DoubleDragon is looking to raise as much as PhP14.7B from the sale of shares from its Real Estate Investment Trust (REIT). DDMP REIT Inc. will sell 5.94B common shares with an overallotment option of 594.24M shares at PhP2.25/sh. DDMP is looking to include seven assets in the first tranche of its REIT portfolio, and would comprise 248,349 sqm of leasable space, with an estimated value of PhP50.9B, and expects to raise PhP14.7B from the REIT listing translating into a 33.33% public float, the minimum required from a listing.
The majority of the proceeds will be used to finance CentralHub Industrials Centers Inc., to boost its leasable industrial warehouse space and footprint nationwide. The warehouse complexes are designed for use as warehouses, cold storage facilities, commissaries, or as logistics and distribution centers. The proceeds would be enough to construct around 450,000 sqm of building floor area. Two more buildings in Meridian Park are eyed to be included in the REIT in the next 2-3 years.
Stock Transfer Agent: Philippine National Bank Trust Banking Group
Receiving Agent: Philippine National Bank Trust Banking Group
Escrow Agent: Philippine National Bank Trust Banking Group
External Auditor: R.G. Manabat & Co. (KPMG)
Stock Symbol: DDMPR
Price-Setting Date: Mar 5, 2021
Start of Offer Period: Mar 10, 2021
End of Offer Period: Mar 16, 2021
Tentative Listing Date : Mar 23, 2021
The Company
DDMP REIT, INC. (formerly DD-Meridian Park Development Corp.) is a real estate company established in the Philippines (“DDMP REIT” or the “Company”) and incorporated on October 27, 2014. Upon compliance with the requirements of the REIT Law, the Company shall operate as a REIT.
The company is a real estate investment trust formed primarily to own and invest in an income-producing commercial portfolio of office, retail, industrial and hotel properties in the Philippines that meets its investment criteria. Primarily, DDMP REIT will be the commercial REIT platform of DoubleDragon Properties Corp. As a commercial REIT, DDMP REIT will focus on expanding its mall, office, industrial and hotel properties. However, if the opportunity arises, DDMP REIT may also explore other types of real estate properties
available in the market.
DDMP REIT will offer Shareholders an investment opportunity with a stable yield, appreciating underlying asset values, high-quality properties with strong tenant demand, strong Sponsor support from DDPC, proven capabilities of management to execute as planned and focused on growing dividend yield hand in hand with a long-term appreciation of underlying asset values.
As of the date of this REIT Plan, the Company’s property portfolio consists of the following three commercial properties comprising six office towers with retail components in DD Meridian Park that meet the Company’s investment criteria. DD Meridian Park is the Company’s flagship project in Metro Manila and is located along the corners of the main roads of Macapagal Avenue, EDSA Extension, and Roxas Boulevard in the Bay Area. DD Meridian Park is being developed as an office-led mixed-use development. The land on which these respective buildings are built form part of the Company’s asset portfolio and is owned by the Company.
- DoubleDragon Plaza is a commercial property in DD Meridian Park consisting of four 11-storey towers (including a basement) with a retail area on the ground floor, parking in the basement, 2nd to 3rd levels, and BPO offices from the 5th to the 11th levels. DoubleDragon Plaza has approximately 139,240 sq.m. of Gross Leasable Area. DoubleDragon Plaza has four office towers, with seven office floors per tower, which in total account for 127,863 sq.m of Gross Leasable Area, and a commercial retail area located on the ground floor, which accounts for 11,377 sq.m. of Gross Leasable Area. The retail area is dedicated to established food concepts, basic services, a supermarket, and a themed food hall. In addition, DoubleDragon Plaza has 1,946 parking spaces (including lifts). DoubleDragon Plaza commenced operations in 2017;
- DoubleDragon Center East is a commercial property in DD Meridian Park consisting of an 11-storey tower (including a basement) with a retail area on the ground floor, parking on the basement and 2nd levels, and offices from the 3rd to the 11th levels. DoubleDragon Center East has approximately 16,197 sq.m. of Gross Leasable Area. DoubleDragon Center East’s office tower consists of seven office floors and a total of 15,124 sq.m of Gross Leasable Area. The ground floor retail area consists of 1,073 sq.m. of Gross Leasable Area dedicated to established food concepts and banks. In addition, DoubleDragon Center East has 62 parking spaces (including lifts). DoubleDragon Center East commenced full operations in 2019; and
- DoubleDragon Center West is a commercial property in DD Meridian Park consisting of an 11-storey tower (including a basement) with a retail area on the ground floor, parking on the basement and 2nd levels, and offices from the 3rd to the 11th levels. DoubleDragon Center West has approximately 16,815 sq.m. of leasable space. The office tower of DoubleDragon Center West consists of seven office floors and a total of 15,689 sq.m of Gross Leasable Area. The ground floor retail area consists of 1,126 sq.m. of Gross Leasable Area dedicated to established food concepts, banks, and a financial service company. In addition, DoubleDragon Center West has 74 parking spaces (including lifts). DoubleDragon Center West commenced full operations in 2019.
