EC World REIT 4Q18 net property income rose 16 percent on Wuhan Meiluote acquisition

EC World REIT's Fu Heng Warehouse in Dongzhou Industrial Park, Fuyang District, Hangzhou, China. It is an e-commerce distribution center. Credit: EC World REITEC World REIT's Fu Heng Warehouse in Dongzhou Industrial Park, Fuyang District, Hangzhou, China. Credit: EC World REIT

EC World REIT reported on Friday its fourth quarter net property income rose 16.1 percent on-year to S$20.84 million on the acquisition of the Wuhan Meiluote property in April 2018.

The REIT’s earnings also got a boost from built-in rental increases and positive rental reversions on new leases during the year, it said in a filing to SGX after the market close on Friday. Committed portfolio occupancy remained high at 96.9 percent, it added.

Gross revenue for the quarter ended 31 December was S$23.47 million, up 13.5 percent on-year, the REIT said.

The distribution per unit (DPU) for the quarter was 1.57 Singapore cents, up 4.4 percent from 1.504 Singapore cents in the year-ago quarter, EC World REIT said.

Goh Toh Sim, executive director and CEO of EC World Asset Management, which is EC World REIT’s manager, said in the statement that portfolio continued to perform well despite a challenging macroeconomic environment.

For the full year, net property income was S$87.34 million, up 5.6 percent on-year, on gross revenue of S$96.23 million, up 5.3 percent on-year, it said. Full-year DPU was 6.179 Singapore cents, up 2.6 percent from 6.025 Singapore cents in the previous year, it said.

The REIT issued a cautious outlook.

“The macroeconomic environment continues to be challenging in light of the ongoing U.S.-Sino trade tension,” the REIT said, but added, “Top policy makers in China indicated that monetary and fiscal measures will be implemented to stimulate the economy in 2019.”

It also announced on Friday that it proposed entering a new master lease agreements for its stage one properties of Bei Gang Logistics, Chongxian Port Investment and Fu Heng Warehouse.

“This will significantly extend ECW’s weighted average lease to expiry, provide income certainty and sustainability with organic growth through built-in rental escalations,” it said.

EC World REIT has a portfolio of seven properties located mainly in an e-commerce cluster in the Yangtze River Delta, specializing in e-commerce, supply-chain management and logistics.

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