SM Investments Corp. (SMIC) has made a significant move into the real estate investment trust (REIT) sector by purchasing nearly 29 percent of Citicore Energy REIT Corp. (CREIT) for about P5 billion. This deal allows SMIC, the country’s most valuable conglomerate, to gain exposure to renewable energy-themed real estate.

Industry sources have confirmed that SMIC is set to buy the shares in CREIT currently held by Citicore Renewable Energy Corp. (CREC), a part of the Megawide group led by businessman Edgar Saavedra. The deal, facilitated by BDO Capital Investment Corp., is expected to be finalized soon.

CREIT, which was listed on the local stock exchange in 2022, is valued at P18.4 billion. This purchase would imply that SMIC is buying shares at a price close to the current market value.

The involvement of SMIC in CREIT aligns with its sustainability commitments outlined on its website, focusing on practical solutions for water, waste, and energy management to promote resource conservation and environmental protection.

With an impressive green asset portfolio of 7.16 million square meters and full occupancy, CREIT primarily leases solar farms to its REIT sponsor CREC, making it the largest renewable energy REIT landlord in the Philippines. The properties leased by CREIT have an appraised value of P14.2 billion as of September 2023.

Additionally, the deal allows CREC to use the funds for its new projects while retaining its position as the largest stockholder of CREIT, owning approximately a third of the company.

This move by SMIC comes ahead of the anticipated $1-billion public offering of a REIT sponsored by SM Prime Holdings Inc., further solidifying the conglomerate’s presence in the real estate investment market.

Fabio

Full Stack Developer

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