Higher rental fees fail to buoy DoubleDragon REIT’s profits

*_{The property company of Edgar “Injap” Sia, whose listed firms made successful IPOs in the past, started the share sale of the new REIT company from March 5 to 11.}*

MANILA, Philippines — DDMP REIT Inc., the real estate investment trust (REIT) firm of businessman Edgar “Injap” Sia, saw its earnings fall by nearly a quarter last year despite capturing more tenants.

In its first disclosure of financial performance since going public last month, the DoubleDragon-backed firm reported a net income of P5.9 billion in 2020, down 24% year-on-year. Stripping out fair value gains, core net income booked a 5.89-percent annual growth last year.

The company did not explain what accounted for the slump in profits, which came despite a 7.61% annual growth in rental income to P1.9 billion due on the back of more tenants in DoubleDragon Center West, one of the properties under the company’s portfolio.

Despite lackluster profits, robust rentals were enough for DDMP to reward investors with P365 million in dividends, equivalent to P0.20047718 per share to be paid on May 10. REIT firms are mandated to share 90% of their revenues from property ventures as dividends to investors.

DDMP REIT will pay up dividends based on its financial performance last year when the firm was not yet public. Sia sees bigger payouts this quarter, based on the firm’s first quarter performance when IPO proceeds are expected to have buttressed profits.

“We expect the cash dividend value of DDMPR to start to be most efficient to benefit from the REIT incentives by the second quarter of this year…” Sia said.

After the success of Ayala-led AREIT Inc., DDMP officially became the second REIT in the Philippines through a maiden share sale that raised it P14.7 billion despite financial market volatility driven by pandemic uncertainties.

Offices spaces corner 97.23% of DDMP’s real estate portfolio that generates revenues for its shareholders, and while work-from-home arrangements have recently triggered office closures, the firm said leases “continue to remain stable.”

As of end-2020, the company’s total assets grew 7.29% year-on-year to P45.35 billion. Total equity likewise increased 13.28% on-year to P35.52 billion, financial results showed.

On Wednesday, shares in DDMP closed flat at P2.21 each.

Article and Photo originally posted by Philippine Star last April 14, 2021 2:03pam and written by Ian Nicolas Cigaral.