Investor FAQs

• Reputable Sponsor in DoubleDragon Properties Corp with proven real estate management capabilities. The Sponsor is an emerging real estate company aiming to become one of the leading property players in the Philippines with the highest percentage of recurring revenue from its portfolio of leasable properties. The Sponsor has enjoyed a strong track record of growth in recurring revenue (c.653x from 2014 to 2019) and growth in leasable area (c.67x growth from 2014 to 2019)
• DDMP REIT offers investors exposure to Philippines robust economic outlook and growth in office market in the Bay Area in Metro Manila
• DDMP REIT portfolio comprise DD Meridian Park, a flagship freehold strategically located development consisting of grade A buildings which give investors exposure to the robust growth of the office market in the Bay Area in Metro Manila.
• DDMP REIT offers quality tenant base from diversified sectors with no leases expiring until 2022.
• DDMP REIT offers stable distribution with strong and visible organic growth with a total return in 2021F of 12.3% (2021F yield of 5.0% with a dividend yield growth of 7.3%)
• DDMP REIT has quality pipeline assets offering visible growth opportunities through DoubleDragon Tower and Ascott-DD Meridian Park
• DDMP REIT has an experience and committed professional management team with over 320 years of accumulated experience and strong interest alignment with shareholders.

• The IPO Portfolio was selected to provide a combination of stability and growth:
  • Stability: As of 30 June 2020, The WALE (by GLA) of commercial office Committed Leases and overall Committed Leases of the Properties stood at 4.3 years and 4.1 years, respectively, with significant lease expiries only happening from 2023 onwards.
  • Growth: The Properties are well-positioned to experience strong organic growth delivered through built-in rental escalations which generally ranges from 5 – 7 %. This embedded rental escalation provides a visible and growing rental income stream.

As a REIT, we are focused on the sustainability of the REIT over the longer term.

Yes, DDMP REIT believes that DoubleDragon Tower and Ascott-DD Meridian Park are potential expansion projects to add to its asset portfolio once cashflows from operations of these properties stabilize.

DoubleDragon intends to invest its net proceeds in four (4) office towers in Metro Manila, two (2) hotel properties located in Boracay and in Mactan, Cebu and twenty (20) warehouse complexes located all over the Philippines through an equity infusion in its subsidiary, CentralHub Industrial Centers Inc. (“CHICI”).

Unlike Ayala REIT that only owns the leases and cashflows of the asset, DDMP REIT will own both the freehold land and buildings of the Sponsor’s flagship project in Metro Manila.

• The mandate primarily focuses on commercial properties (including industrial properties), but may be related to other types of real estate properties, including retail, residential, hospitality, industrial
• The Company’s other investment criteria are: Grade A, centrally located (prime location in either Metro Manila or key provinces in the Philippines), stable occupation and income producing properties.

• The Manila Bay Area gain recognition as one of the fastest emerging CBDs in Metro Manila since it first launched back in 2007. It has grown 23.2% annually since then to 2020 and will continue to grow for about 14.69% annually up to 2023. Despite the rapid growth, vacancy rate in Bay area (3.2%) remained below that of the overall Metro Manila market (4.9%) as of 2Q2020.
• The fast-paced growth can be attributed to the strategic location of the Manila Bay Area. Key factors that helped in making these growth rates possible are:
  • Near the rich talent pool of southwestern cities of the Province of Cavite and Las Piñas.
  • Improved infrastructure due to connection to major roads
  • Proximity to the City of Manila
  • Wider Road Network to improve traffic conditions
  • Preferred location of the Philippine Offshore Gaming Operators

• The Company believes that the COVID-19 outbreak has not materially and adversely affected its operations. The Company’s Properties, DoubleDragon Plaza, DoubleDragon Center East and DoubleDragon Center West have continued to be operational. The Company anticipates that its rent income for the second half of 2020 will remain stable as a majority of its lease contracts have fixed rates, and are covered by postdated checks, ample security deposits and advance rentals for the duration of their lease terms.
• Despite this challenging business environment brought about by the COVID-19 pandemic, the Company does not expect any going concern issue affecting its business operations, and considers the events surrounding the COVID-19 outbreak to not have any material impact on its financial position and performance.
• The Company has also taken and continues to take the following measures for the protection of its employees, guests and clientele:
  • strict observance of social distancing at all times inside the Company’s headquarters which was designed with a minimum one-meter distance in between employees’ workspaces;
  • 70% alcohol solution and sanitizers are provided free of charge in essential areas of the Company’s commercial, office buildings and hotels;
  • temperature monitoring is conducted at the entrances of all the Company’s office towers including the Company’s headquarters;
  • provisions were given to all the Company’s employees for the purchase of multivitamins, hygiene products and other necessities to boost the immune system and promote good health and proper hygiene;
  • reduced and alternate break schedules for the Company’s headquarters to minimize the flow of employees entering and exiting simultaneously; and
  • employees have been encouraged to hold meetings and interviews virtually and share important announcements via email instead of physically congregating.
• The Company’s operations have remained uninterrupted with stringent monitoring in place covering the production of employees. The Company continues to remain vigilant in upholding the health and safety of its employees. The Company closely monitors updates from the Philippine Department of Health and other reliable sources publishing information regarding COVID-19 and shall continue comply with all Government-mandated measures relating to COVID-19.

