SHAREHOLDERS of listed real estate developer DoubleDragon Properties Corp. approved on Wednesday the plan to issue 150 million common shares in a follow-on offering to raise up to P7.5 billion for corporate requirements.
The plan is to further boost its balance sheet and increase its trading liquidity to become a component of the Philippine Stock Exchange index by 2019, the company said.
The proceeds from the share sale finance the company’s industrial leasing project and landbanking.
“For the follow-on, about P4.8 billion of the P7.5 billion is for the 100,000 square meter (sqm) industrial leasing and 5,000 rooms. The rest will be for landbanking purposes beyond our 2020 goal so we can start preparing ahead,” Chairman Edgar “Injap” Sia 2nd told reporters on the sidelines of the company’s annual stockholders’ meeting held in Makati City on Wednesday.
The company also revised its 2020 profit guidance to a net income of P5.5 billion from the P4.8 billion, and 1.2 million sqm leasable space from 1 million sqm.
Asked when the company targets launch the share sale, Sia said the company will see how the market goes.
“Depending on market condition, but hopefully this year.”
DoubleDragon recently constructed a 30,000 sqm leasing space in Luisita Industrial Park in Tarlac. The development is part of the plan to establish 100,000 sqm of leasable industrial space.
“Mostly fastfood—like the fastfood group are our big users of industrial spaces for commissaries, cold storage and distribution centers so the possible tenants are either fastfood companies, the consumer goods manufacturing companies, manufacturing plants, and logistics companies,” Sia said.
“The height is 14 meters. It’s designed for multi-use. Yes it can be a manufacturing center,” he added.
“We buy the land, build a building, and lease out. We’ll do it in four phases. So the first one will be finished already by the end of this year, because we phase it then we lease it. It only takes five to six months to build because it’s a warehouse.”
The company intends to launch eight more industrial spaces in the next few years—two each in North Luzon, South Luzon, Visayas, and Mindanao.
“We just secured so far one site as of today. We acquired the land within the PEZA [Philippine Economic Zone Authority] site. It’s a six-hectare lot that we acquired,” Sia said.
Late last month, the company returned to the bond market and raised P9.7 billion from the second tranche issuance of peso-denominated fixed retail bonds due in 2024.
The issuance is the last tranche under its P15-billion shelf registration program to fund its retail and office projects until 2020 and the construction of 10 CitiMalls across the country to raise its operating CitiMalls to 30 by the end of the year.
In the next few months, DoubleDragon is launching its first CitiMalls cinema in partnership with media giant ABS-CBN Corp.