Stock Commentary

Quick Take: Solar energy deals abound! and 2 more market updates

Merkado Barkada
Quick Take: Solar energy deals abound! and 2 more market updates

VistaREIT [VREIT 1.71 2.4%] [link] plans to double its gross leasable area by the end of 2025, while targeting a 10% annual shareholder return from efficiency gains and new acquisitions. VREIT made these statements as part of its Three Year Plan, which it produced with its parent company, Vista Land & Lifescapes [VLL 1.98 0.5%].

MB Quick Take: Growth is good, and in a competitive REIT market, that’s something that can help differentiate VREIT from the other REIT offerings for investors that are looking for a “set it and forget it” long-term investment option. That said, it still isn’t exactly clear to me what VREIT is, and what it plans to become. It’s mostly malls right now, but the Three Year Plan mentions specifically that its second investment objective for the period is to invest in VLL’s “other commercial real estate properties” from townships in “key urban areas”. Commercial real estate (office space) is nice, but it has a different long-term risk profile. Part of what made VREIT interesting was that it was focused on the retail/mall sector. But if they can deliver 10% growth per year, maybe investors won’t mind as much. But that’s an open question.

SP New Energy [SPNEC 1.60 0.6%] [link] board approved the signing of a memorandum of understanding (MOU) with Enrique Razon’s Prime Infra (PRIME) “on the way forward” with their three joint ventures, Terra Solar Philippines, Inc. (TSPI), Solar Tanauan Corporation (Solar Tanauan), and Solar Philippines Tarlac Corporation (Solar Tarlac). Under the MOA, the shareholder agreement for TSPI would be amended to include a better dispute resolution mechanism, PRIME would purchase 100% of Solar Tanauan from SPNEC’s parent company for P1 billion, and some transactions for Solar Tarlac that could end up with SPNEC’s parent company owning 100% of that project.

MB Quick Take: SPNEC said that while these deals currently involve SPNEC’s parent, they are for projects that would be transferred to SPNEC through the share swap that was announced last year. The big daddy here is the Terra Solar Philippines project, which both parties seem interested to continue developing together, but it does look like the companies plan to part ways on the other two projects, with PRIME taking the Solar Tanauan project, and Solar Philippines (eventually SPNEC) taking the Solar Tarlac project. Remember that it was never SPNEC’s intent to operate, only to capture the change in land value when the prime land was attached to fully-permitted projects, so the “loss” of Solar Tanauan doesn’t (on its face) seem out of line with SPNEC’s plans.

Citicore Energy REIT [CREIT 2.49 1.2%] [link] listed its P4.5 billion in ASEAN Green Bonds on the Philippine Dealing and Exchange (PDEx). CREIT said that the offering was oversubscribed, and that the proceeds of the sale would go to purchasing “value accretive” land to boost its total landholdings from 2 million square meters to 7 million square meters.

MB Quick Take: The PDEx is like the stock exchange of the bond market, where investors can buy and sell bonds. The media refers to this as CREIT’s “maiden” ASEAN Green Bond offering, which is just finance-speak for saying that it’s the first time it’s sold ASEAN Green Bonds. The usage is like how we might talk about a ship taking its first voyage after construction as its “maiden voyage”.



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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.

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