Mass housing expert 8990 finds new market in affluent customers
After establishing itself as a leading player in mass housing, 8990 Holdings plans to diversify to higher-end residential property development to unlock values from its landbank in areas suitable for the affluent market.
This diversification is seen in line with 8990 Holdings’ plan to double its revenues to P20 billion by 2020 from 2017 levels while net income margins are targeted to be maintained at a minimum 37.5 percent.
This goal suggests 8990 Holdings aimed to grow its net profit to around P7.5 billion by 2020, double its P3.57 billion in 2017.
“We’re not going to limit our business to the affordable business. Eventually, we want to serve all markets. There are opportunities. There are lands that we have acquired that we won’t make the most out of if we sell as low-cost (housing),” 8990 Holdings president Willie Uy said in a recent interview.
“So we’re looking at finding a way to expand it. We’ve done it by bringing in people. We are confident that they can handle selling residential property from low to high-end segments,” Uy said.
8990 Holdings has been focusing on “affordable” housing or typically the units that are priced at P2 million or below.
“We want to go high-end but not really high—not really the likes of Ayala Land Premier but something close to that,” Uy said.
Uy added 8990 Holdings could soon start serving the residential segment at a price range of at least P200,000 per square meter.
Catering to all market segments is likewise the vision behind the group’s new hospitality unit, 8990 Leisure, which draws from its experience in profitably running tourism-focused time-sharing hospitality brand Azalea in Baguio and Boracay.
Operations of Azalea will be separate from that of 8990 Leisure.
Eventually, 8990 Holdings wants to derive around 20 percent of its revenues from recurring businesses, like the hospitality space.
8990 Holdings chalked up a record-high nine-month net profit of P3.4 billion, 38 percent higher year-on-year on brisk housing sales.
Total revenues were up by more than 41 percent year-on-year to P8.6 billion in the nine months to September.
For the full year, 8990 expects revenues to reach P11.5 billion, further rising to P13 billion next year.
“We’re not trying to get away from the image of 8990 as a low-cost housing provider. We’re just saying that with our experience in Boracay and Baguio, we realize we have a talent for this,” 8990 Holdings chair Mariano Martinez Jr. said. —DORIS DUMLAO-ABADILLA
