MANILA, Philippines — The Villar Group’s second real estate investment trust offering debuted in the local bourse on Thursday, pulling through despite the gloom surrounding trading today.
Morning activities proved choppy for Premiere Island Power REIT Corp. (PREIT), as it traded at an intraday low of P1.37. By the time trading ended, PREIT traded up 6.67% to close P1.6 apiece.
The Villar Group’s first REIT offering debuted in June 2022.
As it is, PREIT earns most of its keep by leasing land to power plants owned by other Villar companies. These power plants supply electricity to Siquijor Island and Camotes Island.
PREIT is projected to earn dividend yields at 9.56% in 2023.
Proceeds will be used to buy and develop more real estate leased out to other Villar companies. Its prospectus indicated that it was angling to become a renewable energy REIT, hinting that some land purchases could be used for renewable energy projects in the future.
Trader Aniceto Pangan explained why PREIT proved enticing for investors amid gloomy sentiment.
“With PREIT's minimal risk of not being able to meet its income and dividend projection and with contracted power supply agreements of more than 10 years plus fuel price pass through provisions on its contract, the projected stable dividend yield of more than 9% attracts a number of investors on PREIT IPO especially with the low interest rate environment,” he said.
PREIT’s IPO was fully subscribed despite a less-than-ideal environment for companies that want to go public.
The law mandates REIT companies to distribute 90% of its annual distributable income as dividends.
Hernan Segovia, trader at Summit Securities, saw market turbulence plaguing PREIT’s maiden offering.
“$PREIT's listing today was troubled by its weak open and much of the day was on the red. It was a forced moc up (market on close) that made $PREIT closed at 6.67% higher. As to the reason why it was moc up, well... why not?,” he said.
Another analyst who refused to be identified meanwhile noted that PREIT shares were just bought up towards the close of the market, “so too soon to say anything.”