The real estate investment trust (REIT) market in the Philippines has been gaining significant traction in recent days, with REITs serving as a pivotal mechanism for companies to raise funds while offering investors a reliable and liquid investment option through dividend issuances.
For companies, particularly those in the real estate sector, REITs present a strategic avenue to unlock the value of their property assets. By converting these assets into REITs, companies can access a new pool of capital that can be used for expansion or other strategic initiatives. Additionally, listing as a REIT can enhance a company’s corporate profile and market valuation due to the regulatory transparency and governance standards required.
From an investor’s perspective, REITs offer several compelling benefits. They provide a way to invest in large-scale, income-generating real estate without the need to directly purchase and manage properties. This is particularly attractive to investors seeking diversification and stable income streams.
Furthermore, REITs offer liquidity like stocks, allowing investors to easily buy and sell shares on the stock exchange. The transparency and regulatory oversight of REITs also provide an added layer of security for investors.
CREIT: Blazing The Trail For Energy REITs
“Citicore Energy REIT Corporation (CREIT) stands out as a trailblazer in the Philippine REIT landscape. As the first energy REIT in the country, CREIT focuses on renewable energy assets. This innovative approach not only aligns with global trends towards sustainability but also provides investors with a unique investment opportunity in the renewable energy sector,” the venture told International Finance.
“Notably, the listing of CREIT in the Philippine Stock Exchange paved the way for more diversified REIT products in the country, including a second energy REIT and prompting an existing REIT to include renewable assets in its portfolio,” it continued.
What Makes CREIT Shine Among Other REITs
One of the standout features of CREIT is its impressive revenue growth, driven by an extensive portfolio of 7.1 million square metres of leasable space with long-term leases and 100% year-round guaranteed occupancy.
“The leasable space, utilised for solar energy generation, ensures a steady and growing income stream. CREIT’s strategic leasing and effective asset management have been pivotal in maintaining and enhancing this revenue growth, showcasing the company’s operational efficiency and market acumen,” the venture told International Finance.
CREIT’s robust financial health is another key differentiator. The company maintains a strong balance sheet with low debt levels and ample liquidity, providing a solid foundation for future growth. This financial strength not only supports ongoing operations but also offers the flexibility to pursue new investment opportunities and expansion plans. CREIT’s prudent financial management and strategic investments have built a resilient financial foundation, ensuring long-term stability and growth potential.
Investors are particularly attracted to CREIT due to its commitment to delivering consistent and attractive dividends. The company has sustained a dividend payout ratio of 106% of its dividendable income at Php 0.049 per share, reflecting its strong earnings and cash flow generation. This impressive payout ratio underscores CREIT’s dedication to maximising shareholder value and providing reliable returns, making it a preferred choice among dividend-seeking investors.
CREIT’s growth prospects have been further bolstered by its sponsor, Citicore Renewable Energy Corporation (CREC). CREC’s robust project pipeline is gaining momentum, with one gigawatt on track for completion by 2024 end. This pipeline ensures a continuous influx of assets that CREIT can acquire and integrate into its portfolio, driving future growth and enhancing its market position. The strong backing of CREC provides CREIT with a competitive edge and supports its strategic expansion plans.
Elevating Investor Relations
In a testament to its excellence in investor relations, CREIT won the Best Investor Relations – Energy REIT for the Philippines at the 11th International Finance Awards 2023, held in Bangkok, Thailand. The award, received on January 26, 2024, highlights CREIT’s commitment to maintaining transparent, effective, and proactive communication with its investors. This accolade underscores the company’s strategic efforts to provide comprehensive and timely information, fostering strong relationships with both retail and institutional investors.
“CREIT’s investor relations (IR) programme stands out for its stakeholder-focused approach. The programme emphasises a proactive communication strategy that ensures visibility and transparency to its stakeholders, shareholders, and the public. This approach includes regular updates on financial performance, strategic initiatives, and market conditions, as well as accessible channels for investor feedback and engagement,” it told the business publication.
The effectiveness of CREIT’s investor relations programme has been reflected in its ability to maintain investor trust and confidence, which is crucial for attracting and retaining investment. By prioritising open and transparent communication, CREIT has set a high standard in the REIT market, demonstrating its commitment to governance, transparency, and responsiveness to investor concerns.
Reflecting on the award, CREIT President and CEO Oliver Tan said, “It is a privilege to receive international recognition for our Investor Relations programme. This award not only emphasises the level of service that CREIT upholds, but also highlights our passion to deliver our mission of a sustainable investment platform with a renewable energy asset portfolio which hedges on a commitment to work closely with our stakeholders and investors. This IR strategy has driven excellent value and delivered attractive returns while maintaining our sustainable footing.”
The Road Ahead
CREIT has emerged as a shining star among Philippine REITs, distinguished by its impressive revenue growth, solid financial position, sustained dividend payouts, and robust project pipeline. The company’s focus on renewable energy infrastructure not only aligns with global sustainability trends but also offers a unique value proposition to investors, gaining multiple stamps of approval from brokerages in the process.
CREIT’s excellence in investor relations, as evidenced by its recent accolade at the International Finance Awards, underscores its commitment to transparency, accessibility, and responsiveness.
This award not only enhances CREIT’s reputation but also contributes to the overall growth and credibility of the Philippine REIT market.
As CREIT continues to innovate and expand, it has set a high benchmark in the REIT sector, showcasing the potential and promise that the Philippine REIT landscape holds.