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EC World REIT reports 3QFY2021 DPU of 1.662 cents, up 19.7% y-o-y
EC World REIT, which owns a portfolio of eight largely logistics properties in China, has reported a distribution per unit of 1.662 cents for 3QFY2021 ended Sept 30, up 19.7% y-o-y.
Net property income increased by 9.4% y-o-y to $28.6 million, on a 10.9% y-o-y increase in revenue to $31.6 million.
Goh Toh Sim, the REIT manager&rsquo s executive director and CEO, explains the gain came from a more favaourable exchange rate of rental collected in RMB but booked in Singdollar. The REIT managed to achieve higher rental rates too.
&ldquo We remain prudent in our capital management with the retention of 5% of total amount available for distribution in 3QFY2021 for withholding tax payment upon future profit repatriation,&rdquo adds Goh.
On May 17, the REIT&rsquo s manager said it has been approached by Forchn International for a potential offer for all its properties.
Since then, there have been no further &ldquo material developments&rdquo .
China focused S-Reits resilient amid onshore property focus
Chinese real estate and property-related stocks have been dominating headlines over the past week as investors remain cautious and watch for updates.Closer to home, there are four S-Reits which have their entire portfolio of assets in China - CapitaLand China Trust, Sasseur Reit, EC World Reit, and BHG Retail Reit.
Together the four S-Reits have generated -0.9 per cent in average price returns over the past week, comparatively to the swings of Chinese property stocks.
The Reits have averaged 8.0 per cent in total returns in the year-to-date, 6.1 per cent in average distribution yields, and an average gearing ratio of 34.1 per cent which is lower than the sector average of 37.4 per cent.
S-Reits have a regulated leverage limited of 50 per cent.
EC World Reit has a diversified portfolio of assets used primarily for e-commerce, supply-chain management and logistics purposes in the e-commerce clusters of Hangzhou and Wuhan.
The Reit has a gearing ratio of 37.6 per cent, weighted average debt maturity of 1.13 years and interest coverage ratio of 2.86 times.
The Reit manager has expressed in its latest financial results that it will continue to actively explore and diversify sources of funding and hedging instruments to optimise its capital structure.
DBS ups EC World REIT' s TP to 90 cents on tighter yields for logistics portfolio
DBS Group Research analysts Dale Lai and Derek Tan have kept " buy" on EC World REIT with a higher target price of 90 cents from 80 cents previously.The new target price implies a price-to-net asset value (P/NAV) of 1.0 times and a " still very attractive" target yield of 6.8%, as it is still slightly below NAV.
As at the time of writing, EC World REIT has a NAV of 93 cents and is trading at a P/NAV multiple of less than 0.9 times.
The higher target price also reflects tighter yields for the REIT' s logistics portfolio amid the compression of cap rates for logistics properties.
EC World REIT reported a 10.5% y-o-y increase in distribution per unit (DPU) to 1.53 cents for the 2QFY2021 ended June, and a DPU of 3.064 cents for the 1HFY2021, which stood 2% above the analysts' initial projections.
" EC World REIT currently trades at a very attractive forward yield of 7.5%, a spread of more than 350 basis points to its other logistics-focused peers," write the analysts in an Aug 10 report.
" We recognise that EC World REIT' s portfolio is significantly smaller and less diversified than its large-cap peers, but its concentration of master leases not only ensure income stability, but the rental escalations also provide for organic growth to earnings," they add.
To this end, Lai and Tan say they have upped their projected earnings estimates on the REIT with its portfolio being close to full occupancy. It also has the potential for further organic growth from rental escalations, they add.
They add that they remain confident that the REIT will be able to maintain its portfolio occupancy with less than 6% of its leases expiring in FY2021. There may also be room for some positive rental reversions, they note.
" We have been positively surprised by EC World REIT' s earnings resilience in the past two quarters, as DPU came in slightly above our previous projections," write the analysts. " Despite the Covid-19 outbreak still looming, we note that EC World REIT has a reserve pool (from retained earnings) of more than $5.3 million it could tap to maintain DPU."
To Lai and Tan, the potential transaction from its ongoing offer from its sponsor will be a catalyst to its share price.
" Given the continued positive outlook for logistics properties and increased competition for quality assets, we do not rule out an offer at NAV or even higher," they write.
Units in EC World REIT closed 1.5 cents higher or 1.8% up at 83 cents on Aug 11. This represents a P/NAV of 0.9 times and a distribution yield of 7.5 times for the FY2021, according to DBS.
EC World Reit Q2 DPU up 10.5% to 1.532 S cents
EC World Reit, which specialises in Chinese logistics properties, posted a distribution per unit (DPU) of 1.532 Singapore cents for the second quarter ended June, 10.5 per cent higher than a year earlier.
