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8990 Holdings eyes P70 B sales from low-cost housing

By Neil Jerome C. Morales (The Philippine Star) | Updated May 5, 2014 - 12:00am

MANILA, Philippines - Locally-listed property developer 8990 Holdings Inc. aims to sell nearly P70 billion worth of low-cost housing units nationwide in the next five years.

An aggressive rollout and construction program would ensure long-term growth in net income which would likely breach the P3-billion income level this year, its top executive said.

During an investors’ roadshow, 8990 Holdings company president and CEO Januario Jesus Atencio said the property firm has a pipeline of 18 projects totaling 64,405 housing units in 250 hectares of landbank.

“We have 18 projects, seven of which will start in 2014, nine in 2015 and the final two in 2018 and 2019,” Atencio said, adding that sales value of the low-cost housing units is estimated to reach P66 billion.

In particular, there would be five projects in Davao, three in Cebu, two in Cavite, five in the National Capital Region, two in Iloilo and one in Rizal, all of which would be targeted for completion in 2014-2020.

8990 Holdings intends to raise P8.96 billion by selling 1.379 billion shares at P6.50 apiece through a follow-on offering, including the 134.95 million overallotment shares to cater to strong demand.
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Bulk of the proceeds would be used to pay existing debts, with remaining funds allotted for landbanking and general working requirements.

“We feel the 250 hectares of landbank we have today will give us a window of three to four years. We want another 250 hectares so we can extend it to eight years,” Atencio said.

Under its masterplan, 8990 Holdings plans to expand into new areas like Bulacan and into high- and medium-rise developments in Metro Manila, increase its footprint in exiting project areas, and explore securitization and other housing financing models.

8990 Holdings is one of the country’s top mass housing developers, having sold more than 26,000 units from completed and ongoing projects. It operates through the Deca Homes brand for horizontal projects and Urban Homes brand for vertical projects.

For this year, 8990 Holdings is set to launch 8,600 to 9,000 residential units, which would allow the company to book P3.2 billion in net income, Atencio said.

Profits of 8990 Holdings jumped 28 percent to P2.18 billion last year from P1.7 billion in 2012, while revenues climbed nearly 40 percent to P5.35 billion from P3.83 billion.

“We also want to explore other avenues of housing finance like securitization,” Atencio said.

8990 Holdings hired SB Capital Investment Corp. as the underwriter for the P1-billion securitization of the company’s receivables.

“It’s the first private sector securitization of housing asset-backed securities in the country,” he said, adding that the company would offer to institutional buyers long-term securitized loans.

8990 Holdings’ follow-on offering secured the interest of two global long-term institutional investors, Khazanah Nasional Berhad and TPG Capital Pte. Ltd. that committed to invest a total of P2.9 billion during the bookbuilding process.

Since starting its mass housing business in 2003, 8990 Holdings has completed 11 projects in Luzon (Angeles, and Cavite Cities), Visayas (Cebu Province and Iloilo), and Mindanao (Tagum and Davao Cities). So far, 8990 Holdings is developing 15 projects in Cebu, Davao, Iloilo, Clark, Pampanga and other major hubs in the Philippines.

Apart from housing, 8990 Holdings is also in the business of resort and hotel development under the time share membership brand Azalea. It is also involved in the Deca Wake Board Park in Angeles and Davao.
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