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Double Dragon steps up expansion in 2018

It is the closest to exponential growth in business. At the least, it is phenomenal.

Double Dragon Properties Corp. is stepping up its pace of property development all across the country in 2018 to meet its target of opening 600,000 square meters in leasable space with 24 new CityMalls, Central Hubs (warehousing) and commercial/office space with its Meridian property on Roxas Boulevard. Along with it are new hotel developments carrying the Hotel 101 brand.

This was revealed by Ferdinand “Toto” Sia, President of Double Dragon Properties Corp., during the opening of the 26th CityMall, and the third in Iloilo City, on March 23, 2018 in Pavia, Iloilo.

“Right now, we already have 330,000 square meters in leasable space,” Ferdinand, younger brother of Mang Inasal founder Edgar “Injap” Sia, told this writer.

The City Malls are operated by CityMall Commercial Centers, Inc., a subsidiary of Double Dragon Properties, Inc. Double Dragon owns 64% of CMCCI and 34% is owned by SM Invesments Corp.

Ferdinand said the Central Hub at the Luisita Industrial Park in Tarlac will be Double Dragon’s first venture in industrial leasing that will also spread out across the archipelago. The project will rise on a 6.2-hectare property. The company has also acquired a 3.9-hectare property for an Iloilo Central Hub. Ultimately, Central Hub Industrial Leasing Corp., the Double Dragon subsidiary that will develop these warehousing facilities, will open one facility for every province to provide support for business and industrial growth in the countryside.

But what will perhaps be its biggest leap is the opening of the DD Meridian Park on a 4.75-hectare property in the Bay Area this year. Ferdinand said the DD Meridian Park will be inaugurated on May 7 this year. Already, Double Dragon has moved its corporate headquarters to Meridian, as have the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) and 2Go Group.

The opening of CityMall Pavia also signals the emergence of Pavia municipality from a sleepy bedroom community on the outskirts of Iloilo City into a bustling business hub. Situated just on the boundary between Iloilo City and Pavia, the new CityMall will give impetus to the economic development of the LGU. Also set to open in the next two or three months are Robinson’s Pavia and GT Mall Pavia; both are located just a hundred meters from CityMall.

Four years ago, Double Dragon surprised Iloilo when it dared build the 21-story Injap Tower on the Benigno Aquino Jr. Avenue (or known locally as the “Iloilo Diversion Road”). This first-ever skyscraper was the first Iloilo building to go higher than six floors. It houses the Hotel 101, a restaurant on the top floor and other amenities. Before this, most businessmen in Iloilo believed skyscrapers were not feasible.

The Injap Tower became the trigger for the upward development of the Iloilo skyline. Right now, the 18 story SM Strata (with its high floor-to-ceiling configuration) is rising a few hundred feet above Injap Tower which is just beside it. SM Strata now dwarfs Injap Tower. Elsewhere, other high-rise buildings in Megaworld and Atria have been completed.

The boldness with which the Sia brothers, and their sister, Marissa, in partnership with Tony Tan Caktiong and his Jollibee group of food companies (Jollibee, Chowking, Mang Inasal and Highlands Coffee) has propelled Double Dragon into a path of phenomenal growth since it went public in 2014. Its first IPO offering was oversubscribed 14X even before the opening bell rang. From P2.00 per share, Double Dragon stocks were traded at P31.30 per share at the close of the Philippine stock market last Friday, March 23, 2018.

On March 2, 2018, Reuters reported that Double Dragon’s fiscal year net income rose 71.8% year-on-year to P2.53 billion.

This can only be described as amazing for Injap and Toto whose first ventures in Iloilo City back in the 1980s were a laundry business, a color photography processing lab and a small hotel (Four Season Hotel in partnership with friends). Injap, the prime mover, was already regarded as “bold” at the time. He was young and aggressive, seeming to know no fear in his pioneering ventures. His laundry business, Mr. Labada, was the first in Iloilo; many people doubted it would last. Now Mr. Labada operates several branches in Iloilo City.

But Injap jumped into the fastlane when he opened Mang Inasal in 2003. Barbecued chicken isn’t an out-of-the-ordinary recipe that held the promise of mass appeal. In Iloilo and Bacolod cities, “chicken inasal” is prepared and served almost the same way, with the difference in the marination. Somehow, Injap concocted what could be described as the “perfect recipe” for “chicken inasal” and built his chain of Mang Inasal stores on this.

And the rest is history.

This property empire that Double Dragon is building will probably be described as “the house that chicken inasal built.”