Gross revenue for the quarter came in at S$31.2 million, up 10.6 per cent year-on-year, while net property income (NPI) rose 8.1 per cent to S$27.9 million. This was boosted by the strengthening of the yuan, the real estate investment trust (Reit) manager said on Friday.
The total distribution to unitholders for Q2 was 11.1 per cent higher at S$12.4 million. For Q2, the manager resolved to disburse 90 per cent of the total amount available for distribution, retaining the other 10 per cent. This is " in view of uncertainties arising from prolonged Covid-19 pandemic globally" , said chief executive of the manager, Goh Toh Sim.
Nevertheless, the manager is now paying out S$2 million worth of distribution previously retained in Q4 2019, Q1 2020 and partially from Q2 2020. As a result, EC World Reit' s Q2 DPU is unchanged from Q1.
For H1, EC World Reit' s DPU stood at 3.064 Singapore cents, up 20.4 per cent, while NPI was up 18.4 per cent to S$55.6 million.
Industrial S-Reits confident on resiliency
Despite challenges in the global economy brought about by the Covid-19 pandemic over the past 18 months, Industrial Reits, among Reit sub-segments, have remained one of more resilient and relatively sheltered Reit sectors.Globally in 2020, Industrial Reits were the second best performing after Specialised Reits, having generated 8.9 per cent median total returns. This segment' s resilient performance was seen in the year to date with 17.9 per cent median total returns and was among the top three best performing Reit sub-segments.
In Singapore, Industrial S-Reits were also one of the best performing sub-segments after Specialised and Healthcare S-Reits in 2020 and in the year to date.
Industrial S-Reits returned 20.9 per cent on average in the year-to-date. The five with highest returns in the year to date are ARA Logos Logistics Trust (K2LU - 49.9 per cent), Aims Apac Reit (O5RU - 40.3 per cent), EC World Reit (BWCU - 34.8 per cent), Sabana Reit (M1GU - 25.5 per cent), and ESR-Reit (J91U - 24.0 per cent).
There are eight Industrial S-Reits listed in Singapore with a combined market capitalisation of S$33 billion, forming the second largest sub-segment of the local Reit market by market capitalisation.
The sub-sector' s resilience may be due to its nature where property is tenanted to light industrial production, manufacturing, distribution and storage, business parks and other businesses.
E-commerce, transportation and logistics, and work-from-home are some trends that continue to remain in play in the pandemic. Industrial S-Reits have attracted over S$315 million in net retail investor fund inflows in the year-to-date.
NAV is 90 cents. So if they buy out, usually its higher than this.
Price shot as high as 80c, wonder what is the offering price if the deal is on? 20% higher of the avg 74c?
Good yield stock, huat liao, will divert the money to other stocks.
Good yield stock, huat liao, will divert the money to other stocks.
prophetjul ( Date: 18-May-2021 09:08) Posted:
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The manager of EC World REIT has revealed on May 17, that it has been approached by Forchn International for the potential transaction involving the REIT& rsquo s interests in all its properties.
Sounds like another conflict of intterest transaction.
What' s new?
What' s new?
Means their propertties will be acquired by others ?
So should be positive or negative for ec world reit holders ?
So should be positive or negative for ec world reit holders ?
Looks like another high yield asset will be privatised.
Does this seem like Left Pocket to Right Pocket to Left Pocket???
Zhang Guobiao
Chairman, Forchn Holdings Group & EC World REITMr. Zhang Guobiao is the Chairman of Forchn Holdings Group and SGX mainboard-listed EC World REIT.
Chairman Zhang established Forchn Holdings in Pudong, Shanghai in 1992. After over 25 years of hard work, he has transformed the company from its humble trade beginnings in building materials, and since diversified its portfolio to include e-commerce logistics services and warehousing, e-commerce real estate, health & wellness, manufacturing and financial services. Chairman Zhang is also the Executive Vice Chairman of the Zhejiang Chamber of Commerce in Shanghai. He also received the Award of Excellence by the Third Global Zhejiang Entrepreneurs Convention in 2015 and the Zhejiang Merchant of the Year for 2014. Chairman Zhang completed both the &ldquo Global CEO Program for China&rdquo jointly organised by Harvard Business School, China Europe International Business School and IESE Business School and the &ldquo China CEO Program&rdquo organised by Cheung Kong Graduate School of Business.
https://forchn-intl.com/about-us/management-team/
Zhang Guobiao
Chairman, Forchn Holdings Group & EC World REITMr. Zhang Guobiao is the Chairman of Forchn Holdings Group and SGX mainboard-listed EC World REIT.
