The hotel arm of listed property developer 8990 Holdings Inc. plans to invest P1.5 billion to expand its hotel portfolio over the next six years, riding on the domestic tourism boom.
8990 Holdings President and Chief Executive Officer Januario Jesus Atencio said the company will build three more Azalea hotels and residences in Cebu, Davao and Clark until 2021.
8990 Holdings also hopes to build about 100,000 housing units and grow its portfolio to five hotels in a bid to more than double its net profit to at least P8 billion within the next five years.
Atencio said the developer would construct 55,000 new residential units until 2020, in addition to the more than 33,000 units it already built.
“(We are building) one hotel every two or three years,” he said, noting that each hotel will have 100 rooms. Azalea hotels and residences are located in the top tourist attractions of the country in Baguio City and Boracay Island in Aklan.
The completion of three new hotels will bring 8990 Holdings’ hotel portfolio to about 700 rooms.
“Tourism is fast becoming one of the Philippine cornerstone commercial activities. When low cost airlines started offering travel (at an affordable cost) for the ordinary working class Filipinos and his family, we want to support that,” Atencio said.
8990 Holdings has joined the issuer community of the Philippine Dealing and Exchange Corp. (PDEx) organized secondary market, with its maiden listing of P9 billion fixed rate bonds due 2020, 2022 and 2025.
Apart from being one of the country’s largest home builders for the masses, the company has expanded its product lines to developing malls and medium- and-high-rise condominium projects.
It is now diversifying its sources of long-term financing with these bond issues.
“Perhaps, we will be more than double in 2020, because if the minimum growth rate is 20 percent, that means it takes you five years to double your size,” he said in an interview.
Atencio is optimistic about the prospects of the mass-housing market amid the backlog in demand and the country’s robust economy.
“(The country needs to build) 1 million houses a year, then you solve the backlog in six years,” he said.
Atencio said more people could now also afford to buy houses at the same price after the Pag-IBIG Fund again reduced its interest rates to 6.5 percent a year.