Real estate company DoubleDragon Properties Corp. is looking to raise P11 billion in fresh equity capital a year, or a total of P66 billion over the next six years until 2025, from its real estate investment trust (REIT) listing.
In a stock market filing on January 27, 2020, DoubleDragon confirmed that it is looking at possible REIT listing of about 1/4, or 25%, of its currently completed leasable gross floor area (GFA) portfolio, within the first quarter of 2020.
Every year from 2020 to 2025, the plan is to do REIT listing for the first 200,000 square-meter leasing asset size, which is seen to raise P11 billion of new capital for the company.
“We intend to choose the most mature assets for the first tranche of REIT listing on the first year, and then the following year choose another batch of leasable space that has ripened and matured that year,” the company said.
“We believe DoubleDragon Group is one of the very few companies in the Philippines with prime and diversified leasing hard assets,” it added.
As of Monday, January 27, the company was still firming up its final target REIT size, asset composition and timeline within the first quarter of 2020.
DoubleDragon’s real estate assets include facilities for office leasing and provincial retail leasing as well as industrial warehouses for lease and hotels. The company is behind the brands CityMall and Hotel 101, among others.
The company said these are “sunrise real estate hard assets that will not be disrupted by the foreign- owned online digital platforms selling mostly non-discretionary goods that is expected to reach its inflection growth points in the next couple of years.”
The new capital that the company shall generate from REIT will be “deployed mostly in the Philippine countryside” and, thus, boost the country’s economy.
“From 2015 to 2019 DoubleDragon has deployed its resources in acquiring and building a portfolio of prime real estate hard assets across the country. We believe this REIT avenue came just in time for DoubleDragon to begin reaping the fruits from the seeds that it has carefully planted in the past 5 years,” the company stated.
The REIT law, of Republic Act No. 9856, allows property developers to raise new equity capital through the creation of stock corporations that purchase, develop and operate income-generating real estate assets.
The public can then invest or participate in the thriving real property business by buying shares in REITs instead of buying real estate assets themselves.
The issuance a week ago of the amended implementing rules and regulations for this 11-year-old law is expected to finally allow this to take off. (Ventures Cebu)