A handful of IPOs are line-up this year at the Philippine Stock Market! This will be a review of the upcoming IPO from Citicore Renewal Energy Corp with their REIT: Citicore REIT or simply, CREIT. This IPO is quickly coming up from Feb 2 to 8, 2022. At this point, you've probably come across dozens of reviews and articles on yet another REIT IPO. So I've made sure to keep this review short but handy. Here are 5 quick facts about the Citicore REIT IPO, just in case you haven't made up your mind whether or not you'll invest! And yes, these are 5 quick facts in 5 minutes - - - not exactly less but definitely within the range.

First, the Citicore REIT is the first REIT non-office REIT in the country and it will be the first REIT on renewable energy. While we've had a handful of REITS in the last 2 years (Ayala Land, Double Dragon Meridian Park, Filinvest Land, Megaworld, and Robinsons Land), all these REITs have always had corporate office space leasing as their main business. As a REIT, Citicore will of course keep to the real estate business, but this time, the focus will be on renewable energy production, specifically, solar power plants. While office space leasing deals with complexities by working with different clients and drawbacks from the pandemic, leasing space for renewable energy production is somewhat simpler. Citicore REITs' mother company, Citicore Renewable Energy Corporation (CREC) will be the lessee and heading the operations side of energy production while the former will only be the lessor. The downside is that in this investment, it seems like we're putting all our bets on CREC.

Second, Citicore REIT will be earning from a fixed lease agreement but also having a provision for variable income via profit share from CREC. While previous REITs are mostly earning from their tenants through a fixed term agreement, Citicore REIT has this unique provision for extra income in the form of variable rental income. While small in contrast to the fixed term lease, this at least gives prospective investors the chance to also earn on the side of the renewal energy production business.

Third, and perhaps this is the most exciting: Citicore REIT is already operating and revenue-generating! While this might typically be a given for other REIT IPOs or IPOs altogether, the most previous IPO in the renewal energy sector from Solar Philippines Nueva Ecija Corporation (SPEC) came as a pre-revenue IPO. Since there is a provision that allows companies in the renewable energy sector to do an IPO even as its pre-revenue to encourage more investments, this is what SPNEC did. And while I was skeptical of SPNEC's IPO, its performance actually came as a big surprise as SPNEC turned out to be the best IPO in 2021! With this, I came to conclude that just like in the US stock market, our local investors are no longer looking at past performance to be predictive of future results. Investors in the local markets are willing to take big bets on sound prospects and potential, especially on a literally "sunrise industry" such as solar power plants and renewable energy. If SPNEC's performance is telling of how future IPOs on this industry will fare, then things are definitely looking up for Citicore REIT. And even better, the company does have good numbers to go by. CREC is operating power plants in Tarlac, Silay, Toledo, and Clark, yielding over 160MW in production capacity. These are the same power plants that will be turned by CREC to the Citicore REIT. The audited financial statements show that the company has been in operations since 2017. While incurring a loss of P3M in 2017, it was already in the black by 2018 with a net income of P13M. This grew annually and by 2020, Citicore REIT already had a net income of over P100M. Even at the end of September 2021, the company already had a net income of P118M, showing the continued growth that the company has experienced.

Fourth, Citicore is backed up by Megawide Construction Corp, one of the largest construction companies in the country. Amongst Megawide's most famous projects include City of Dreams Manila and the newly built Mactan-Cebu International Airport. More than just being a testament to Megawide's flair for the aesthetics and delivery, what these projects show is that Megawide is highly capable of doing strategic partnerships not only with the private sector such as Belle Corp. for City of Dreams, but also with the public sector.

Fifth, the Citicore REIT is poised to give the highest returns in terms of dividend yield at 7%.n At its slashed offer of P2.55, this REIT is looking to outdo all previous REITs in terms of its dividends.

Will you be investing in the Citicore REIT?

Find out how you can invest in REIT IPOs via BDO Securities in this video:
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Want to invest in US Stocks? Here's $2 FREE when you invest via Gotrade using my link:
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