Fast-food giant Jollibee Foods Corp. (JFC) has acquired an initial 38.71-percent stake in industrial property developer CentralHub Industrial Centers (CentralHub) Inc., coming in as a strategic partner of DoubleDragon Properties Corp.
In a disclosure to the Philippine Stock Exchange on Tuesday, JFC said that together with its wholly owned subsidiary Zenith Foods Corp. (ZFC), the group had executed the definitive agreements to implement their investment in Central Hub, which intends to register and operate as a real estate investment trust (REIT).
To pave the way for JFC’s entry, CentralHub is set to implement a stock split. Once this has been approved by the Securities and Exchange Commission, JFC said it would own about 1.14 billion shares in CentralHub equivalent to a 28.24-percent stake, while subsidiary ZFC would own 423.01 million shares or 10.47 percent.
The combined 1.56 billion shares will translate to combined 38.71-percent stake, for which the group will pay P1.92 billion.
Commissary
It was earlier disclosed that DoubleDragon and JFC made a deal for the latter to invest a total of P3.97 billion through a property and cash infusion deal. This suggests that JFC’s stake in CentralHub will increase beyond 38.71 percent once more assets are infused.
The portfolio of industrial properties that will be infused by JFC into CentralHub includes its largest operating commissary. The deal will expand the total industrial land portfolio of CentralHub to 39.8 hectares.
Warehouses
Established in 2017, CentralHub develops industrial warehouse complexes that contain standardized, multiuse and industrial quality warehouses suited for commissaries, cold storage and logistics centers to be leased to locators operating nationwide.
By using the REIT structure, CentralHub will be able to recycle capital to put up more industrial warehousing facilities across the country. The REIT initial public offering is targeted by 2022.
As an asset class, REIT gives investors the option to invest directly in the finished products that are already earning money—such as office units, hotels, shopping malls, industrial properties, residences for rent or even infrastructure ventures like toll roads and power plants—and not just in the property developer itself. This instrument is meant to attract investors because the Philippine REIT law of 2009 requires the distribution of at least 90 percent of income annually.