July 06, 2014

HOUSE acquires 13-hectare VITA property

BusinessWorld today reported that low-cost housing developer 8990 Holdings Inc (HOUSE, Not rated) has acquired 13 hectares of land from Vitarich Corp (VITA, Not rated) for P610m. Based on HOUSE’s estimates, it can build 1,885 townhouse units or 1,105 single-detached houses on the property.

Our take: Since its follow-on offering, HOUSE has acquired 124 hectares and has reportedly beefed up its land bank to 361 hectares. This should help allay concerns on the sustainability of its earnings. However, since the recent acquisitions are presumably more costly than its previous land bank, it remains to be seen how HOUSE will configure its prospective products in order to maintain above-average gross margins.– WealthSec