 

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Unfulfilled promises

When property developers sell subdivision lots, condominiums and other real estate property, they would always give out glossy brochures depicting a dream community where one would put his or her money to live and work.

In a mannner of speaking, property developers sell promises, because most of their sales are done even before the first bucket of concrete is poured into a building. Everything is presented from the architect’s perspective, and larger-than-life images of beautiful homes, parks, club houses, wide roads and street lights, swimming pools and other amenities are crammed into a brochure.

More than 15 years ago, this was exactly how Fil-Estate marketed the Puerto Real de Iloilo. It was billed as the most luxurious residential subdivision in Iloilo City, complete with sports and leisure facilities, well-lighted and spacious roads, mini-parks, and most importantly, adequate security to give homeowners a peace of mind.

The development came with a big bang. Fil-Estate was then riding on a property boom, and its name became synonymous with first-class living. There was an impressive kick-off party at the Amigo Terrace Hotel. All the big wigs were there.

True enough, the marketing ploy of Fil-Estate penetrated the consciousness of the moneyed-class in Iloilo City. Its subdivision lots were quickly gobbled up by rich businessmen and professionals. Living there was a stamp of class that many people desired and got. Or at least, so they thought at first.

It didn’t take long before homeowners realized they were duped.

The homeonwers at Puerto Real de Iloilo believed they paid for expensive lots to get facilities and services that would be commensurate with the price of the subdivision lots. The promised first class facilities and amenities never materialized.

Since then, Puerto Real de Iloilo was sold by Fil-Estate to the Global Estates Resorts Inc. (GERI), an affiliate of the Megaworld Corporation. Megaworld is also the developer of the Iloilo Business Park in the old Iloilo airport property and a partner in the Sta. Barbara Heights Subdivision.

A life of luxury and comfort was what the sellers promised the homeowners. For the homeowners, life in Puerto Real during the last 15 years has been like hell, a long struggle to compel the developer to make good on their promises.

What are some of the problems? For one, the club house and its amenities — basketball gym, swimming pool and tennis court — are in a state of disrepair. The roof over the basketball gym is leaking, and the other facilities neglected and badly need repair.

The road network in the posh (only in name, so the homeowners claim) subdivision are poorly maintained. At night, the roads are shrouded in darkness, and residents hardly feel safe about strolling after dinner.

Worse, there are still informal settlers in parts of the subdivision. The developer failed to provide them with relocation sites at the start of the construction. Now these people continue to live in the “pulo” where their shanty houses still stand. Some own work animals like carabaos and keep them in their compound. Puerto is where one can find carabaos loitering about, posing a grave danger to motorists.

A bigger issue is security: with poor families living in parts of the subdivision, the subdivision is having a hard time controlling the entry of people. It is a security nightmare for the homeowners.

For a long time now, the homeowners association has pressured the new management — a Megaworld affiliate — to plug the gaping holes in the contract and turn over the subdivision to them. The homeowners feel they could do a much better job looking after their own security and keeping the community clean.

The response of the Megaworld company has been to stall and delay. No progress has been made in the negotiations to bring the company to honor its commitments in the contract to sell. It continues to ignore the complaints of the homeowners.

To add to the problems of the homeowners, it was recently discovered that GERI owes the Iloilo City government more than P20,000,000 in realty taxes. The homeowners have pestered management about the tax indebtedness to the city. The overdue taxes remain unpaid until now.

The homeowners decided enough was enough. A few weeks ago, the association lodged a complaint before the Housing, Land and Urban Regulatory Board (HLURB) to seek remedial action.

Instead of trying to find ways to meet the homeowners halfway and reach a compromise, GERI retaliated by reducing the number of security guards who man the gates. It’s becoming obvious to them GERI is not repentant about its own inadequacies and downright breach of contract.

(In a statement to The Daily Guardian, Fil Estate on Puerto denied that GERI is involved in the project. This is being disputed by homeowners’ representative who talked with me.)

The message to the homeowners was loud and clear. Megaworld enjoys protection from the powers-that-be in Iloilo City, and would not budge even in the face of an administrative case. That the city government hasn’t taken legal action to enforce the P20 million tax liability is an indication that Megaworld is shielded by a culture of impunity.

This culture of impunity cannot be allowed to exist. The HLURB should strictly enforce contracts to which developers have bound themselves to fulfill. In this case, sanctions should be imposed on GERI and warnings given to other Megaworld affiliates. If HLURB rules and regulations are just scoffed at by developers like Megaworld, then property buyers who invest millions of pesos in the properties offered to them through glossy brochures are vulnerable to lose the value for which they paid for.

