DoubleDragon eyes to raise nearly P60B from REIT offering

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In photo taken today, guest of honor BSP Governor Benjamin E. Diokno with Amb. Benedicto Yujuico, Tony Tan Caktiong, Simon Paz and Edgar "Injap Sia II)

DOUBLEDRAGON Properties Corp. expects to raise up to P59.4 billion when it places its entire leasable space portfolio under a real estate investment trust (REIT), the company told the stock exchange on Monday.

The listed property developer said in a disclosure that it could raise an initial P5 billion from a REIT offering once regulators come out with the final rules this year. This could rise to P15 billion if the company decides to list the REIT in early 2020, as its leasing assets will become more mature by then.

“A total of P59.4 billion in proceeds is expected to be raised through a REIT listing of the company’s planned total 1.2 million square meter (sq.m.) leasable portfolio,” DoubleDragon said.

DoubleDragon Chief Investment Officer Marianna H. Yulo earlier said that the company will spend the funds raised from a REIT offering for the company’s expansion beyond 2020, where they will focus more on hospitality and industrial projects.

The company is currently focusing on its goal to have 1.2 million sq.m. of leasable space by next year.

The expansion will include 700,000 sq.m. from 100 CityMalls, or community malls located in second and third tier cities; 100,000 sq.m. from 5,000 hotel rooms under homegrown brands Hotel101 and JinJiang Inn; 100,000 sq.m. from eight industrial facilities called CentralHub; and 300,000 sq.m. from office projects in Pasay and Ortigas Center.

Once completed, DoubleDragon said the properties will have an estimated asset value of P180 billion.

Ms. Yulo also noted that the REIT offering will show investors how much cash flow goes into the company.

For the hotel business alone, DoubleDragon sees P16.1 billion in sales from its new inventory from Boracay, Bohol, Palawan, and Cebu over the next two years. The company has already sold P2.56 billion worth of units from its recently launched hotels in Bonifacio Global City and Davao.

In a separate statement, the company said it has opened a new sales lounge for Hotel101 last week on the ground floor of the DoubleDragon Plaza at DD Meridian Park in the Bay Area.

“The company has also developed a wide network of licensed real estate brokers and agencies which we have partnered with both locally and abroad to develop our sales channels further,” Ms. Yulo said in a statement.

DoubleDragon has also established Hotel 101 Worldwide Private Ltd. in Singapore to boost its selling capacity overseas. It also plans to open sales offices in Hong Kong, the Middle East, Japan, London, Italy, and the United States this year.

The company’s net income attributable to the parent climbed by 46% in the first quarter of 2019 to P767.30 million, after gross revenues also surged 33% to P2.44 billion.

Shares in DoubleDragon climbed 2.46% or 65 centavos to close at P25.80 each at the stock exchange on Monday. — Arra B. Francia