PH’s First Energy-Focused REIT Gets PSE Nod for Almost 3B Shares Offer

The first renewable energy-focused real estate investment trust (REIT) in the Philippines has received the green light from the Philippine Stock Exchange Inc. to proceed with its initial public offering (IPO), Philstar reported. It will be listed with the ticker CREIT on February 17. 

Offering 2.8 billion common shares to the public, CREIT is sold for P3.15 apiece, with an over-allotment option of up to 418.3 million shares. It’s set to raise P10.1 billion, with the offer period running from February 2 to 8.

First Energy-Focused REIT

The proceeds from the primary offer of 1 billion primary shares will be used to purchase real estate assets in Bulacan and South Cotabato. These lots will then be rented out to solar power plants within the Citicore Group, Citicore Solar Bulacan Inc. and Philippines Solar Energy One Inc. in South Cotabato. For this reason, CREIT emerges as the country’s first non-office building REIT.

Meanwhile, the proceeds from the secondary offer of 1.7 billion will be funneled into the REIT’s sponsor, Citicore Renewable Energy Corp. The company will then reinvest the money in real estate assets in the country and distribute at least 90% of distributable income as dividends to shareholders, in compliance with the Real Estate Investment Trust (REIT) Act of 2009.

CREIT is under the same ownership group of Megawide Construction Corp., a listed builder owned and founded by businessman Edgar Saavedra. It’s the sixth REIT that debuted in the Philippine market. 

Sustainability in REIT Portfolios

While CREIT is the first energy-focused real estate investment trust in the country, the existing REITs notably have green buildings in their portfolios. 

AREIT, the first REIT introduced in the market, features Makati properties that use renewable energy sources. Last year, the company vowed to achieve carbon-neutrality by yearend, as mentioned in this Business World report. 

The company strived to minimize 80% of its 10,000 tons of carbon dioxide equivalent emissions with the use of clean energy. Most of its properties are Leadership in Energy and Environmental Design (LEED) certified. They use district cooling systems, which lower energy use by 20% to 35%. Meanwhile, the remaining balance of the carbon emissions will be offset through Ayala Land’s carbon forests.

The office buildings included in Filinvest Land’s REIT, (FILRT) feature sustainability elements as well. The properties are located in Filinvest City, the first central business district (CBD) to be LEED Gold certified. The Northgate Cyberzone, which is one of the buildings in FILRT’s portfolio, uses the country’s largest district cooling system (DCS), which lowers carbon and greenhouse gas emissions. 

Growing Appetite for Green Real Estate

According to property consultancy firm Santos Knight-Frank, the pandemic pushed stronger interest for properties with green features, as cited in this Business World report. These sustainability elements include curtain wall systems with thermal insulation, touchless access in elevators, vertical gardens, UV disinfection lifts, and filtered air circulation systems. 

Projecting an increase in green buildings in the property market, Colliers Philippines noted that from 2021 to 2023, about 40% of the new supply of buildings will be LEED or WELL-certified buildings. 

LEED is a widely used green building rating system developed by the U.S. Green Building Council. Meanwhile, WELL is a performance-based system for measuring, certifying, and monitoring elements of the built environment that affect human health and well-being.

Notable Movements in Green Real Estate Industry

Green real estate has been gaining momentum in the country in the last few years, especially as the government introduced programs related to promoting clean energy. 

Recently, the Bangko Sentral ng Pilipinas (BSP) said that they are considering giving incentives to players involved in sustainable investments. Some of the financial perks mentioned are higher loan values and preferential rediscount rates, which are aimed at promoting inclusive growth and fighting climate change.

Last year, the Philippine Green Building Council (PHILGBC) updated BERDE, the local green building rating system, taking into account the building’s ability to provide opportunities for community engagement, economic development, and health and well-being (replacing indoor environment air quality). 

The agency stated that amid the pandemic, developers across the country continued to register green building projects. Designed to minimize the impact of buildings on the environment and human health, green buildings reduce energy consumption and promote safe indoor environments.

Sources: Philstar, BusinessWorld, FILRT 

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