DoubleDragon nets P744M
Property developer DoubleDragon Properties Corp. grew its first quarter net profit by 349.4 percent year-on-year to P744.56 million as the company unlocked more recurring revenues out of its build-up of commercial property assets.
Three-month recurring revenues rose by 173.7 percent year-on-year to P531.38 million for the first three months as rental income jumped by 291.9 percent to P409.71 million. Recurring revenues now account for 29 percent of total revenues as DoubleDragon fleshes out its planned shift towards becoming a 90-percent recurring revenue company by 2020, the company recently disclosed to the Philippine Stock Exchange.
“This quarter is quite significant for DoubleDragon as it is the first time we have exceeded P500 million in recurring revenue in just three months time, marking the beginning of the realization of the projects we have been building. The company is now starting to harvest the capital investments we have deployed in the last three years,” DoubleDragon chair and chief executive officer Edgar Sia II said.
“The cashflow that our current projects are now generating will be reinvested into further growing our leasable portfolio as originally intended,” he added.
The four office towers of DoubleDragon Plaza – comprising the first phase of DD Meridian Park which marks the company’s debut into the office property space – are now 98.2-percent leased out and are expected to substantially contribute to consolidated rental revenues starting this year.
Majority of the company’s leasable portfolio comes from retail-oriented developments with 29 community malls now operational nationwide. The goal is to complete 50 malls this year. All operational CityMalls have an average leasing occupancy rate of 95 percent as of end-March.
The company targets to complete a leasable portfolio of 1.2 million square meters by 2020, of which: 700,000 square meters will come from 100 community malls branded CityMalls; 300,000 square meters from its Metro Manila office projects DD Meridian Park and Jollibee Tower; 100,000 square meters from the planned 5,000 hotel rooms of Hotel101 and JinJiang Inn Philippines; and, another 100,000 square meters of industrial space from eight CentralHub sites across Luzon, Visayas and Mindanao.
“We anticipated early on that one of the key risks to our business would be the rising interest rate environment. We have mitigated this risk by favoring fixed rate funding for all of our fund-raises. With benchmark interest rates rising for the first time since 2014, we now reap the rewards of our prudency. We have been very deliberate in all of our fund-raising activities to match tenors with the return profile of our projects. We have ensured that we have no key maturities until 2021, by then, the 1.2 million square meters of leasable space we are building is expected to fully contribute,” Sia said.
Assets stood at P67.19 billion while total equity reached P22.81 billion. For every peso of equity, the company had a debt stock of P1.47.
DoubleDragon’s four pillars of growth are: provincial retail leasing, office leasing, industrial leasing and hospitality businesses, which are all seen to provide diversified source of recurring revenues backed by a string of appreciating hard assets.
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