MANILA, Philippines – DoubleDragon Properties Corporation saw its net income jump by 349% in the 1st 3 months of the year to P744.5 million, from P165.6 million in the same period a year ago, driven by its rental income business.
DoubleDragon told the Philippine Stock Exchange (PSE) on Tuesday, May 15, that its recurring revenues surged 173.77% to P531.38 million for the 1st quarter of 2018, as rental income jumped 291.9% to P409.71 million.
The listed property developer said its recurring revenues now account for 29% of its total revenues.
By 2020, DoubleDragon wants its recurring revenues to account for 90% of its total revenues. (READ: DoubleDragon plans 3.9-hectare industrial hub in booming Iloilo)
"This quarter is quite significant for DoubleDragon as it is the first time we have exceeded P500 million in recurring revenue in just 3 months time, marking the beginning of the realization of the projects we have been building," DoubleDragon chairman Edgar "Injap" Sia II said in a statement.
"The company is now starting to harvest the capital investments we have deployed in the last 3 years. The cashflow that our current projects are now generating will be reinvested into further growing our leasable portfolio as originally intended," he added.
Bulk of DoubleDragon's leasable portfolio still remains in retail, with 29 operational community malls nationwide.
All operational community malls under the brand CityMalls are leased out 95%, on average, as of the 1st quarter of the year.
By the end of 2018, DoubleDragon aims to have 50 CityMalls.
Risk of rising interest rates
Four office towers of DoubleDragon Plaza, the 1st phase of DD Meridian Park, are now 98.2% leased out. Sia said it will "substantially contribute to consolidated rental revenues starting this year."
Meanwhile, DoubleDragon said it has mitigated the risk of rising interest rates to the company's operations. (READ: Bangko Sentral ng Pilipinas hikes interest rates for first time since 2014)
"We anticipated early on that one of the key risks to our business would be the rising interest rate environment. We have mitigated this risk by favoring fixed rate funding for all of our fundraisers," Sia said.
"With benchmark interest rates rising for the first time since 2014, we now reap the rewards of our prudency," he added.
Sia said DoubleDragon has been "very deliberate" in all of its fund-raising activities to match tenors with the return profile of projects.
"We have ensured that we have no key maturities until 2021. By then, the 1.2 million square meters of leasable space we are building is expected to fully contribute," he added. – Rappler.com