Monday, March 8, 2021

DDMP REIT to go on IPO at Php 2.25 per share

DDMP REIT, Inc., the second Real Estate Investment Trust in the Philippines, will begin selling its public stocks through Initial Public Offering on 10-15 March 2021 at 2.25 pesos per share. The stock is expected to be listed on the main board of the Philippine Stock Exchange and be available for trading at the secondary market on 23 March 2021 under the symbol DDMPR. DDMP REIT, Inc. formerly known as Double Dragon Meridian Park Development Corp., is owned by the Double Dragon Properties, Inc. founded by Edgar “Injap” Sia II and Tony Tan Caktiong.

What is REIT?

According to RA No. 9856 or the Real Estate Investment Trust (REIT) Act of 2008, a REIT “is a stock corporation established within the Corporation Code of the Philippines and the rules and regulations formulated by the [Securities and Exchange] Commission principally for the purpose of owning income-generating real-estate assets. For the purpose of clarity, a REIT, although designated as ‘trust’, does not have the same technical meaning as ‘trust’ under existing laws and regulations but is used herein for the sole purpose of adopting the internationally accepted description of the company in accordance with global best practices.” REIT companies develop real estate companies which will generate income from lease and other uses. 

DDMP REIT Portfolio

DDMP REIT, Inc. was incorporated in 2014. According to the Business Profile of the company posted on its website DDMP REIT, Inc.’s property portfolio consists of six towers with retail components in the Double Dragon Meridian Park together with the Park’s underlying land in Pasay City. These towers include the DoubleDragon Plaza (11,377 sq. m. Gross Leasable Area), DoubleDragon Center East (16,197 sq. m. Gross Leasable Area), DoubleDragon Center West (16,815 sq. m. Gross Leasable Area), DoubleDragon Tower (expected 37,958 sq. m. Gross Leasable Area plus additional 2,786 sq. m.), and Ascott-DD Meridian Park.

Prospect for DDMPR in the Stock Market

There are four strengths of the DDMPR for stock traders. First, the IPO is set at PhP 2.25 per share. At this price point, investment is very affordable. It is also not intimidating even for those who are just starting out and still testing the waters in the stock market.

Second, DDMP REIT, Inc. offered 5,942,488,469 of its 17,827,465,406 common shares for public ownership, with an over-allotment option for up to 594, 248,847 common shares. These represent a free-float level of 33.33%, or up to 36.67% if the over-allotment option is accounted. This high free-float level translates to more shares available for trading in the secondary market, and a prospect of higher chance for higher capital gains if the stock is actively traded.

Third, REIT companies are required by law to give dividends to investors. Section 7 of the REIT Law provides that, “A REIT must distribute annually at least ninety percent (90%) of its distributable income as dividends to its shareholders not later than the last day of the fifth (5th) month following the close of the fiscal year of the REIT. Subject to the provisions of this Act, the dividends shall be payable only from out of the unrestricted retained earnings of the REIT as provided for under Section 43 of the Corporation Code of the Philippines. The percentage of dividends received by the public shareholders to the total dividends distributed by the REIT from out of its distributable income must not be less than such percentage of their aggregate ownership of the total outstanding shares of the REIT. Any structure, arrangement or provision which would have the effect of diminishing or circumventing in any form this entitlement to dividends shall be void and of no force and effect.

Distributable income excludes proceeds from the sale of the REIT’s assets that are re-invested by the REIT within one (1) year from the date of the sale.” This means that investors are guaranteed to receive dividends from their investment. AREIT, Inc., the first REIT listed in the Philippine Stock Exchange, gave a total of PhP 0.93 per share in 2020 in three tranches. Against its price per share of PhP 33.55 as of 8 March 2021, the dividend translates to around 2.78%.

Lastly, DDMPR, like other stock investments that are built on trust, DDMP REIT, Inc. is a name that inspires confidence. Being the brainchild of Injap Sia (founder of Mang Inasal) and Tony Tan Caktiong (Founder of Jollibee), DDMPR can be compared to Double Dragon Properties, Inc. that debuted in 2014 and the Merry Mart Corp. which debuted in 2020 amidst the COVID-19 pandemic. As of 8 March 2021, the price of stocks of these companies have risen to approximately 600+% and 400+%, respectively. If DDMPR follows this trend, capital gains will be lucrative. Coupled with the dividend, an investment in DDMPR will be a profitable venture.

DDMP REIT to go on IPO at Php 2.25 per share

DDMP REIT, Inc., the second Real Estate Investment Trust in the Philippines, will begin selling its public stocks through Initial Public Off...