MASS-housing builder 8990 Holdings Inc. said it sold some P2.83 billion in contract to sell (CTS) of its various units all over the country to Dearborn Resources and Holdings Inc.
In its disclosure to the Philippine Stock Exchange, 8990 Holdings said on Tuesday the CTS will come from its various subsidiaries, but mainly from 8990 Housing Development Corp. and from those in its Mindanao-based units.
“The sale of receivables is on a nonrecourse basis and is based on the outstanding principal balance of such CTS receivables,” the company said.
The mass-housing builder is using its CTS as a way of boosting recurring income as it focus on its strength on horizontal development rather than renting out spaces for shopping mall or office.
The CTS will come from the following housing projects: Deca Homes Indangan, Urban Deca Homes Marilao, Deca Homes Marseilles, Deca Homes Baywalk Talisay 2, Deca Homes Baywalk Talisay 3, Deca Homes Mactan, Deca Homes Minglanilla Homes, Deca Homes Mandaue Prime, DH Talisay, Urban Deca Homes H. Cortes, Urban Deca Homes Tisa, Deca Homes Esperanza, Deca Homes Resort Residences, Deca Homes Gensan, Deca Homes Pavia 2, Urban Deca Homes Campville, Bellavista Subdivision, Deca Clark Resort Residences, Deca Homes Catalunan Grande, Urban Deca Homes Tipolo, Urban Deca Tower Edsa, Savannah Green Plains Subdivision, Urban Deca Homes Manila and Deca Homes Pavia Resort Residences.
Mariano Martinez, the company’s chairman, earlier said it would take time for the company to increase recurring income as some of its developments have a shopping-mall component. But the increase will not be as significant compared with other developers.
“We may not able to see it in 2018 but certainly, in 2019 or in 2020, we’ll see more recurring income,” Martinez said. “But, in terms of total participation, it will be mostly takeouts from our housing residential units rather than our commercial forays.”
Many investors are looking at a property developers’ recurring income as increasing such revenue stream can shield it from the cyclicality of the property sector. As a general rule, there will be five years of increase in sales as a result of developments and then five years of downturn.
