COVER STORY
We spoke to Oliver Tan , the President and CEO of Citicore REIT , on the REIT ’ s outlook towards sustainable REITs in the Philippines , particularly in today ’ s economic landscape .
Q1
What is your outlook for the REIT market in Asia and in the Philippines for 2022 ?
While REIT as an asset class is notably more popular in Singapore and Japan , it is starting to take off in the Philippines . Judging from the performance of the five to six listed REITs in the Philippines , local investors have become more familiar and comfortable with REITs , after the successful CREIT ’ s Initial Public Offering ( IPO ) last month , which was the first energy REIT to be listed in the Philippine Stock Exchange ( PSE ).
The market expects more power and infrastructure-related REIT listings to follow . This will provide investors with wider choices of REIT products outside of the traditional office and mall REITs .
Q2
How about your outlook on the renewable energy industry in the country ?
The Philippine government is serious in its shift to renewable energy . To mitigate the risk of being overly reliant on other countries for oil and coal , it has launched several policies encouraging more investments in the renewable energy sector such as the Renewable Portfolio Standard ( RPS ), which requires power utility companies to source at least 50 % of power demand from renewable energy sources by 2030 .
To date , these power utility companies are still at 20 %, Moreover , another policy such as the Green Energy Option Program ( GEOP ) empowers consumers to source or procure their electricity directly from renewable energy generators such as Citicore .
Q3
Currently , Citicore ’ s assets are focused on solar plants across the Philippines . Are you planning on expanding this in 2022 ? How do you plan to diversify your assets but still remain in renewable energy down the line ?
CREIT ’ s sponsor Citicore Renewable Energy Corp . ( CREC ) has 1,500 megawatts-direct current ( MWdc ) pipeline projects to be completed in the next 5 years . These are primarily utility-scale solar farms .
Citicore has plans to diversify into other renewable energy sources such as run-of-river hydro , wind and battery energy storage systems . In fact , construction is underway for our maiden
Silay , Negros Occidental Solar Plant
run-of-river hydro project with a plant capacity of 19.5MWp .
Q4
What are your plans for the proceeds of your primary offering ? Are there any domestic acquisitions in the pipeline for Citicore REIT ?
Proceeds from the primary offering will be used to acquire the Bulacan and South Cotabato properties , which we target to accomplish within the month .
The Sponsor shall use all IPO proceeds to partially fund about 635MWdc of new solar farms . Once these solar plants are completed , the Sponsor intends to infuse them into CREIT to grow its initial asset portfolio by 5-times in terms of plant capacity .
Any future acquisitions to be considered by CREIT must meet the Company ’ s investment criteria .
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