September 01, 2014

DD takes over Skysuites project

DoubleDragon Properties Corp (DD) has signed a deal with a local bank to take over the construction of a mixed-used project in Quezon City. Billed as the Skysuites, the unfinished project was previously foreclosed by the said bank from the original developer. It will have two towers which will include a 38-storey commercial, office and residential tower.

DD will resume the construction and sale of the remaining inventory of residential units and will keep the commercial and office space for recurring rental income. Based on its press statement, DD expects some income stream from the project by 2H14 and hopes to generate P5.2b in total revenues from the project.

Our take: Since its IPO, DD has taken solid steps in boosting and diversifying its revenues streams. Aside from its plans to build community malls, DD has been acquiring either existing assets for renovation or nearly-completed projects in generate additional revenues and diversify its income sources.

While it is too early to determine the potential contribution of these projects, engaging in bigger acquisitions should enable the company to scale up its revenue and income base sooner than expected by the market. Its acquisition of investment assets should also enable it to build a base of recurring income sources that can generate the cash flows to finance its plan to put up 100 community malls in five years. – WealthSec