DOUBLEDRAGON Properties Corp. on Wednesday said it is “generally unaffected” by rising interest rates and weakening peso, as the company’s borrowings are all peso-denominated and have fixed rates.
“Despite the rising interest rate environment, DoubleDragon remains generally unaffected as we were prudent early on in making sure all our corporate notes and retail bonds have fixed interest rates for 7-10 years. The company also has no US dollar exposure with all fund raises being peso denominated,” DoubleDragon Chief Investment Officer Hannah Yulo said in a statement.
The Bangko Sentral ng Pilipinas (BSP) has raised policy rates by 150 basis points over the last four months. This brought the overnight deposit rate to four percent, overnight repurchase rate to 4.5%, and the overnight lending rate to five percent.
Ms. Yulo noted that DoubleDragon has no key maturities for corporate notes until 2021. By that time, the company expects cash flows from its recurring portfolio to be able to cover the principal due.
The listed property developer has continuously been ramping up its portfolio of office spaces, hotel rooms, and industrial facilities that can generate recurring income.
In line with this expansion, DoubleDragon on Wednesday broke ground for the DD Meridian Tower, the ninth building in its flagship project DD Meridian Park in Pasay City.
Once completed by 2020, DD Meridian Park will have eight office towers and one luxury serviced apartment building to be operated by international serviced residences operator The Ascott.
At the same time, the company topped off its sixth office tower called DoubleDragon Center West. The tower will be completed alongside DoubleDragon Center East by the end of the year, adding 35,752 sq.m. of leasable space to the company’s existing 138,503 sq.m. in DD Meridian Park.
Last May, the company opened the first four office towers, which are now fully leased out. DoubleDragon expects more than 20,000 employees to occupy the offices by the end of the year.
DD Meridian Park forms part of DoubleDragon’s goal to have 300,000 sq.m. of leasable office spaces under its portfolio by 2020. The company is also building the Jollibee Tower in Ortigas Center to hit this target.
DoubleDragon is set to have 1.2 million sq.m. in overall leasable spaces during this period, with the completion of 100 CityMalls, 5,000 hotel rooms carrying the Hotel101 and JinJiang Inn Philippines brands, and eight industrial hubs in different sites in Luzon, Visayas, and Mindanao.
“As we complete more projects nationwide, our rental revenues will continue to grow exponentially quarter on quarter. DoubleDragon is now starting to harvest from the seeds that it has been planting around the country in the last four years,” DoubleDragon Chairman Edgar J. Sia II said in a statement.
DoubleDragon grew its net income by 234% to P1.26 billion in the first six months of 2018, as consolidated revenues also gained 123% to P3.63 billion.
Shares in DoubleDragon went up 3.01% or 58 centavos to close at P19.84 each at the stock exchange on Wednesday. — Arra B. Francia