Chairman Zhang established Forchn Holdings in Pudong, Shanghai in 1992. After over 25 years of hard work, he has transformed the company from its humble trade beginnings in building materials, and since diversified its portfolio to include e-commerce logistics services and warehousing, e-commerce real estate, health & wellness, manufacturing and financial services. Chairman Zhang is also the Executive Vice Chairman of the Zhejiang Chamber of Commerce in Shanghai. He also received the Award of Excellence by the Third Global Zhejiang Entrepreneurs Convention in 2015 and the Zhejiang Merchant of the Year for 2014. Chairman Zhang completed both the &ldquo Global CEO Program for China&rdquo jointly organised by Harvard Business School, China Europe International Business School and IESE Business School and the &ldquo China CEO Program&rdquo organised by Cheung Kong Graduate School of Business.
https://forchn-intl.com/about-us/management-team/
Starship ( Date: 17-May-2021 18:52) Posted:
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Another low-ball offer similar to Accordi Golf Trust???
EC World REIT announces potential divestment of properties to consortium of purchasers
Mon, May 17, 2021 / 5:41 PM
The manager of EC World REIT has revealed on May 17, that it has been approached by Forchn International for the potential transaction involving the REIT&rsquo s interests in all its properties.
The transaction may or may not lead to the divestment of said properties.
No exclusive or binding arrangements related to the discussions have been entered into.
Forchn International is said to be leading the discussions on behalf of a consortium of purchasers.
Nothing has been confirmed, says the manager of the REIT, including the price or terms of the divestment.
BofA Securities is the sole financial adviser to the manager in connection with the potential transaction.
https://www.theedgesingapore.com/news/reits/ec-world-reit-announces-potential-divestment-properties-consortium-purchasers
EC World REIT announces potential divestment of properties to consortium of purchasers
Mon, May 17, 2021 / 5:41 PM
The manager of EC World REIT has revealed on May 17, that it has been approached by Forchn International for the potential transaction involving the REIT&rsquo s interests in all its properties.
The transaction may or may not lead to the divestment of said properties.
No exclusive or binding arrangements related to the discussions have been entered into.
Forchn International is said to be leading the discussions on behalf of a consortium of purchasers.
Nothing has been confirmed, says the manager of the REIT, including the price or terms of the divestment.
BofA Securities is the sole financial adviser to the manager in connection with the potential transaction.
https://www.theedgesingapore.com/news/reits/ec-world-reit-announces-potential-divestment-properties-consortium-purchasers
EC World Reit' s Q1 DPU up 32.3%
EC World Real Estate Investment Trust' s (EC World Reit) distribution per unit (DPU) rose 32.3 per cent to 1.532 Singapore cents for the first quarter ended March 31, 2021, from 1.158 cents the year before.
Gross revenue was up by 30.9 per cent to S$30.8 million. Net property income (NPI) also rose 30.9 per cent, to S$27.7 million.
The increases in gross revenue and NPI were mainly due to the absence of one-off rental rebates given to tenants to mitigate the adverse impact of the Covid-19 situation and the strengthening of the yuan by 3.5 per cent year-on-year.
Distribution to unitholders rose 32.9 per cent to S$12.4 million. EC World Reit' s policy is to distribute at least 90 per cent of the total distributable amount. The manager has decided to retain 10 per cent due in part to uncertainties from the prolonged pandemic.
Distributions are expected to be made on June 29.
As at March 31, 2021, the occupancy of Reit' s eight properties was 99.1 per cent.
Aggregate leverage was 38.3 per cent with a blended running interest rate of 4.1 per cent for Q1 FY21 and a weighted average debt maturity of 1.4 years.
The board has decided to maintain a gearing ratio of not more than 40 per cent for prudent financial management, it said.
What is your views on the below news....positive or negative.....
Joelton ( Date: 08-May-2021 20:39) Posted:
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EC World REIT renews second major lease in relation to Hengde Logistics
The manager of EC World REIT has renewed a second major lease of some 74,057 sqm in relation to Hengde Logistics with China Tobacco Zhejiang Industrial.
The second major lease (Phase 2 renewal) came after the successful renewal of 152,752 sqm of space in October 2020 (Phase 1 renewal).
During the Phase 2 renewal, China Tobacco committed to a lease term of 2.65 years to coincide with the expiry of the Phase 1 renewal.
Both leases with China Tobacco will expire on Dec 31, 2023.
Although the renewal rental rate contracted for the Phase 2 renewal is 8.8% lower than the existing rental rate, the effective blended rental rate of Phase 1 renewal and Phase 2 renewal is 2.2% lower than the effective blended rental rate of the expiring China Tobacco leases at Hengde Logistics Phase 1 and Phase 2.
According to CBRE&rsquo s MarketView 4Q2020 report, the rental rates for the logistics sector in Hangzhou showed a year-on-year decline of 1.9%.
