Judging from its latest set of results, China-focused industrial landlord EC World REIT seems poised for a stellar run in the quarters ahead.
The REIT reported a DPU of 1.541 Singapore cents for its 1Q 2017 on 11 May, beating forecast made during its IPO of 1.464 cents by 5.3%.
Gross revenue and net property income for the period came in at SGD23.6 million and SGD21.6 million, trumping expectations by 4.6% and 5.4% respectively, while distributable income beat forcast by 3.5% at SGD12 million.
EC World REIT has attributed the set of results to strong operating performance of its properties, and lower financing costs and other expenses.
Also playing a part in the results were favourable SGD - RMB exchange rates that bolstered the REIT’s net property income.
The REIT’s committed portfolio occupancy stands at 100% but the underlying end-tenant occupancy has increased from 94.4% at listing to 98.3% as at 31 March 2017.
Given that the counter is currently trading at about 17% discount, EC World REIT seems to present itself as an enticing proposition to value hunters, especially given that the Chinese e-commerce market is expected to grow to about three times the size of the US this year.
However there are a couple of important questions to ask before taking the plunge in what is to-date Singapore’s only China-focused industrial REIT.