DoubleDragon eyes first industrial REIT IPO in 2025

Easing interest rates and heightened investor appetite for real estate investment trusts (REITs) have pushed DoubleDragon Corp. to pursue the stock market debut of its industrial warehouse subsidiary next year and raise new capital for expansion into other sectors.

The property venture of tycoons Edgar Sia II and Tony Tan Caktiong on Friday said the 2025 listing of CentralHub Industrial Centers Inc. would pave the way for the country’s first industrial REIT.

READ: DoubleDragon promises 8% yield for fresh P10-B bond offer

CentralHub currently has 60.57 hectares of industrial assets, including the largest commissary of homegrown fast-food giant Jollibee Foods Corp. (JFC). It plans to expand its P24.8-billion leasing portfolio in preparation for next year’s listing, DoubleDragon said in a stock exchange filing.

“With interest rates now starting to consistently decline, the REIT listing of [DoubleDragon’s] industrial warehouse subsidiary, CentralHub, may push through by the second half of 2025,” DoubleDragon noted.

Interest rate cuts typically signal better market conditions as they spur consumer spending and raise overall investor confidence in equities.

In June 2021, Tan Caktiong-led JFC acquired an initial 38.71-percent stake in CentralHub for P1.92 billion, thus introducing the tycoon’s newest partnership with Sia. JFC had agreed to infuse industrial properties into CentralHub.

Diversifying local market

With Donald Trump’s recent win in the US presidential elections potentially increasing risks for other assets, investor appetite for REITs has been notably high, making CentralHub’s upcoming initial public offering (IPO) attractive, said Jose Antonio Cipres, research analyst at stock brokerage house AP Securities Inc.

“REITs are essentially an investment vehicle [that] can serve as an alternative to bonds, which is recognized as an asset that carries less risk than equities,” Cipres said in a text message.

Capital raised from the IPO would likewise support warehouse expansion that would eventually help generate earnings, he added.

READ: DoubleDragon selling bonds anew to fund expansion

Juan Paolo Colet, managing director at investment bank China Bank Capital Corp., noted that an industrial REIT would likewise “help diversify our local REIT market,” which is mostly composed of office and mall assets.

DoubleDragon pointed out that CentralHub’s stock market debut, along with the Nasdaq listing of subsidiary Hotel101 Global, was expected to boost its balance sheet.

DoubleDragon reported an income of P2.53 billion, a modest 2.4-percent increase, during the nine-month period ending in September.

This was due to a 4.46-percent rise in revenues to P6.42 billion, according to the property developer.

Total equity reached P94.9 billion, drawing DoubleDragon closer to its goal of exceeding the P100-billion equity mark this year.

Earlier this month, DoubleDragon kicked off its P10-billion bond offer to raise funds for its expansion plan for condotel chain Hotel101.

The bonds, which will mature in five and a half years, will be offered until Nov. 20 and listed on the Philippine Dealing and Exchange Corp. on Nov. 25.

This is “expected to be the very last 8-percent yield peso retail bond offering [of DoubleDragon] over the long term,” the company said. —Meg J. Adonis