DoubleDragon REIT debuts on PSE, raises P14.7B

Property developer DoubleDragon Meridian Park Properties’ real estate investment trust (DDMP REIT) raised the curtain on local initial public offerings (IPO) on Wednesday after completing the sale of P14.7 billion worth of shares.

On its inaugural trading day, DDMPR hit an intra-day high of P2.40 a share before ending at P2.25 a share, the same as its IPO price.

About 50,740 investor accounts participated in the IPO, a record high in the local stock market. Of these, around 15,000 are local small investors who bought using the Philippine Stock Exchange (PSE) Electronic Allocation System platform.

Due to the high volume, DDMPR’s listing on the local bourse was delayed by one day.

“Listing during a pandemic is definitely not a walk in the park, but we believe this is our share of also promoting a more inclusive economy, and that what we can achieve together now during these challenging, never-been-charted territories, brought about by this pandemic, despite those challenges, your DDMPR team will still continue to work hard to lift the company to greater heights while further solidifying its foundation year on year,” DoubleDragon chair Edgar Sia II said during DDMPR’s listing ceremony on Wednesday.

Sia was elated that majority of the DDMPR IPO subscribers could be from thousands of provincial investors who normally just park their passive funds in low-yielding bank time deposits.

Dividend yield

At the price of P2.25 per share, the projected dividend yield as stated in the REIT Plan is 5.07 percent for 2021 and 5.45 percent for 2022.

“I believe this DDMPR IPO is probably the first of its P14.7-billion size IPO in the Philippines, that the pricing and direction was driven by the fragmented small and medium investors from across the country,” Sia said.

REIT is a corporation that primarily invests in income-generating real estate such as office spaces, shopping malls, service apartments, and even hotels, hospitals and warehouses. It gives investors an opportunity to invest directly in the finished projects rather than the developer itself. This was meant to attract dividend-seeking investors because the REIT law required the distribution of at least 90 percent of income as dividends annually.

For a REIT sponsor like DoubleDragon, this new asset class allows the property developer to recycle capital for further property development and expansion initiatives.

The DDMPR basket includes the land, a premier corner lot located along the main thoroughfares of Macapagal Avenue, Edsa Extension and Roxas Boulevard, where the first six completed buildings sit on. This feature is expected to be a “game-changer” since the value of the prime double corner 4.75-hectare block of land with titled land ownership to be held in perpetuity will keep on appreciating in the coming years.

The offering had been oversubscribed by 1.78 times the base offer, allowing DDMP REIT to price the maiden offering at the maximum IPO price sought.

Credit Suisse, DBS, Nomura and PNB Capital acted as joint global coordinators and joint bookrunners for the IPO, together with RCBC Capital, ICCP, Macquarie, Maybank Kim Eng and CIMB.