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The DoubleDragon story

There is a new conglomerate in the making.  In five years if not earlier, it could become larger than older and bigger companies like Megaworld and Robinsons Land.

I am talking about DoubleDragon Properties Corp., the company founded by Edgar “Injap” Sia II who became the country’s youngest billionaire when he sold 70 percent of his Mang Inasal chain of restaurants to Jollibee Foods Corp.  for a whopping P3 billion. 

In 2016, Injap sold his remaining 30 percent to Jollibee for P2 billion, making Mang Inasal 100-percent owned by JBC.  Mang Inasal became the fastest growing fast food property of JFC.  Mang Inasal is now the third largest restaurant chain of JFC, after Jollibee hamburger restaurant chain itself and ChowKing Chinese fast food.

Today, DoubleDragon is the Philippines’ fastest-growing property company—in revenues, profits, and acquisitions.  In the past two years, it also has given investors the second best yield, among the property companies.

DoubleDragon Properties Corp. is a narrative of unprecedented growth and sharp focus.  And if you believe investors and analysts, it is the best company to invest in—today and in the coming years.

Injap owns 37 percent of DoubleDragon.  Jollibee founder Tony Tan Caktiong owns another 37 percent.  The remaining 26 percent is in the hands of the public.

DoubleDragon’s biggest subsidiary, CityMalls, is owned 34 percent by SM Investments Corp., the Philippines’ largest conglomerate whose owner, Henry Sy Sr., is the country’s richest individual.

In capital gain yield to investors, DD is the second best after Henry Sy’s SM Prime.   Barely eight years old, DD clearly now is in the Big League.  It is disrupting businesses once dominated by the Big Boys—malls or retail leasing, office space leasing, hotels, and even a new area, the wholesale rental of factory buildings and warehouse sites.

In 2014, net income was only P140 million.  This rose last year to a whopping P1.4 billion. By 2020, profits will hit P5.5 billion.  That’s an average growth in profits per year of a colossal 638 percent.

In market value, between end-December 2015 and Oct. 9, this year, DoubleDragon has appreciated by a sterling 78.9 percent.  Your P1,000 invested in December 2015 would be worth P1,789 today.

Compare that capital gain to those of DoubleDragon’s bigger and older listed rivals during the same 21-month period— Henry Sy’s SM Prime 59.6 percent; the Zobel-Ayala family’s Ayala Land 24.5 percent, Andrew Tan’s Megaworld 24.23 percent, and John Gokongwei Jr.’s Robinsons Land, a measly five percent.

DoubleDragon’s investors seem to be seeing something they don’t find in other once-venerated real estate companies, except SM Prime.  They want to cash in on DoubleDragon’s enormous potential for phenomenal growth and the equally huge profits and market power that its progress will invariably trigger.

In three years, DoubleDragon wants to be the leader or No. 1 in four major areas of real estate—community malls or retail leasing, office leasing, hotels, and industrial leasing.

DoubleDragon wants to be the Philippines’ largest mall developer and owner—100 in five years or until 2020.  So far, the company has opened 23 malls and is building 37 more. It has bought the one-hectare chunks of land for 63 malls. 

The malls are located in what Injap calls Tier 2 and Tier 3 cities, urban areas with a population of 50,000 to 500,000 which are ignored by the big mall developers but which are located along major roads and where purchasing power could be strong, thanks to P1.3 trillion in remittance money sent by 12 million overseas Filipinos.

It takes only 18 months to build a one-hectare mall from construction permit to commercial operation.

A CityMall covers 10,000 square meters or one hectare.  About 30  percent of that is allotted for the SM Supermarket SaveMore.  The remaining 70 percent is shared by Jollibee Food Corp.’s main fast food brands—Jollibee, Mang Inasal, Chowking, Greenwich Pizza and sometimes Highlands Coffee, Pho 24, Red Ribbon, Dunkin’ Donuts, and Burger King.    Plus the brands of the SM group—BDO, China Bank Savings, Watsons Drug Store, SM Appliance, and Ace Hardware, along with outlets like Expressions bookstore.  

Such anchor tenants guarantee strong foot traffic and consumer spending by meeting the basic needs of the average Filipino family in a suburban community – money, food, medicines, appliances, home maintenance, and reading materials.  Occupancy averages above 90 percent.

In office rental business, DoubleDragon is offering for lease up to 1.2 million square meters by 2020.

This early, DoubleDragon has lined up 327,000 square meters of space, under two major projects—the DD Meridian Park, and the Jollibee Tower. 

Owned 70 percent by DoubleDragon, DD Meridian will have 280,000 sqm of leasable space in the Manila Bay area, Pasay City.  With 90 percent completion, the first phase will be completed in the fourth quarter 2017, the second phase in 2019.

Half-finished Jollibee Tower is a Grade A 41-story commercial and office tower with 47,909 sqm of leasable space in the heart of bustling Ortigas central business district.  Completion date for the joint venture between DD and Jollibee Foods Corp. is 2018.

Meanwhile, DoubleDragon wants 5,000 rooms under management in three years.  That will make the barely eight-year-old company one of the three largest hotel operators in the Philippines, in league with Andrew Tan’s group and that of taipan Henry Sy.  Injap says all 5,000 rooms will be completed in three years; more than 800 are already operational. Tan’s Alliance Global wants to ramp up the number of its 12,000 hotel rooms by 2020, from 2,393 at present. The Ayala group operates 2,477 hotel rooms.  SM Group has about 1,510 hotel rooms at present.

Finally, DoubleDragon is creating an entirely new business—the leasing of space for factories, warehouses, commissaries, and logistics operations.

The company has just acquired 6.2 hectares from Hacienda Luisita Industrial Park in Tarlac.  Four other sites are being eyed—in rest of Luzon, the Visayas, and Mindanao.

 

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Topics: Tony Lopez , The DoubleDragon story , DoubleDragon Properties Corp. , Edgar “Injap” Sia II , Mang Inasal , Jollibee Foods Corp.
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