CREIT inks deal to buy Surallah site of solar farm

CITICORE Energy REIT Corp. has forged a deed of absolute sale on Monday to acquire a property in South Cotabato from an affiliate for around P753.8 million.

In a disclosure, the listed real estate investment trust said that the acquisition would allow it “to generate leasing income over a long-term period of 25 years, adding 20% to its total leased area.”

The parcel of land it acquired is in the province’s Surallah town and has an area of 79,997 square meters (sq.m.). It was bought from Citicore Solar South Cotabato, Inc.

The property is the site of a 6.23-megawatt-peak (MWp) solar power plant, which was commissioned on Dec. 9, 2015. It was paid in cash upon the execution of the deed of absolute sale.

Citicore Solar South Cotabato is wholly owned by Sikat Solar Holdco, Inc., which is a unit of Citicore Renewable Energy Corp. (CREC). CREC owns 47.63% of CREIT.

CREIT said that together with the acquisition in a 253,880-sq.m. property in Bulacan, the South Cotabato property will allow the company to generate leasing income for 25 years.

The two properties will contribute 21% to CREIT’s total lease revenue and bring total operating capacity of all its tenants to 145 MW of direct current (dc) from the company’s pre-initial public offering capacity of 124 MWdc.

In the first quarter, CREIT recorded a net income of P300.3 million, more than 12 times higher than the P23.52 million posted a year ago, as it began to realize rental income from its assets leased out to solar plant operators.

The profit jump comes as the company’s gross revenues surged by nearly 470% to P331.79 million, which largely came from lease income from various solar plant companies.

“With an established list of tenants operating in a cycle-resilient industry, CREIT is optimistic in generating recurring green sources of lease revenues, translating to increasing distributable income and attractive dividend yields to our shareholders,” said CREIT President and Chief Executive Officer Oliver Y. Tan.

The company’s board of directors approved the declaration of cash dividends P0.044 per share, which is payable on June 24.

CREIT has a five-year road map that targets 1.5 gigawatts (GW) of installed capacity by 2025. It said solar farm assets that meet its investment criteria “are scheduled to be acquired and infused” into the company once completed and operational.

On Monday, shares in the company slipped by 1.57% or four centavos to close at P2.51 apiece. — VVS