The Phase 2 renewal is expected to reduce EC World REIT&rsquo s revenue by 0.8%, as China Tobacco will no longer require the warehouse management services for the renewal, similar to the one in Phase 1.
&ldquo We are heartened by the continued support from China Tobacco in relation to this renewal of lease at Hengde Logistics Phase 2. This is a testament to the quality of EC World REIT&rsquo s asset and the positive working relationship with our tenants. We will continue to work closely with the property manager in China to ensure portfolio quality and predictable returns to the portfolio,&rdquo says Goh Toh Sim, executive director and CEO of the manager.
Displacement and collapse of berth at EC World Reit' s Chongxian Port Investment
THE manager of EC World Real Estate Investment Trust (Reit) announced that there had been an incident of displacement and collapse of a berth at its Chongxian Port Investment, resulting in the damage of two gantry cranes located within the vicinity of the berth.
Due to the location of the damaged area, the operations at the damaged berth and its two adjacent berths have been suspended, said the manager in a bourse filing on Friday. No injuries were reported, and the rest of the port operation remains unaffected.
Chongxian Port Investment is a port logistics asset with 23 berths and is located in the west of Chongxian New City, north of Hangzhou, on the east bank of the Beijing-Hangzhou Grand Canal. It has a total designed annual throughput capacity of some six million tonnes.
A team from the property manager was on site immediately to assess the damage, and the incident has been reported to the relevant governmental agencies as well as the insurer, said EC World Reit' s manager.
The cause of the incident is still being investigated, and it is working closely with the insurer to assess the quantum of revenue loss and property damage recoverable by insurance claims, it added.
Yes I would expect ECommerce can still do ok in pandemic. Yet there is late rental payment penalty.....puzzling. Market seem not concerned since share price can still close unchanged from yesterday and with strong buying interests.....puzzling. I was considering buying last week before this issue. Will postpone to watch how story goes...
laksaman57 ( Date: 16-Mar-2021 16:26) Posted:
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eCommerce should benefit most during covid and yet late payment.
CapMall, Starhill reit are multi-tenanted. A few late payments or even close shop also ok.
But EC World reit tenants are master lessees. Impact are significant.
CapMall, Starhill reit are multi-tenanted. A few late payments or even close shop also ok.
But EC World reit tenants are master lessees. Impact are significant.
cmengchan ( Date: 16-Mar-2021 15:02) Posted:
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My opinion on " late payment of rents" concerns for REITs.
During the Covid lockdowns, many of the S-REITS (CapMall, Starhill, etc) wavied the rentals for up to 2 months, using the renters' security deposit to offset the late rents. I am not sure if other industrial REITS gave similar rent support but I think they are country-specific and depends on extend of the lockdown impact imposed by their government. For Singapore, some of these " rent support" are laws passed by the government that is specific to property owners. I am sure all REITS have similar clauses on late payment of rents.
For EC REIT, the late rents payment clause should be similar. So, I don' t see this " wavier" as any different from " rental support" that other REITS and property owners provide to their customers. The " late payment fees" would be extra income for EC REIT, but I don' t think it impacts their overall risks.
It will be more worrying if the late rent payments are still being delayed after China had eased the lockdowns. However, it will not be level of business as before the Covid, but I think it has stabilized.
Since EC REIT is part of the eCommerce supply chain industry, I would believe their business activities are not that badly impacted. Definitely some of their costs will increase due to safety measures, extra cleaning, etc... that are needed as part of easing from lockdowns. At least it will not be as bad as Travel and Hospitality industries where their revenue sources disappeared overnight.
Like all other REITS and investment, we just have to monitor closely for potential issues.
During the Covid lockdowns, many of the S-REITS (CapMall, Starhill, etc) wavied the rentals for up to 2 months, using the renters' security deposit to offset the late rents. I am not sure if other industrial REITS gave similar rent support but I think they are country-specific and depends on extend of the lockdown impact imposed by their government. For Singapore, some of these " rent support" are laws passed by the government that is specific to property owners. I am sure all REITS have similar clauses on late payment of rents.
For EC REIT, the late rents payment clause should be similar. So, I don' t see this " wavier" as any different from " rental support" that other REITS and property owners provide to their customers. The " late payment fees" would be extra income for EC REIT, but I don' t think it impacts their overall risks.
It will be more worrying if the late rent payments are still being delayed after China had eased the lockdowns. However, it will not be level of business as before the Covid, but I think it has stabilized.
Since EC REIT is part of the eCommerce supply chain industry, I would believe their business activities are not that badly impacted. Definitely some of their costs will increase due to safety measures, extra cleaning, etc... that are needed as part of easing from lockdowns. At least it will not be as bad as Travel and Hospitality industries where their revenue sources disappeared overnight.
Like all other REITS and investment, we just have to monitor closely for potential issues.