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DoubleDragon REIT trades flat on market debut amid volatility

DoubleDragon's real estate investment trust (REIT), the country’s first initial public offering (IPO) for 2021, closed flat on its listing date on Wednesday amid a risk-off sentiment among investors due to uncertain economic conditions.

Shares of DDMP REIT Inc. opened at P2.26 apiece and reached a high of P2.40 per share before it closed at its IPO price of P2.25.

“We think that its performance was still good and allows long-term investors to have a slice of reit in their portfolio at its IPO price but with a few charges this time. REITs are good for dividend play with a long term holding period,” Philstocks Financial equity analyst Claire Alviar said.

DDMP listed its shares on the Philippine Stock Exchange on March 24, 2021, making it the second REIT to make an IPO, after Ayala Land-backed AREIT Inc. in August 2020.

The company raised P14.7 billion through the public offering. DDMP said over 50,000 total investors subscribed to its IPO.

DDMP's portfolio currently covers six office towers with retail components within the DD Meridian Park in Pasay City, with its leasing spaces catering to a mix of tenants such as business process outsourcing companies, government agencies, and corporate locators.

As mandated by the law, DDMP will distribute at least 90% of its annual distributable income as dividends. This refers to the company's net income as adjusted for unrealized gains and losses or expenses and impairment losses, excluding proceeds from the sale of assets that are reinvested within a year from the date of sale.

In his speech during DDMP’s listing ceremony, DoubleDragon chairman Injap Sia described DDMP as a “pamana stock,” “being a stock that owns the prime freehold titled land and the grade A buildings that sit on it.”

“While pamana [inheritance] is for the succeeding generations, you still get to enjoy the quarterly cash dividend benefits of your DDMP REIT investment as you temporarily hold it in behalf of your next generation. Based on DDMP’s regular cash dividend cycle, the next cash dividend is up for declaration in the next three weeks from today,” Sia said.

“Listing during a pandemic is definitely not a walk in the park, but we believe this is our share of also promoting a more inclusive economy...,” he said.

For his part, PSE president and CEO Ramon Monzon commended DDMPR as it now holds the record for the highest number of local small investor (LSI) count of 12,073 from an IPO.

Companies conducting an IPO are required to offer 10% of their shares to LSIs.

“Now, with two successful REIT IPOs within less than a year, we are optimistic that more real-estate companies will consider listing REITs. With more REIT issuances, we are not only providing companies a platform to raise capital for their expansion, we are also giving investors more investment options and we are helping the country through the reinvestment policy required from REIT issuers,” Monzon said.

Finance Secretary Carlos Dominguez III, in his recorded message, said, “At this particular time in our history, REITs are indispensable to rebuilding a strong and truly inclusive economy for our people. These will make available capital to our financial system that will help fund our long term growth.”

“The Duterte Administration ensured that all shareholder proceeds from REIT offerings will be retained within our domestic economy and used to drive our growth,” Dominguez said.

DDMP priced its IPO shares at a maximum of P2.25 apiece, finalizing the maiden offering at P14.7 billion to mark the biggest REIT offering in the Philippines so far.

At such a price, the projected dividend yield is 5.07% this year and 5.45% for 2022. — BM, GMA News