Premiere Island Power REIT [PREIT 2.00, down 8.3%; 57% avgVol] [link], the Villar Family’s industrial lot rental REIT, PREIT declared a Q3/24 dividend of P0.0325/share, payable on December 27 to shareholders of record as of December 13. The dividend has an annualized yield of 6.5% based on the previous closing price, which is marginally smaller than PREIT's pre-dividend annualized yield of 6.52%. The total amount of the dividend is P107 million, which is 90% of the P119 million in distributable income that PREIT reported for the quarter. Relative to PREIT's IPO price, the dividend increased PREIT's total stock and dividend return to 53.95%, up from its pre-dividend total return of 51.79%. PREIT will have distributed the minimum 90% of its distributable income through the first three quarters of FY24.
MB bottom-line: We shouldn’t expect the Villar Family to have much difficulty in collecting rent from its related party power producing companies; PREIT earns contractual (lease) income from a small number of plots that the Villars are using to run diesel generators in remote locations. If that sounds small in scope, it’s because... it is. PREIT is tiny. In terms of marketcap, it’s worth just P6.5 billion and is only half the size of the next-biggest REIT, VistaREIT [VREIT 1.79, up 0.6%; 239% avgVol] at P13.4 billion. For comparison, another REIT that makes its money renting land to power producers, Citicore Energy REIT [CREIT 3.02, downn1.0%; 93% avgVol], is worth three times as much at P19.8 billion, and AREIT [AREIT 39.20, down 1.5%; 61% avgVol] is worth a whopping P125.8 billion. PREIT is also one of just two REITs DDMP [DDMPR 1.02, up 2.0%; 145% avgVol] being the other one) that has not planned or executed any kind of asset injection to grow its dividend. So why (or how) does it trade with essentially the same annualized yield as CREIT, and compete with AREIT for the lowest-yielding REIT on the PSE? The stock dropped 8% yesterday on the dividend declaration, though I’m not sure why. PREIT’s exactly what it told us it would be. Nothing more. Sometimes a little less, but not egregiously so.
Merkado Barkada is a free daily newsletter on the PSE, investing and business in the Philippines. You can subscribe to the newsletter or follow on Twitter to receive the full daily updates.