The era of dragons

In Photo: DoubleDragon Plaza, the first phase of DD Meridian Park in the Bay Area, officially opens on May 7.

Inspired vision. Passionate execution.

ALTHOUGH a latecomer in the real-estate sector, a mature industry dominated by companies that have been around for decades, the entry of DoubleDragon Properties Corp. into the equation has surely caused a lot of heads to stir.

In just a little over four years, its share price has skyrocketed to over 15x its IPO price resulting to a strong base of happy investors and die-hard supporters. A partnership between the families of Jollibee founder, Tony Tan Caktiong, and Mang Inasal founder, Edgar Sia II, both aptly born on the Year of the Dragon, DoubleDragon has made a lasting impact in an industry all thought would remain rather predictable in the years to come. Rarely does one see a start-up company reach $1 billion in market capitalization, joining the big leagues, merely 18 months from its debut in the stock market. Its vision—to be one of the top 5 property companies in the Philippines by 2020.

Hannah Yulo, chief investment officer DoubleDragon Properties Corp

Hannah Yulo, chief investment Officer of DoubleDragon (and an  avid triathlete), has been primarily responsible for the company’s fund-raising activities, which has fueled its expansion toward its goal of having 1.2 million of leasable space in its portfolio by 2020.  She walks us through the journey of becoming one of the fastest-growing companies in the country.

DoubleDragon has accomplished so much in just a few short years, talk us through how this all came to be and what it took to get where you are today.

It’s been quite an exciting few years, not without its fair share of challenges. When we listed in 2014, it was pure vision, we had one piece of property at the time and no malls in operation, yet we targeted to have 100 CityMalls completed by 2020. Today, we have 63 prime commercial CityMall sites across the country and 29 operational malls with another 21 under construction all slated for completion this year. People are starting to see the substance behind the vision because we have proven our ability to execute on our plans. DoubleDragon Plaza, the first phase of our flagship Metro Manila office project, DD Meridian Park in the Bay Area, was officially opened to the public on May 7. We have completed four of the eight office towers we intend to have in our portfolio by 2020, with another three office towers scheduled for completion by the end of this year. It took unyielding focus, sheer discipline and the willful persistence of the DoubleDragon team to get us where we are today, we are extremely fortunate to be under the leadership of Injap Sia who has really catapulted to new levels.

Typical CityMall façade

Tell us about the challenges you have encountered and how you were able to surpass them.

Four years ago when we listed, we had no land bank to speak of and a tiny fraction of the money we needed to accomplish all we had set out to do. We have since then raised over P40 Billion in long term funding through diversified sources all at fixed interest rates. We issued our first convertible preferred shares in 2016, which was well received by the market, and we were also able to tap the bond market twice, which is not easy to do for a new name. We have been very deliberate in all of our fund-raising activities to ensure that the tenors match the return profile of our projects with most of the support coming from retail and institutional investors. The early start-up years are the most critical years as, we are setting the foundation for a company designed to stand the test of time. With enough anticipation and careful planning, roadblocks just become another opportunity to break through, because nothing ever worthwhile doing comes easy.

Understand DoubleDragon has recently ventured into the hospitality and industrial space; can you walk us through the rationale behind this diversification?

Our foray into the hospitality and industrial space is in line with our goal of becoming a primarily recurring revenue-focused company by 2020. We believe in the value of building a healthy base of growing recurring cashflow sourced from owned prime properties, which will appreciate over time. This type of business model will yield higher quality earnings, which may require heavy initial investment but minimal capital expenditures through the future to sustain.

Hotel101 is an interesting concept, as we presell the units during the construction period. The unit owners in return get condominium title to their respective units, which are identical across properties, enabling them to receive an equal share in a portion of the hotel’s monthly revenues once it is already operational regardless of whether their actual unit was used. Our hotel-management company operates the property and earns a healthy margin from operations, which form part of our growing base of recurring revenue. We have tested the concept with our pilot project, the 518-room Hotel101-Manila, and the formula is working, as we are able to deliver a decent return for the unit owners. Now that we have proven this win-win concept, we are ready to roll it out starting with Hotel101-Fort, which we launched just in March.

As for our industrial leasing arm, CentralHub, we aspire for it to become a leading provider of industrial warehouses in the near term through the development of an initial eight major sites across Luzon, the Visayas and Mindanao. We intend to have an initial 100,000 square meter of leasable warehouse space by 2020. We build and lease out standardized multiuse warehouses suited for commissaries, cold storage, manufacturing, logistic and distribution centers. With growth now evidently moving into second and third tier cities, demand for industrial space will just continue to rise.

DoubleDragon’s four pillars of growth continues to strengthen in provincial retail leasing, office leasing, industrial leasing and hospitality, which will provide the company with a diversified source of recurring revenues backed by a string of appreciating hard assets.

 

Turning Points 2018
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