DOUBLEDRAGON Properties Corp. hopes 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.
In a statement Monday, the property developer said it has a pending application to change the corporate name of its subsidiary DD-Meridian Park Development Corp. to DDMP REIT, Inc., and to amend its articles of incorporation to prepare for the REIT initial public offering (IPO).
鈥淭he company expects to file its REIT IPO application with the SEC (Securities and Exchange Commission) and PSE (Philippine Stock Exchange) within the week,鈥 it said.
Proceeds from the REIT listing will support the company鈥檚 plan to build about 425,000 square meters of floor area, which will expand the share of its recurring-revenue businesses, it said.
鈥淭he 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,鈥 DoubleDragon Chairman and CEO Edgar J. Sia II said in the statement.
鈥淭he 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,鈥 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.
In the first nine months, DoubleDragon reported a net profit of P5.03 billion, up 61% from a year earlier. Revenue grew 41% to P9.79 billion.
Excluding unrealized fair-value gains, core profit rose 15% to P1.19 billion, while core revenue increased 9% to P4.31 billion.
Growth was driven by the increase in net completed leasable space and improved retail sales by tenants, which it linked to the relaxation of coronavirus-related quarantine rules. Rental income rose 25% to P2.96 billion, while recurring revenue improved 16% to P3.33 billion.
Separately, Mr. Sia鈥檚 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.
鈥淢erryMart 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,鈥 Mr. Sia said in a statement.
鈥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,鈥 he added.
On Monday, DoubleDragon rose 16 centavos or 1.11% to P14.60, while MerryMart picked up 40 centavos or 9.03% to P4.83. 鈥 Denise A. Valdez
