Jollibee, DoubleDragon team up for first industrial REIT IPO

Jollibee Foods Corporation and DoubleDragon Properties Corporation teamed up for the Philippines' first industrial real estate investment trust (REIT).

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, which will eventually go public in 2022.

CentralHub is envisioned to be a company developing industrial warehouse complexes which will house cold storage and logistics centers for commissaries.

Jollibee will acquire 1.56 billion common shares of CentralHub and infuse its 16.4 hectares of industrial properties currently used by its commissaries. The portfolio of industrial properties to be infused into CentralHub includes the largest operating commissary of Jollibee.

The additional commissary assets to be infused will then increase CentralHub's total industrial land portfolio to 39.8 hectares.

Jollibee chairman Tony Tan Caktiong said the transaction will "reduce assets tied to real estate properties by converting some of them into securities in REIT and by selling others directly to third parties."

"We will use the proceeds from the eventual IPO (initial public offering) 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."

He added that CentralHub will have its own property and fund managers who are separate from Jollibee to allow them to focus on growing its core business in food service, restaurant operations, and food processing.

"Not only will this partnership between DoubleDragon and Jollibee bring forth many benefits to both sides but it will also accelerate CentralHub's goal to become the first and the largest industrial real estate investment trust in the Philippine Stock Exchange," said DoubleDragon chairman Edgar Sia II.

Jollibee currently has 17 brands in 33 countries with a total of 5,815 stores worldwide.

Meanwhile, DoubleDragon has its own REIT which debuted last March. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

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