CREIT Set For Blockbuster IPO

The strong demand for the country’s first energy real-estate investment trust or REIT - Citicore Energy REIT (CREIT) Corp. - has led to the postponement of its IPO set today, Thursday, as the strong uptake from investors led to a slowing down of its Initial Public Offering (IPO) processing time.

Photo Insert: The demand for CREIT’s IPO was overwhelming, with more than 5,000 retail category investors placing orders.

This positive development augurs well for the CREIT IPO where investors can also benefit from the company's earnings on its renewable energy projects, leading to what is believed to be an upcoming blockbuster.

The huge demand led to the tedious process that the company had to undertake in line with its strict compliance with the Philippine Stock Exchange's (PSE) listing rules and regulations, as well as its commitment to ensuring the equitable distribution of shares across a broader investor base.

“We are grateful to the overwhelming reception of investors, owing also to the extensive market education conducted, which further increased appreciation for REITs as a new asset class,” said Oliver Tan, President and CEO of CREIT.

According to Tan, CREIT’s projected dividend yield based on projected 2022 and 2023 earnings of 7.0% and 7.4%, respectively, is the highest among the existing REITs. These optimistic projections energized many investors to invest in CREIT, being the first REIT also to be listed in the Year of the Tiger.

The company has also disclosed that Post-offer, it already plans to implement a dividend payout of at least 95% 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% based on the REIT IRR.

The demand for CREIT’s IPO was overwhelming, with more than 5,000 retail category investors placing orders.

The company’s group of underwriters led by Unicapital, Inc. nonetheless exerted strategic efforts to distribute the shares as widely as possible to its broad investor base - a strategy that will hopefully result in better liquidity and more active trading of this share.

"In as much as the Underwriters wanted to accommodate all interested investors, the strong orders for CREIT’s IPO from local and international institutions and more than 5,000 retail investors simply outnumbered the total shares offered to the public,” disclosed Pamela Louise Victoriano, Unicapital Inc.’s First Vice President for Corporate Finance.

The Company completed its offer period last Feb 8, 2022, with oversubscriptions across all tranches – Institutional, Trading Participants, and Local Small Investors (LSI). Specifically, the LSI tranche generated an oversubscription level of 124.09%, receiving a total demand of 270,745,000 shares from the 218,182,000 shares allocated.

As a result of the voluminous number of retail and individual investors, CREIT’s scheduled listing ceremony will be moved from 17 February 2022 to next week, no later than 22 February 2022.

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