Citicore Energy REIT Corp.’s (CREIT) initial public offering received high demand from investors who had fully subscribed to the institutional tranche on the first day of sale.
In a briefing with analysts, CREIT president Oliver Tan said the institutional tranche was oversubscribed on day one and that the country’s first renewable energy-themed real estate investment trust continued to receive orders from a healthy mix of local and foreign buyers.
CREIT is seeking to raise as much as P6.4 billion from the maiden sale of 2.509 billion shares, consisting of 1.047 billion primary shares, 1.134 billion secondary shares and 327.27 million shares to cover the over allotment option.
The institutional tranche comprises 70 percent of the offer size, equivalent to P3.89 billion.
CREIT priced its IPO at P2.55 per share, translating to a dividend yield of seven percent of projected 2022 earnings.
Most brokerages are positive on the IPO, believing in the long-term value creation of the company.
Tan said the IPO was priced more reasonably to reach a wider investor base to serve as the company’s long-term partners.
“The company believes that a more affordable pricing will allow a broader set of investors to participate in CREIT’s value proposition, especially since these individuals and institutions will be our long-term partners. What we want to offer in CREIT is a sustainable investment in various aspects – economical (for the investor), social (for the communities), and environmental (towards a zero-carbon future),” said Tan.
Post-offer, CREIT plans to implement a dividend payout of at least 95 percent of its distributable income for the preceding year (subject to availability of unrestricted retained earnings and compliance with applicable laws), which is a premium over the required dividend payout of at least 90 percent based on the REIT IRR.
At P2.55 per share, CREIT’s implied dividend yields based on projected 2023 earnings are 7.4 percent based on the final REIT plan.