• Proactive asset management and asset enhancement strategy. The Fund Manager will actively manage the Company’s property portfolio to achieve growth in revenue and Net Operating Income and maintain optimal occupancy levels. The Fund Manager and the Property Manager will help drive organic growth, build strong relationships with the customers of the Properties, and seek enhancement and growth opportunities within the existing Properties.
• Investments and acquisition growth strategy. The Fund Manager will achieve portfolio growth through the acquisition of quality income-producing commercial properties that fit within the Company’s investment strategy to enhance total return for REIT shareholders and increase potential opportunities for future income and capital growth. In executing this strategy, the Company will endeavor to acquire properties situated in high-growth areas, whether from the Sponsor, its Subsidiaries or Affiliates, or third parties, to cater to economic growth.
• Capital and risk management strategy. The Fund Manager will seek to manage and source capital in order to maximize overall returns for REIT shareholders. This may include accessing various capital markets to source appropriately priced and structured debt and equity, monitoring and implementing hedging arrangements as well as assessing alternative forms of capital and other capital management strategies where appropriate. The Fund Manager may use financial instruments such as interest rate swaps to hedge certain financial risk exposures.

In addition, the Company owns the underlying land of DD Meridian Park on a free-hold basis (separately valued at PHP5.2bn), which includes 2 development properties, DoubleDragon Tower and Ascott-DD Meridian Park leased out to DD Tower Inc and DDMP Serviced Residences. Both lessees are JVs owned 70% by the Sponsor and 30% by the Spouses Yujuico.

• Typical clauses for office tenants:
  • Rental escalation which typically stipulates annual rental escalation ranging from 5 – 7% Security deposit, which ranges from 5 – 12 months
  Advance rent, typically 3 months Post-dated check, which typically covers the entire duration of the lease term

• Competitors would be other Grade A commercial property operators in the vicinity, such as Federal Land, SM Prime Holdings Inc., D.M. Wenceslao., Green Asia Resources Corporation and Prince Alumer Development Corporation.
• The Company believes the location of DD Meridian Park offers it a competitive advantage over those of its competitors because it is at the entrance of the Bay Area and closer to the transportation hub being at the corners of Roxas Boulevard, EDSA Extension and Macapagal Avenue.

The Sponsor has a proven real estate management capability. The Sponsor is an emerging real estate company aiming to become one of the leading property players in the Philippines with the highest percentage of recurring revenue from its portfolio of leasable properties. The Sponsor has enjoyed a strong track record of growth in recurring revenue (c.653x from 2014 to 2019) and growth in leasable area (c.67x growth from 2014 to 2019)

The Sponsor has a proven real estate management capability. The Sponsor is an emerging real estate company aiming to become one of the leading property players in the Philippines with the highest percentage of recurring revenue from its portfolio of leasable properties. The Sponsor has enjoyed a strong track record of growth in recurring revenue (c.653x from 2014 to 2019) and growth in leasable area (c.67x growth from 2014 to 2019)

• There is only 1 POGO tenant and the management believe that replacement tenant(s) can be brought in during the period covered by the security deposit should the tenant terminate the lease.
• Such risks are mitigated by requiring up to 12 months of security deposit for POGO and gaming-related tenants and post-dated cheques for entire duration of the lease.

• DDMP REIT has no borrowings at IPO. Nevertheless, the Fund Manager would monitor and optimize the capital structure should the opportunity arise.
• As DDMP REIT has no borrowings at IPO. Should the REIT be rated, a rated REIT with an investment grade rating would be allowed to leverage up to 70%.

• In Projection Year 2021, and Projection Year 2022 the Company expects to distribute 100% of its AFFO and greater than 99% of its Distributable Income.
• The Company has adopted a dividend policy in accordance with the provisions of the REIT Law, pursuant to which the Company’s shareholders may be entitled to receive at least 90% of the Company’s annual Distributable Income. The Company intends to declare and pay out dividends on a quarterly basis each year.