It is time government strengthens its capability to protect consumers. After all, a breach of contract is an assault on our legal institutions. Violators of the law such as GERI must be required to pay stiff fines and stripped of their licenses to operate. That is the only way to uphold the rule of law.

Right of way

Can a road-right-of-way on government land — or more precisely a public road — that is part of land acquired by a property developer be closed down and the area used as site for buildings?
This was a question I threw at a municipal trial court judge and two lawyers I regularly meet for bottles of beer the other night.
Their outright answer: “NO!”
Indeed, from my own layman’s understanding. a ROW should be left open even if it was part of a bigger property that was bought by a private company.
This is particularly true when the ROW was a public road for which public funds were spent to pave the same with concrete.
I am wondering what the Housing, Land and Urban Regulatory Board (HLURB) will have to say about this.
Will it mean the developer will have to demolish the structures built on the ROW?

Why the fuel price hike so soon?

Everyday I monitor Bloomberg TV to look at the major business headlines in the Asian region as well as the world stock markets. One of the things I closely watch is the price of oil in the world market. Hence, it surprised me to learn last night that fuel companies will start to increase pump prices again starting today. The local market experienced a significant slide in the prices of diesel and gasoline these past few months, easing the pain on car owners and transportation industry operators. But is that a brief honeymoon for us? There hasn’t been a significant change in the world market prices of oil. So what is the basis for the fuel price hike so soon?

Is Iloilo City headed toward a property bubble?

It’s not that I don’t want Iloilo City’s economic development to screech to a halt. But looking at the frenetic infrastructure projects now undergoing construction (private sector development), I am worried that this would lead to a property bubble. At the pace new condominiums and malls are being built, there is a real danger supply would overtake demand, and many developers will be left holding an empty bag.

The retail market, for instance, is not big enough to warrant the operation of more stores in Iloilo City. The present retail floor space that are available for rent is already more than what the market could accommodate. Just recently, SM City opened its new wing, and many store spaces are still empty. That’s not to mention a number of restaurant closures in the giant mall.

Robinson’s Mall is opening another complex in Jaro at what used to be the campus of the De Paul College. Atria has gone full blast in its operations, mostly with restaurants in Barangay San Rafael. The Florete Group of Companies is rushing the completion of its Plazuela II along the Benign Aquino Jr. Avenue. Meanwhile, Megaworld is also going full swing in its construction of its strip malls in the Iloilo Business Park.

Filinvest and Ayala Land are also racing with each other to build condominiums within a 2-kilometer radius in Mandurriao. Not too far away are condominiums of Megaworld. Also about to commence construction is the mixed-use complex of Gaisano in Bolilao, Mandurriao.

Smaller malls have also been put up in other parts of the city. Double Dragon Properties Corp. has opened its City Mall in Barangay Tagbac, Jaro. Another City Mall is slated to break ground in Barangay Ungka, Pavia before the middle of 2016. A third City Mall is going to loom large over the scenic Guimaras Strait as part of the Parola Ferry Terminal. The group of Alfonso Tan is now operating GT Mall near the Molo Plaza.

There is no mistaking that development is taking place at breakneck speed in Iloilo City. A quick glance at all these activities couldn’t fail to impress the observer. But we need to learn lessons from history — business history. Property bubbles are always a danger when development takes place at such high speed. The demand might not be able to sustain the market supply’s growth.

Among the developers, I find the Double Dragon strategy of locating its new malls in the periphery of the city more prudent. It avoids the potential congestion that might only worsen the already bad traffic situation on the Iloilo Diversion Road (aggravated by poor traffic management practices of the LGU). And as the City Malls are situated in the outskirts, they will be able to snare much of the people who want to avoid the traffic.

Of course, these developers didn’t just jump into pouring hundreds of millions of pesos in investments for malls and condominiums without extensive feasibility studies. That the developments are concentrated in the Mandurriao district seem to follow the model of Metro Manila, where malls and condominiums are built in concentric circles. The residences are  always a stone’s throw away from restaurants and shops. This is the model in Alabang, Eastwood, Greenfield in Mandaluyong and many more.

What I fear is that the buying power of Ilonggos might not be enough to fuel this growth. Even in the number of restaurants that have opened for business, one can easily see that customers flock to the newer ones, leaving the older restaurants with fewer diners. The dining market base hasn’t grown that much to make the opening of more restaurants viable. It’s the same way with shoppers.

