allocating a space for small and medium enterprises in the proposed shopping malls.

“What we think will make the mall distinctive is that we’re thinking of, subject to feasibility and the number of businessmen who actually want to go into this, will be a second floor for small and medium-scale enterprises and so we think that the mall can also help small and medium-scale businessmen to actually come into and have a mall presence on their own,” Mr. Atencio said.

Moving forward, the company will evaluate plans of developing shopping malls against the size and location of each project, with Mr. Atencio noting that “we’re not going to the mall business, that’s for sure.”

“If you have a condominium project that would have, in our case, 13,000 homeowners and their families and another 23,000 homeowners and their families, the only amenity to our mind that will be acceptable to everybody is the mall,” Mr. Atencio said.

“So, we’re using the mall as a strategic way by which we can motivate the sales portion but at the same time address the certain needs that this market looks for in terms of accessibility to retail and to services that only a mall can provide,” he added.

8990 Holdings will consider developing office spaces also on a case-to-case basis, as the company remains focused on serving the country’s mass housing market.

“Just like malls, if ever we will enter into office leasing, it is because we are in a certain type of location where we feel confident that the market is looking for that kind of property development. It won’t be in the template, it will be on a case-to-case basis,” Mr. Atencio said.

Shares in 8990 Holdings ended five centavos or 0.63% lower at P7.58 apiece on the Philippine Stock Exchange on Friday.