Jollibee Foods Corporation and DoubleDragon Properties Corporation teamed up for the Philippines’ first industrial real estate investment trust (REIT) called CentralHub.
In a stock exchange filing on Thursday, July 8, the companies said they signed a P3.97-billion binding agreement to transform DoubleDragon’s industrial leasing subsidiary called CentralHub Industrial Centers into a REIT company. CentralHub will eventually go public in 2022.
CentralHub is a company developing industrial warehouse complexes that will house cold storage and logistics centres for commissaries.
Under the agreement, Jollibee will inject 16.4 hectares (164,000 square meters) of industrial properties, said Double Dragon. These currently are used as commissaries in exchange for shares in CentralHub.
Including the Jollibee assets, CentralHub will have an industrial portfolio totalling 39.8 hectares. These properties are suitable as warehouses, commissaries, cold storage facilities and logistics distribution centres. Above all, this portfolio makes it the country’s largest industrial REIT.
“CentralHub (will) become a major recurring income contributor to DoubleDragon,” said Sia, 44, DoubleDragon chairman.
CentralHub is not the first Sia and Jollibee tie-up
An aspiring architect, Sia dropped out of college to set up barbeque chicken restaurant chain Mang Inasal. He eventually sold the chain to Jollibee in 2012. Sia founded Double Dragon Properties in 2009. He eventually took DoubleDragon public in 2014. Sia has a net worth of $700 million. He is ranked No. 21 in the Forbes wealthiest Filipinos list.
Above all, CentralHub will provide Jollibee with a vehicle to raise funds to finance its expansion plans in the Philippines and overseas.
“We will use the proceeds from the eventual IPO of CentralHub to finance real estate investments for our new stores and commissaries, which we will convert again into more investments and shares in the REIT,” Tan Caktiong said in a separate statement. “The REIT will help continuously finance our future expansion.”
“Not only will this partnership between DoubleDragon and Jollibee bring forth many benefits to both sides. It will also accelerate CentralHub’s goal to become the first and the largest industrial real estate investment trust in the Philippines Stock Exchange,” said DoubleDragon chairman Edgar Sia II.
At the moment, Jollibee has 17 brands in 33 countries with a total of 5,815 stores worldwide.
Meanwhile, DoubleDragon has its own REIT, which debuted last March.
In conclusion, CentralHub news is exciting the Filipino REIT and shares market.