DoubleDragon expands to industrial leasing

Property developer DoubleDragon Properties Corp. is set to roll out an industrial leasing business as the “fourth leg” of its strategy meant to grow its leasing portfolio and recurring revenue stream, company chair and CEO Edgar Sia II said.

Speaking to the Inquirer in an interview, the businessman said the new venture called CentralHub Philippines would initially add 100,000 square meters (sq m) in leasable space to the firm’s inventory by 2020.

Sia said he envisioned a nationwide chain of industrial parks that would cater to the needs of large locators who needed standard “multiuse” warehouses suitable for commissaries, cold storage facilities and logistics centers.

“The current supply of warehouses available around the country are old and not designed according to the specifications that companies need today,” the DoubleDragon chief said, explaining that most were ill-suited to the demands of modern logistics given their poor ventilation, uneven flooring, low headroom and limited size. “What we will offer are modern facilities which companies can outfit according to their needs.”

The company is eyeing five major sites across Luzon, Visayas and Mindanao, with the first location being a 6.2-hectare property in Tarlac province that is already recognized as an industrial park by the Philippine Economic Zone Authority.

Depending on how large a particular client is, DoubleDragon may build warehouse facilities on the site according to the specifications requested by the lessee.

“Ultimately, our goal is to have a leasing portfolio of 1.2 million sq m by 2020,” Sia said, explaining that CentralHub would be the fourth leg of its recurring revenue improvement strategy that included plans for a total of 5,000 rooms for its hotel business; 300,000 sq m from its DD Meridian Park office complex in Pasay City; and 700,000 sq m from its nationwide chain of CityMalls.

By 2020, the company will be sourcing 90 percent of its revenue from recurring sources, representing significant departure from its current structure of having 70 percent of sales coming from non-recurring sources.

“We are very focused on this goal,” he said.

DoubleDragon is in the process of raising P7.5 billion in fresh capital through a re-initial public offering (IPO).
Unlike the P1.16-billion IPO conducted in 2014, which was entirely taken up by domestic retail investors when the firm was smaller, the follow-on offering also aims to attract foreign institutional investors.

The follow-on offering will involve a primary offer of up to 135 million common shares at an offer price of up to P50 per share, plus an over-allotment option of up to 15 million shares to be listed on the Philippine Stock Exchange.