By Arra B. Francia
MASS HOUSING developer 8990 Holdings, Inc. will be spending about P10 billion in capital expenditures next year as it builds up its hospitality portfolio.
8990 Holdings Chief Financial Office Roan Buenaventura-Torregoza said the capex for 2019 will be higher than the P8 billion the company committed to spend this year.
“We’ll probably spend around P10 billion next year… We’ll spend around P1 billion for the hotel if we go aggressive there,” Ms. Buenaventura-Torregoza told reporters during a round table interview in Makati on Monday.
The listed real estate firm recently disclosed its plan to launch three to four leisure properties every year in the next five years through newly-formed subsidiary 8990 Leisure and Resorts. It will be spending P5 billion to develop three hotel brands, namely Adama, Kura, and Argo.
Ms. Buenaventura-Torregoza said the first hotel project will be an Adama resort in Siquijor. The resort will have 22 family villas and is set to be completed by the first quarter of 2020.
8990 Holdings’ capex will support its plan to launch around P50 billion worth of projects next year, including housing projects in Davao, Cebu, Iloilo, Bulacan, and Bacolod.
The company will also start selling residential units from its project in Ortigas Extension, which consists of 22 buildings with 14 to 17 storeys each. It is spending P15 billion to construct the project, which has an expected sales value of about P38 billion from the sale of around 19,000 units.
“At this point we already have a pile of reservations… there are a lot of inquiries from Chinese and Koreans looking at the buildings,” 8990 Holdings President and Chief Executive Officer Willibaldo J. Uy said in the same interview.
Prices of units at the Ortigas Extension project will start at around P2 million, or P70,000 per square meter.
Asked for the company’s outlook in 2019, Mr. Uy said they are tightening their belts in order to keep prices within reach of their target market.
“Now that inflation rate is starting to go up, we’re doing a lot of belt tightening… because I don’t want it to affect the selling price as much as possible. Our market is the affordable housing market, and I feel that we should not anymore add to their problems,” Mr. Uy explained.
“But that being said, we’re still looking at, I’m going to recommend to the board a 10% increase on our prices.”
Meanwhile, Mr. Uy noted 2018 is expected to be another banner year for the company, as it is on track to hit the P11.5-billion target for revenues by year-end. Its net income is expected to reach about 39% of total revenues, or P4.49 billion.
8990 Holdings has already generated P8.63 billion in gross revenues during the first nine months of 2018, or 40% higher year-on-year. Net income attributable to the parent accordingly went up 38% to P3.41 billion.
Shares in 8990 were unchanged at P7.59 each at the stock exchange on Tuesday.