I would want to see this growth sustained. The LGU should be laying the foundation for increasing the buying power of its people. Unfortunately, that is not happening. There are no industries that could provide good paying jobs for the people. If there are jobs being created, these can be found in the services sector — restaurants, retail outlets, call centers. This will fall short of what is needed to sustain this growth.

Our leaders should take steps to avoid a meltdown. They should not be lulled into a false sense of achievement. The public investments are being poured into the wrong areas. We are not building the necessary infrastructure for sustained development. The crash can happen sooner than anybody might expect.

 

A mustard seed

The success of Eugenio S. Ynion Jr. in business illustrates how each of us can be like a mustard seed which is quite small and yet grows into the biggest of shrubs, an Ilonggo priest, Fr. Delbert Jardinaso, OSJ, said on Monday, July 28.

In his homily during the blessing and inauguration of the Yngen Group building in Barangay San Antonio, San Pedro Cty, Fr. Jardinaso said that “like the mustard seed, we can grow and become so magnificent by making use of possibilities.”

Fr. Jardinaso is now the parish priest of San Jose, Batangas. He spoke on the significance of the Parable of the Mustard Seed (Matthew 13:31-35) in our lives.

Businessman-philanthropist Julio D. Sy Jr. (right), assisted by Mrs. Carissa Gonzales-Ynion and Barangay Captain Eugenio S. Ynion Jr., cuts the ceremonial ribbon to formally inaugurate the Yngen Group headquarters building in sitio Guadalupe, Barangay San Antonio, San Pedro City on July 28, 2014.

Businessman-philanthropist Julio D. Sy Jr. (right), assisted by Mrs. Carissa Gonzales-Ynion and Barangay Captain Eugenio S. Ynion Jr., cuts the ceremonial ribbon to formally inaugurate the Yngen Group headquarters building in sitio Guadalupe, Barangay San Antonio, San Pedro City on July 28, 2014.

“He was nothing like a mustard seed, but in the midst of nothingness and insignificance, Jun Ynion, showed us that we can reach great heights,” Fr. Jardinaso said.

However, this success can only be meaningful if it is shared with others, he said.

Fr. Jardinaso urged Ynion to help the community through genuine public service. “It is when we remove selfishness from our lives, when we share our gifts with other people, that our success becomes meaningful,” he said.

Jun Ynion is the chief executive officer of the Yngen Group which relocated its corporate headquarters to Barangay San Antonio from the urban congestion of Makati City. He is also the barangay captain of Barangay San Antonio.

The transfer of the Yngen Group corporate headquarters to Barangay San Antonio also puzzled Ynion’s business partner, Julio D. Sy Jr., or better known as “Jun Sy”.

“At first, I played the role of devil’s advocate to Jun,” Sy said. “But I realized I can’t question his determination to pursue his mission.”

Sy described Ynion as “passionate” and ultimately supported the move because he saw “how much he loved the community.”

“More good is bound to happen,” Sy said, although he realized that it is difficult to balance two roles.

Sy said that he can compare what Ynion is doing to the entrepreneurial work that NBA legend Magic Johnson had done for blighted communities in the United States, the Harlem in New York City in particular.

Magic Johnson, he said, became greater after basketball because of his work to uplift decaying American communities through entrepreneurship.

“What he has done is inspire the resurgence of the Harlem,” he said.

Sy found a parallel to what Ynion is doing for barangay San Antonio to the work of Magic Johnson.

He noted, for instance, that the property on which the Yngen Group building stood, as well as the Sabak Bldg, in sitio Guadalupe used to be a place of sin and crimes.

The construction of these two buildings will trigger a resurgence in the community, he said.

 

 

 

Convenience store chains race to win Iloilo market

Mini-Stop of the Robinsons group opened two stores in Iloilo City Thursday (July 24, 2014) to signal its intention to grab a slice of the growing convenience store market here.

The Mini Stop stores are located in the Robinsons Place Mall on Ledesma St. and in the IPSTA in Lapaz.

The entry of Mini Stop to the Iloilo market came in the heels of a virtual “invasion” by 7/11 which opened eight of a planned 25 stores just last month.

An announcement in Bloomberg Businessweek said Philippine Seven Corp. is eyeing the opening of another 80 stores in the next two years to take a commanding presence with 105 stores.7 11 logo

Not to be outdone, a local convenience store outfit, Quix Mart, has also opened new stores in several locations in the city. The Quix Mart is owned by the Que Family of the Iloilo Supermart chain.