DoubleDragon to build industrial hub in Davao
MANILA, Philippines – Property developer DoubleDragon Properties Corp. has teamed up with Alsons group to build a new industrial warehousing hub in Davao City, the fourth in its growing chain of portfolio of CentralHub-branded industrial property assets.
This Davao site, which will create 40,392 square meters of leasable industrial warehouse space by 2020, also marks the debut of DoubleDragon’s industrial leasing subsidiary CentralHub Industrial Centers Inc. in Mindanao.
In a disclosure to the Philippine Stock Exchange on Tuesday, DoubleDragon said CentralHub-Davao would be 70-percent owned by CentralHub and 30 percent by Davao-based Alsons Development & Investments Corp.
The new complex will rise on an 8.2-hectare land along the Daang Maharlika Highway, which is 8 kilometers way from Davao International Container Terminal and 17 kilometers from Francisco Bangoy International Airport in Davao City.
Previously, DoubleDragon’s subsidiary had signed deals to develop CentralHub-Danao (Cebu), CentralHub-Iloilo, and CentralHub- Tarlac. The group has now acquired a total of 23.3 hectares of prime industrial land with a total of 121,626 square meters of leasable industrial warehouse space.
CentralHub is envisioned to become the leading provider of industrial warehouses in the Philippines through the development of its first eight CentralHub complexes by 2020. Two of these will be located in North Luzon, two in South Luzon, two in Visayas, and two in Mindanao.
By 2020, the Company aims to complete at least 100,000 square meters of leasable industrial warehouse space across these sites. Beyond 2020, these eight CentralHub warehouse complexes can expand its leasable space to 400,000 square meters. Each hub will contain modern standardized multi-use warehouses suited for commissaries, cold storage, light manufacturing, and logistic distribution centers.
CentralHub is expected to be a new engine of growth for DoubleDragon by 2020 and beyond, contributing to its goal of building 1.2 million square meters of leasable portfolio by that time.
“DoubleDragon makes sure that it focuses only in ‘sunrise’ sectors within the real estate industry that is expected to remain relevant in at least the next 50 years,” DoubleDragon chair Edgar Sia II said in a press statement. “The company has been seriously focused on building up its portfolio of prime hard assets that can generate high double digit rental yields and deploy capital only on select prime properties that can appreciate five to 10 folds in the next five to 10 years.”
“The reason why we are so fixated in hitting our 1.2 million square meter leasable target by 2020 is because the math is simple. With 1.2 million square meters of leasable space, yielding say an average of P750 per square meter per month by that time, this should give the company total annual recurring revenues of P10.8 billion. This rental income practically translates to about 90 percent EBITDA (earnings before interest, taxes, depreciation and amortization) margin because in addition to rent, developers collect CUSA (common use service area) maintenance fees from tenants which covers operating expenses of each property,” he added.
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