DDMP REIT Posts Higher Profit in 1Q2021

The real estate investment trust (REIT) of DoubleDragon Properties Corp. DDMP REIT earned a higher profit in the first quarter of the year compared to the same period in 2020, according to Business World. With an 11.7 percent profit growth, it went from P357.8 million to P399.65 million. 

The gross amount of cash dividend totaled P358.97 million. Investors are expected to receive P0.020136 per share on the set payment date, which is June 10. This is the second consecutive cash dividend declared to the shareholders this quarter. 

In a report from Philstar, investment house Investment & Capital Corporation of the Philippines (ICCP) said that DDMP REIT offers investors stable returns amid lower interest rates, as well as a strong hedge against inflation.

Rental Income Up

The rental income of DDMP REIT also climbed by 1.82 percent, amounting to P508.59 million from P499.52 million in the same mentioned period. About 97 percent of the company’s assets are leased out, flexing stability amid the pandemic.

From the last quarter of 2020 to the first quarter of the year, the total assets of DDMP REIT climbed by 0.91 percent from P45.35 billion to P45.77 billion. The total equity posted an uptick of 1.13 percent amounting to P35.92 billion.

The company’s portfolio consists of properties located in DD Meridian Park, a commercial zone located along the corners of the main roads of Macapagal Avenue, EDSA Extension, and Roxas Boulevard in the Bay Area. They are office towers with retail components, namely DoubleDragon Plaza, DoubleDragon Center East, and DoubleDragon Center West.

REITs Primary Driver

The growing REIT market in the country will likely be complemented by the recovering business process outsourcing (BPO) sector. Last month, the Asia Pacific Real Estate Association (APREA) said that the industry will provide backing for REIT companies, whose assets are focused on office spaces. The group considers the sector a “catalyst” for property industry growth.

Earlier this year, the Contact Center Association of the Philippines (CCAP) shared their growth projections, saying that the BPO industry is set to hire between 80,000 to 100,000 employees this 2021, as reported by ABS-CBN News. There’s a surge in demand for workers given the need for support services in different sectors, including e-commerce, logistics, and healthcare.

Even with the continued sophistication of technology, including the introduction of chatbots and artificial intelligence, CCAP noted that BPOs still prioritize human workers. Companies are equipping employees on the use of digital and tech advancements.

The accelerated vaccination program will further rally the growth of the outsourcing industry. Manila Bulletin reported that BPO workers were recently included in the Priority Group A4, the priority group that will be immunized after frontliners, senior citizens, and people with comorbidities.

REITs Returns

As the BPO sector fuels the growth of the burgeoning REIT market, REIT, in turn, will help boost economic recovery from the ills of the pandemic. 

According to the Department of Finance (DOF), REIT will drive infrastructure modernization and expand business opportunities, Manila Bulletin reported. 

Finance Secretary Carlos Dominguez III called it “indispensable” in restoring a strong, inclusive economy for Filipinos. He noted the huge volumes of capital from REITs, which will be infused to the financial system and used for supporting long-term growth.

According to the revised rules of the REIT law, REIT sponsors are required to reinvest capital and profits to domestic real estate and infrastructure sectors. 

Global real estate services firm JLL Philippines expressed the same optimistic sentiment as DOF, saying that REITs would help the economy move past the setbacks brought upon by the pandemic, as mentioned in this Business Mirror report. 

REITs, by nature, would have properties that are transparent in income, occupancy, and prospects. Moreover, they tend to be managed and maintained better. This makes the asset attractive to investors. According to JLL, REITs will woo investors in the medium to long term and thus produce capital investments in the country.

The firm foresees more property developers using REIT in expanding their portfolio. They are a rich source of profits, which can fund future projects, accelerate construction initiatives, and generate employment opportunities. 

Set to grow further, the REIT market will soon welcome more real estate companies, including Megaworld, Robinsons Land, and Vista Land.

Sources: Business World, Philstar, ABS-CBN News, Manila Bulletin, Business Mirror

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