DoubleDragon Properties Corp. to file its application for a P14.7-billion real estate investment trust (REIT) offering within the week in order to raise funds to expand its portfolio of leasable properties. DoubleDragon REIT property subsidiary DD-Meridian Park Development Corp. to change its corporate name to DDMP REIT., Inc and articles of incorporation in preparation for the IPO.
The company expects to file its REIT IPO application with the SEC (Securities and Exchange Commission) and PSE (Philippine Stock Exchange) within the week,” it said. Profits from the REIT listing will support the company’s plan to build about 425,000 square meters of floor area, which will expand the share of its recurring-revenue businesses, it said.
“The DDMP basket is seen to be a compelling REIT offering since it will include the land, a premier corner lot located along the main thoroughfares of Macapagal Avenue, EDSA Extension and Roxas Boulevard, where the first six completed buildings sit on,” DoubleDragon Chairman and CEO Edgar J. Sia II said.
“The value of the prime double corner 4.75 hectare block of land with titled land ownership to be held in perpetuity should keep on appreciating decade after decade, a very important inclusion for both domestic and foreign investors,” he added.
DoubleDragon is planning REIT offerings every year until 2025, which will involve about 200,000 square meters of leasable assets each year. This will help the company complete 1.2 million square meters of leasable property by 2022 and increase its total equity to P120 billion by 2030.
Separately, Mr. Sia’s other listed business, grocery operator MerryMart Consumer Corp., reported a 26% rise in net profit to P14.5 million in the nine months to September.
Consolidated revenue rose 28% to P2.42 billion after the period ended with 18 operational branches. The company hopes to open seven more branches before the year ends.
“MerryMart is in a business where a certain level of volume and branch network coverage is needed to achieve optimum operational efficiency and effective consumer brand pull. For that reason, during the second half of this year, we continued to ramp up our team and equip and enhance the backend support of the company as it prepares to soon reach its desired execution velocity,” Mr. Sia said in a statement.
“2020 is a reset year, 2021 a recovery year, and 2022 to 2030 should be highly promising growth years. Our team will continue to strive hard with vigor to cause both DoubleDragon and MerryMart to, in time, be in a position where it can efficiently and significantly capture that next great cycle ahead,” he added.
DoubleDragon REIT is expected to become the second REIT listing in the country after Ayala Land’s AREIT Inc. At the maximum price, DoubleDragon’s proposed REIT IPO is bigger than AREIT’s P15.1 billion offering.
The REIT listing is seen to bring up DoubleDragon’s equity base past the P50-billion mark.
“Other than the safeguards already indicated in the REIT listing rules, REIT investors generally want five elements present; 1. Asset basket in a prime location that is seen to remain relevant in the next 30 to 50 years at least, 2. Reasonable yield above a bond coupon, 3. Good tenant mix, 4. Capable property management, and 5. Good pipeline of assets for future infusion. We believe all of these elements are present in DoubleDragon’s leasable portfolio,” said Sia in an earlier statement.
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