We were in Hangzhou, Zhejiang province (China) to visit all six of EC World REIT’s current portfolio assets as well as its two right of first refusal (ROFR) assets on 13 March 2018. In addition to port logistics and specialised logistics, the REIT’s assets are in the e-commerce logistics sector, which is a pivotal sector in Hangzhou and where Alibaba’s global HQ is located at.
EC World REIT (ECW) listed on the SGX Mainboard on 28 July 2016 with six logistics assets in Hangzhou, relating to e-commerce, specialised logistics, and port logistics. Current portfolio valuation stands at S$1.3 bn, with a ROFR pipeline of two e-commerce properties from its sponsor, Forchn Holdings Group. The REIT announced in February 2018 its maiden acquisition since IPO, of an e-commerce asset in Wuhan, Hubei Province (China).
Site Visit Highlights
1. Direct exposure to burgeoning e-commerce sector
2. Strong backing from sponsor
3. Hangzhou key pillar of e-commerce logistics blueprint in China
No stock rating or price target provided, as we do not have coverage on ECW.
Peer Comparison – ECW has one of the highest dividend yields and lowest gearing levels among other listed S-REITs with assets exclusively located in China
Figure 1: ECW’s current portfolio stands at S$1.3 bn with a total NLA of 698,478 sqm
Figure 2: Breakdown of ECW’s portfolio by Gross Rental Income (GRI), Net Leasable Area (NLA) and by valuation
Currently, majority of ECW’s GRI is derived from its Port Logistics assets (46.6%), followed by its E-Commerce Logistics assets (37.1%) and Specialised Logistics assets (16.4%)
Maiden acquisition since IPO: Wuhan MeiLuoTe
Figure 3: Details of transaction
Direct exposure to burgeoning e-commerce sector
Figure 6: Post acquisition, e-commerce and specialised logistics assets will account for 67.2% of portfolio NLA
Strong backing from sponsor