GREEN IS IN: Trailblazing CREIT attracts ESG investors

With so much interest in green and environmental, social and governance (ESG) investing, Citicore Energy REIT Corp. (CREIT) aims to serve this demand as the country’s first energy real estate investment trust (REIT).

CREIT president and CEO Oliver Tan said the company offers the investing public an alternative asset class which combines the benefits of a stable and sustainable investment – for the environment, our communities, and our children’s future.

“What we want to offer in CREIT is a sustainable investment in various aspects – economical (for the investor), social (for the communities), and environmental (toward a zero-carbon future),” he said.

Underwriters of CREIT’s IPO said it has generated strong interest during the book building process, particularly from green and ESG investors.

Unicapital Inc. president and CEO Ben Thomas Paἠares said interest in CREIT has been strong.

“Most of the institutions, especially those who have integrated ESG as part of their investment process, are highly attracted to CREIT’s underlying business, which is renewable energy, and its sustainable angle,” he said. 

BDO Capital and Investment Corp. president Eduardo Francisco said they expect to generate strong interest in the offering, “considering its pioneering status as an energy-REIT and a sustainable investment alternative in the renewables sector.” 

“We are quite excited to see how this trailblazing issuance from CREIT will shape the REIT market,” he said. 

CREIT said it expects to offer a stable dividend payout in accordance with the REIT Law. The company also believes it offers a unique value differentiation, with a green asset portfolio anchored on investing in and for the future. 

“This business model, we believe, is cycle-resistant as solar power generation is an essential industry, further supported by government programs, and has a clear plan for long-term growth. With the search for attractive returns, alongside a strong and effective ESG advocacy as criteria for a sound market investment, CREIT comes in as a practical alternative,” Tan said.

Post-offer, CREIT said it plans to implement a dividend payout of at least 95 percent of its distributable income for the preceding year—a premium over the required dividend payout of at least 90 percent based on the REIT IRR.

CREIT’s IPO, at P2.55 per share, was also priced more reasonably to reach a wider investor base.

At this price, CREIT’s implied dividend yields based on projected 2022 and 2023 earnings are seven percent and 7.4 percent, respectively, based on the Final REIT Plan. 

CREIT is offering 2.18 billion common shares with an over-allotment option of up to 327.27 million common shares from Feb. 2 to 8 and targets to list on the Philippine Stock Exchange on Feb. 17.

Net proceeds of up to P6.4 billion will be used to acquire properties within the Citicore Group, particularly to fund its intended acquisition of the properties owned by Citicore Solar Bulacan Inc. and Citicore South Cotabato.

Citicore Bulacan and Citicore South Cotabato operate solar power plants on such properties and are wholly owned indirect subsidiaries of Citicore Renewable Energy Corp. (CREC).

CREC, a subsidiary of Citicore Power Inc. (CPI), is part of the Citicore Group, which pioneered the Agro-Solar Social concept.

The Citicore Group has a pipeline of 1,500 megawatts-direct current (MWdc) solar plant capacity in the next five years with 120.5-MWdc underway. To date, Citicore is generating an installed capacity of 163 MW.

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