They used to be business rivals but they were really meant to be partners, so that’s what they have become.
Mang Inasal founder Edgar “Injap” Sia II and Jollibee Foods Corp. founder and chair Tony Tan Caktiong—both born in the Year of the Dragon, two zodiac cycles or 24 years apart—are working together to build a property business that seeks to benefit from the development of the countryside.
By 2020, DoubleDragon Properties Corp. aims to establish a chain of 100 community malls under the brand “CityMall” with a total of 700,000 square meters of leasable space, a hotel portfolio of 5,000 rooms, over 300,000 square meters of leasable office space and another 100,000 square meters from its entry into industrial leasing.
A young entrepreneur who competed head-on with established players like Jollibee when he set up Mang Inasal in 2003, Sia has since earned the respect of Tan Caktiong and other tycoons. Apart from unlocking billions of pesos from the sale of Mang Inasal to Jollibee to fund a more aggressive foray into the real estate business, Sia gained a partner and mentor in Tan Caktiong.
“Tito Tony continues to provide steady guidance, having had long years in doing business here and abroad. We complement each other quite well, more because we can understand and relate well since we had a similar entrepreneurial journey. Having similar values and principles also matters a lot. Most importantly, I see him, just like our parents, as one who genuinely wishes us to excel and shine,” Sia told the Inquirer.
Tan Caktiong, who graduated from the University of Santo Tomas in 1975 with a degree in Chemical Engineering, opened his first ice cream parlor at the age of 22. Since then, Jollibee has grown to become the largest fast food chain in the Philippines and one of the world’s most valuable restaurant chains.
Sia, on the other hand, took up Architecture at the University of San Agustin in Iloilo but dropped out to focus on his entrepreneurial ventures. An entrepreneur since he was 20, he has been in many fields.
He was into photo development, three-star hotel operation and even operated a laundry shop.
In 2003, he borrowed P2 million from his father, who owned a hardware store, to put up his first Mang Inasal grilled chicken restaurant.
The rest is history: Mang Inasal grew big enough (then with 338 branches) to be attractive to Jollibee, which bought an initial 70 percent stake in the restaurant chain for P3 billion in 2010. Jollibee acquired the remaining 30 percent for P2 billion in 2016.
Meanwhile, Sia started real estate company Injap Land Corp. in 2009, at that time working only on provincial projects. In 2011, he also formed Hotel of Asia Inc. (HOA), a joint venture with Oishi founder Carlos Chan and Steineil Development Corp., which focused on hotel ventures such as Hotel 101 and JinJiang Inn-Philippines. This hospitality business was eventually folded into DoubleDragon.
In 2012, the Tan Caktiong family bought into Injap Land, which became DoubleDragon under an equal partnership with Sia.
Seeing its potential, the country’s largest conglomerate SM Investments Corp. acquired a 34 percent stake in DoubleDragon’s subsidiary CityMall Commercial Centers Inc. (CMCCI).
DoubleDragon debuted on the Philippine Stock Exchange in April 2014 when Sia was just 37.
These days, Sia’s two siblings are also involved in the real estate business.
Ferdinand Sia, DoubleDragon president, graduated from UP Visayas with a degree in Political Science and took up law at the Arellano University College of Law. Rizza Marie Joy Sia, DoubleDragon’s treasurer and chief finance officer, graduated from UP Visayas with a Bachelor of Science in Accountancy and is a certified public accountant.
The vision for DoubleDragon is to accumulate 1.2 million square meters of leasable space in line with the goal of having 90 percent of revenues from diversified recurring revenue sources backed by a string of appreciating physical assets.
With such a portfolio of leasable space, DoubleDragon expects to reach an annual net profit of P5.5 billion by 2020, an upgrade from the original goal of P4.8 billion.
As of end-2017, DoubleDragon completed 332,500 sqms of leasable space. By the end of this year, the leasing footprint is seen reaching 600,000 sqms.
As of the first quarter of 2018, the first 28 operational malls in the portfolio are over 95 percent leased out. Some 22 more malls are slated for completion this year, bringing its shopping mall portfolio to 50.
DoubleDragon sees an organic shift from traditional retail to modern retail in the fast-growing provinces, alongside the penetration of e-commerce in highly urbanized areas.
These developments are in turn seen to make expansion into CityMalls more critical to modern retail tenants seeking to hedge their exposure against the disruptive digitalization of the retail environment in Metro Manila.
“We expect the inflection point of these transitions to be felt within the next three years, just in time for the completion of our goal of having a strong network of 100 CityMalls in the provincial areas of the Philippines. We are glad that CityMall has already started to gain significant traction in the countryside, which we aim to dominate as we grow organically,” Sia said.
“For the past three years, DoubleDragon has already planted the seeds and necessary groundwork that will enable the company to play a major role in this retail transformation as we continue to expand in what will essentially be the most important market one day as e-commerce continues to disrupt the urban market,” he said.
“The business model of CityMall is positioned to remain relevant beyond the age of digitalization because we focus on delivering only basic necessities. Generally, the supermarket, cinema, services and food tenants combined occupy more than 70 percent of a typical CityMall. CityMalls are also conveniently located in provincial city centers within close reach of the market,” Sia added.
Recently, DoubleDragon completed its first office property development, DoubleDragon Plaza, where it now also holds its corporate headquarters.
The four-story tower near Mall of Asia has 130,000 square meters in leasable area.
Upon full completion by 2020, the DD Meridian complex—which sits on a strategic 4.8-hectare property at the corner of Edsa and Diosdado Macapagal Avenue—will have 280,000 square meters of leasable space. This will be big enough to host 50,000 workers.
This July, DoubleDragon is going back to the stock market to raise P6 billion from the sale of new shares, primarily to foreign investors.
More than just a fresh fund-raising, the bigger motivation for the public offering for DoubleDragon is to improve its trading liquidity and strengthen its position in the international investment community.
The company aspires to be a property blue chip, and eventually be included in the Philippine Stock Exchange index.
The Philippine Stock Exchange and the Securities and Exchange Commission have authorized DoubleDragon to sell to the public some 150 million new common shares at between P30 and P40 each.
The equity deal will be priced on June 21 and the offering will run from July 2 to 6. Listing date is scheduled for July 13.
The international bookrunners and lead managers for the offering are Credit Suisse (Singapore) Ltd., Maybank Kim Eng Securities Pte. Ltd. and UBS AG Singapore branch. The domestic lead underwriters and bookrunners are BPI Capital Corp. and Maybank ATR Kim Eng Capital Partners Inc.
DoubleDragon intends to use the net proceeds from the offer to expand its industrial leasing and hospitality businesses, two of the business segments that have been added to its portfolio since going public in 2014. The company also plans to acquire more land to fuel future growth.
This follow-on offering will make DoubleDragon a strong property company and “graduate” from being a startup, Sia said.
With Ferdinand and Rizza Marie Joy Sia