By Arra B. Francia, Senior Reporter
DoubleDragon Properties Corp. on Friday said its diversified portfolio will help shield the company from adverse effects of the crackdown on the offshore gaming industry.
DoubleDragon Chairman and Chief Executive Officer Edgar J. Sia II said the company’s total exposure to Philippine Offshore Gaming Operators (POGOs) is currently at 12%. For DoubleDragon Plaza in Pasay City, about 60% of the 130,000 square meters (sq.m.) in the area is leased out to POGOs.
Of this, 80% are Chinese, while the remaining are a mix of Korean and European firms.
“Just in case, we’re covered…the location where they are is very prime, we think one year is more than enough to replace,” Mr. Sia told reporters after the company’s annual shareholders’ meeting in Pasay City on Friday.
Mr. Sia noted that they require one-year’s worth of rental security deposits from tenants — on top of complete post-dated checks for the entire lease term, protecting them from sudden changes in their tenants’ leasing plans.
Investors have become cautious of property firms since the Chinese Foreign Ministry called on the Philippines to ban all forms of online gambling involving Chinese citizens. There are currently 60 POGOs licensed by the Philippine Amusement and Gaming Corp., 48 of which are operating.
The government estimates about 130,000 Chinese workers are employed by POGOs.
The Bangko Sentral ng Pilipinas and Anti-Money Laundering Council have since started studying the risks of having POGOs in the country.
Amid the tighter regulations against POGOs, Mr. Sia said they would like the sector to continue operations in the country.
“We would like that to continue because they have better yields and we think also it might continue,” Mr. Sia said.
He earlier explained that they are able to get 29% yields from POGO tenants, compared to a 14% yield from traditional offices or business process outsourcing (BPO) firms.
Office leasing is one of DoubleDragon’s four business segments, with the others being retail leasing, industrial leasing, and hotels.
“In just five years, DoubleDragon has built a portfolio of 603,000 sq.m of leasable space…As these properties contribute to DoubleDragon’s rental revenues, the underlying hard assets likewise continue to appreciate,” Mr. Sia said in a speech during the stockholders’ meeting.
DoubleDragon’s net income attributable to the parent more than doubled to P1.52 billion in the first half of 2019, compared to P744.69 million in the same period a year ago. This came amid a 54% jump in gross revenues to P5.59 billion.
Shares in DoubleDragon climbed 1.69% or 40 centavos to close at P24 each at the stock exchange on Friday.