The Company also owns the land where DoubleDragon Tower and Ascott-DD Meridian Park are currently being constructed, and has leased these properties (including the land where such properties are being constructed), to DD TOWER, INC. and DDMP SERVICED RESIDENCES, INC., respectively, pursuant to contracts of lease each dated November 19, 2020.
While the Company owns the land where DoubleDragon Tower and Ascott-DD Meridian Park are currently being constructed, the right-of-use and the potential cash flows to be generated post the completion of these two properties will be owned by DD TOWER, INC. and DDMP SERVICED RESIDENCES, INC., respectively for the duration of the respective contracts of the lease. DDMP believes that DoubleDragon Tower and Ascott-DD Meridian Park are potential expansion projects to add to its asset portfolio once cash flows from operations of these properties stabilize.
Board of Directors, Management Team and Executive Officers
The Board
- Edgar Sia II – Director and Chairman
- Tony Tan Caktiong – Director and Co-Chairman
- Ferdinand Sia – Director and President
- Jesus Emmanuel M. Yujuico – Director
- Jamie Rafael M. Yujuico – Director
- Willian Tan Untiong – Director and Corporate Secretary
The Company is a domestic corporation, established to invest in real estate. The operational and ownership structure and the relationship of the various parties are illustrated in the following diagram:
Tenant Profile:
The table below sets out details of the Properties’ overall distribution of office space, in terms of office type, and overall tenant diversification, in terms of industry sector, as of September 30, 2020:
Dividends
As of the date of this REIT Plan, the Company has approved a dividend policy in accordance with the provisions of the REIT Law, pursuant to which the Company’s shareholders may be entitled to receive at least 90% of the Company’s annual Distributable Income.
DDMP REIT is looking to provide shareholders with regular and stable distributions with long-term dividend yield growth, with a projected dividend per share yield of 5.08% for 2021E and a projected dividend per share yield of 5.45% for 2022E at an offer price of PhP2.25/share. The 2021E dividend yield offers an attractive premium of 2.07% to 10-year Philippine bond yield of 3.01%, as of November 13, 2020.
Summary
Edgar ‘Injap’ Sia II way of doing IPO is uncommon he always aims to make the offer price as low as possible, with the IPO performance of DoubleDragon Properties Inc.(DD) and MerryMart Consumer Corp.(MM) the stock market is very positive for DDMP REIT Inc. Ayala groups AREIT Inc. was offered at Php 27 apiece is now trading at Php 32 meaning the demand for REITs is there, as it provided consistent dividends for stockholders.
There are four benefits associated with REITs:
1. There is earning through dividends. Investors are entitled to receive 90% of distributable income annually.
2. There is liquidity since the shares of REITs are relatively easy to convert to cash.
3. Risk can be managed better through diversification. Through the REITs, investors can invest in a wide variety of real estate properties at affordable levels.
4. There is transparency since REITs are required to disclose information to the general public.
In choosing what REIT to invest in, there are a couple of things that investors should consider. One key consideration would be the location of the properties. Different real estate locations have varying real estate values even within Metro Manila. Being mindful of the thriving locations today can help investors decide prudently. It would be important to get key information on the planned infrastructure projects of the government and real estate companies in order to get a good glimpse of what locations are going to do well in the future.
Source: DDMP Reit Website ; DDMP Preliminary Reit Plan ; PSE Edge
DDMP Preliminary Reit Plan Download
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