DOUBLEDRAGON Properties Corp. is aiming to become number one in industrial leasing, community mall development, and the hospitality business — areas which founder Edgar J. Sia II feels the other real estate firms have overlooked.
“None of the big players are dominant in that space. Industrial leasing, community mall retail leasing, and hospitality… We are the only ones heavily focused on that in the past couple of years,” Mr. Sia, chairman and CEO of DoubleDragon, said during the company’s annual shareholders’ meeting in Makati City last week.
He cited Mang Inasal, a small barbecue chicken restaurant he founded in Iloilo City in 2003, which quickly expanded around the country and was acquired by fastfood giant Jollibee Foods Corp. in late 2010.
“So it does not mean that a new player cannot be number one in a specific space just because there’s some big players around it. It’s more driven by that the big ones may have missed,” Mr. Sia said.
The DoubleDragon executive noted the major real estate players currently have around 3,000 hotel rooms. By 2020, DoubleDragon hopes to surpass this by hitting its goal of having 5,000 hotel rooms under the Hotel 101 brand and JinJiang Inn brands.
A total of eight industrial spaces, meanwhile, will be constructed through 2020, with two in North Luzon, two in South Luzon, two in Visayas, and two in Mindanao. This will add 100,000 square meters (sq.m.) to the company’s industrial leasing portfolio under CentralHub Industrial Centers, Inc.
DoubleDragon has allotted P4.8 billion for the expansion of its industrial and hospitality businesses, which will be sourced from the P7.5-billion follow-on offering it looks to raise before the year ends.
For the commercial leasing segment, DoubleDragon is betting on strong growth in the provinces, as it opens CityMalls in second- and third-tier cities in Visayas and Mindanao. This strategy allows them to avoid competing with the bigger mall operators.
“Our model is we buy the land, build the mall, provide the platform for the modern retail to come in. Generally in all those tier-3 cities, there’s no modern retail there. So generally, 90% of the time when we open our CityMall there, it’s the first modern retail store in that specific city, tier-3 city,” Mr. Sia said.
A total of 20 community malls, under the CityMalls brand, are now operational with another 25 under construction. This will translate to 700,000 sq.m. of commercial retail leasing space.
“So if I may ask you, what’s the big ones equivalent to our CityMall? To our hospitality, that’s so big now? There’s none. This would make the company really strong, if it will be dominant not in one, not in two, but in three areas of the property space despite the company being a newcomer,” Mr. Sia said.
Aside from the three segments, the listed firm also has core interests in office leasing, which will also be adding 300,000 sq.m. in the next three years. This will come from the DD Meridian Park’s four towers in the Bay Area, as well as the Jollibee Tower located in Pasig City.
DoubleDragon recently increased its 2020 target for leasable portfolio from 1 million sq.m. to 1.2 million sq.m., and revised its 2020 net income goal to P5.5 billion from P4.8 billion.
The company’s consolidated net income surged 161% to P376.4 million in the first semester due to robust growth in top-line and improved gross margins. DoubleDragon drew strength from the surge in recurring revenues to P473.3 million in the first half from P92.4 million in the same period last year. — Arra B. Francia