Doubledragon sees P11B in recurring income by ‘21

Property developer DoubleDragon Properties Corp. expects to build up an annual recurring income stream of nearly P11 billion from shopping mall, office, industrial warehouse and hotel businesses by 2021, allowing the company to start paying cash dividends to shareholders.

“By 2021, DoubleDragon is expected to start its annual 30 percent dividends as two-thirds of the revenues by then is already free cash flow,” company chair Edgar Sia II said in an interview after the property developer’s stockholders’ meeting.

This year, Sia said DoubleDragon could generate P4 billion in recurring income, rising to P5.4 billion by 2020 and further to P10.8 billion by 2021. “That’s the year we target to start paying dividends,” he said.

The projected recurring income level includes earnings attributable to minority interest.

“But this excludes non-recurring revenues from sale of Hotel 101 units and fair valuation gains so we have to add that to get net income attributable to common (shareholders,” he said.

He noted that the P16.1 billion worth of Hotel 101 condotel inventory was expected to be booked as revenues in the next two years.

Looking at the company’s 2018 performance, Sia noted that recurring income was just a bit bigger than the cost of debt servicing.

By next year, Sia said recurring earnings would already be three times debt financing costs.

However, the company would still need to use most of the cash flow for its asset buildup.

The company aims to complete a leasable portfolio of 1.2 million square meters (sq m) by 2020 comprising of 700,000 sq m from 100 community malls under the CityMalls brand; 300,000 sq m from its Metro Manila office projects DD Meridian Park and Jollibee Tower; 100,000 sq m from the pipeline 5,000 hotel rooms of Hotel 101 and Jinjiang Inn Philippines; and another 100,000 sq m of industrial space from various CentralHub sites across the country.

DoubleDragon grew its net profit in the first semester by 74.8 percent year-on-year to around P2.2 billion.

Recurring revenues rose by 29.1 percent year-on-year to P1.83 billion for the first six months.

Six-month recurring revenues accounted for 32.7 percent of the company’s total revenues as it moves closer to its goal of becoming a 90-percent recurring revenue company. —DORIS DUMLAO-ABADILLA