DoubleDragon eyes 150% equity growth by 2030

PROPERTY developer DoubleDragon Properties Corp. is targeting to expand its total equity by over 150% to P120 billion in the next decade through income growth and real estate investment trust (REIT) offerings.

In a virtual meeting with stockholders on Wednesday, DoubleDragon Chairman and CEO Edgar J. Sia II said the company is putting prime importance on total equity value as its focus is leasing and generating recurring income.

“[T]he overall strategic goal of DoubleDragon is to be able to grow its total equity from P47.86 billion today to increase to P120 billion by 2030,” Mr. Sia said.

“This P120 billion total equity goal will be enabled mainly by accumulation of net income, and from the multiple tranches of REIT listings of its leasable portfolio,” he added.

It is common for a listed real estate company to have a market capitalization valued higher than its total equity if its focus is recurring revenues from leasing, Mr. Sia said.

DoubleDragon’s market capitalization at present is P33.19 billion, against its total equity of P47.86 billion.

“Since DoubleDragon is focused on leasing and generating recurring income, it primarily holds perpetual ownership of prime land and buildings across the country… The total equity value of the company is very important, as the net value of DoubleDragon will be generally based on its total equity value,” Mr. Sia said.

To support this goal, the company has planned to do a series of REIT listings starting this year until 2025, covering about 200,000 square meters (sq. m.) of leasing assets every year at an estimated cap rate of 6%.

The first tranche involves 248,349 sq. m. of leasable space with an estimated consolidated value of P50.89 billion. It is expected to generate P16.97 billion, which DoubleDragon will use to build 450,000 sq. m. of new leasing space.

During Wednesday’s meeting, DoubleDragon Chief Investment Officer Marriana H. Yulo said the company is “in advanced preparations” for the filing of its first REIT listing.

DoubleDragon booked an attributable net income of P3.3 billion in the first half of 2020, growing more than double from last year’s P1.52 billion. Its revenues rose 45% to P8.11 billion, where recurring revenues account for 23%.

The company’s assets are composed of provincial retail leasing, office leasing, industrial leasing and hotels. Its target is to complete a leasable portfolio of 1.2 million sq. m. by 2022.

Shares in DoubleDragon at the stock exchange shed two centavos or 0.14% to close at P14 each on Wednesday.