CREIT gears up for acquisitions after record-breaking IPO

Pioneering renewable energy-themed real estate investment trust (REIT), Citicore Energy REIT Corp. (CREIT), the best performer among the country’s six REITs on listing day, plans to acquire some of the P70 billion worth of renewable energy assets to be built by its sponsor and its partners in the coming years.

It is also positioning itself to be the “consolidator” of smaller solar energy assets built by other parties in the highly fragmented local industry, while considering other renewable energy technologies aside from solar power, CREIT president Oliver Tan said at a press briefing after the company’s listing on the local bourse on Tuesday.

Shares of CREIT advanced by 11.37 percent to close at P2.84 per share on its inaugural trading day, outperforming the first-day performance of five other listed REITs. It also beat the main-share Philippine Stock Exchange (PSE) index, which rose by a modest 0.93 percent for the day (See story below).

It was the day’s most actively traded company, with about P1.48 billion worth of shares changing hands.

New flavor

CREIT, led by the same group behind construction and infrastructure conglomerate Megaworld Construction Corp., also brought a new flavor to REITs in the country as all five earlier REITs mostly derived earnings from office property projects. This is the first REIT that serves energy assets.

The company’s offering was “multiple times oversubscribed,” Tan said, without disclosing exact numbers. Nearly 20,000 investors participated in the offering and not everyone got an allocation due to “overwhelming” demand that prompted underwriters to delay listing date. Foreign funds accounted for about 10 percent of the offer size, Tan said.

“The high level of interest among investors for both REITs and renewable energy companies obviously contributed to the brisk demand in the shares of CREIT. The oversubscription by the local small investors in this IPO (initial public offering) tells us that they are optimistic about the company’s prospects,” PSE president Ramon Monzon said during the listing ceremony.

He said the PSE would like to see more companies address climate change and promote sustainability.

More assets

CREIT is now preparing to infuse more assets into its portfolio, including those from the 1,500-megawatt pipeline of its sponsor, Citicore Renewable Energy Corp. and its partners. Of the capacity, 1,000 MW is attributable to the Citicore group.

Tan said the first 120 MW would be infused as early as next year.

“The plan is to inject new asset into CREIT every year starting this year … It has flexibility because, on one hand, you have a sponsor who will provide visibility because of its 1.5-gigawatt pipeline project. On the other hand, it can also acquire assets or bring in assets from third party, obviously subject to the investment criteria of the company,” Tan said.

He also sees opportunities to acquire assets from other players.

“Notwithstanding, we are open to look into other renewable energy sources like wind, run-of-river hydro, energy storage system,” he noted. INQ