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DoubleDragon ramps up expansion of CityMalls

Posted on January 05, 2016 10:44:00 PM [ BusinessWorld Online ]
By Krista A. M. Montealegre, Senior Reporter
DOUBLEDRAGON Properties Corp., the real estate firm owned by the founders of Jollibee and Mang Inasal, may hit its target to build 100 branded community malls ahead of its 2020 target, a top official said on Tuesday.


DoubleDragon Chairman and Chief Executive Officer Edgar Sia II told reporters the company will spend an annual P10 billion until 2017.

The developer hopes to close 2016 with 30 CityMalls, with 25 outlets to be opened in addition to the five that started commercial operations last year.

“If we open at this pace of 25 [CityMalls] a year, hopefully if we maintain that pace, that’s 2019. At least we have a one-year buffer with our 2020 goal,” Mr. Sia said.

By 2020, DoubleDragon plans to build a recurring income portfolio with a total leasable space of one million square meters mainly through its 100 CityMalls, envisioned to be the country’ largest chain of branded community malls.

Other sources of leasing revenues will come from the DD Meridian Park, a 4.8-hectare (ha) mixed-use development in Pasay City, and the Jollibee Tower, the future headquarters of the Jollibee group in Ortigas.

Rental income from these projects will allow DoubleDragon to reach a net profit of P4.8 billion by 2020, Mr. Sia said, noting that the leasing business will start contributing significantly to net income and revenues this year.

“Our goal is to have 90% of revenues and net income by 2020 come from recurring sources,” Mr. Sia said. The company is no longer looking at acquiring residential projects after taking over existing developments in the past several years.

DoubleDragon has secured 41 sites in second- and third-tier cities for its CityMalls, ranging from 1- to 1.5-hectares in size, Mr. Sia said, adding that landbanking has become more challenging amid increasing competition from other property firms.

“We’re continually acquiring sites because we build our barrier by acquiring the last remaining prime properties. It’s not easy [to buy land but] if it’s difficult for us, it will be impossible for the next one,” he said.

The five CityMalls in operation are located in Roxas City, Capiz; Jaro, Iloilo City; Consolacion, Cebu; Tetuan, Zamboanga City; and Imus, Cavite.

Asked to comment on the performance of its first five CityMalls, Mr. Sia said: “I think it’s aligned with our expectations. As per our vision, CityMall will eventually become the center of gravity of the towns and cities where we build.”

Meanwhile, shareholders of DoubleDragon approved yesterday the amendment to its Articles of Incorporation, boosting the authorized capital stock of the firm to P20.5 billion from P500 million.

The capital stock hike will set the stage for the creation of preferred shares, which will be issued in “March or April,” Mr. Sia said.

DoubleDragon plans to raise P10 billion from the sale of 100 million non-voting preferred shares at P100 apiece. The proposed equity offering includes an oversubscription option of up to P5 billion.

Proceeds from the share sale will be allotted for the development of CityMalls, DD Meridien Park, and the Jollibee Tower, Mr. Sia said.

DoubleDragon is a joint venture between Injap Investments, Inc. of Mr. Sia -- the founder of the Mang Inasal grilled chicken restaurant chain -- and Honeystars Holdings Corp. of Tony Tan Caktiong, chairman and founder of Jollibee Foods Corp.

Shares in DoubleDragon lost 30 centavos or 1.24% to close at P23.95 each on Tuesday.

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