Fu Heng Warehouse, one of six properties in EC World REIT's initial portfolio. (Photo: EC World REIT)Fu Heng Warehouse, one of six properties in EC World REIT's initial portfolio. (Photo: EC World REIT)

EC World REIT has reported a distribution per unit (DPU) of 1.501 Singapore cents for its 1Q 2019, which is an increase of 2.2% year-on-year.

The REIT’s gross revenue, and net property income in SGD terms were down 0.3% and 1.4% respectively in 1Q 2019.

This is primarily due to exchange rate differences - when taken in RMB terms, gross revenue and net property income were 3.0% and 1.9% higher respectively year-on-year.

The REIT’s committed portfolio occupancy was at 99.97% as at 31 March 2019.

EC World REIT’s aggregate leverage for the period was at 31.3%, with blended annualised running interest rate for the financial year at 4.1%.

With the release of its 1Q results, EC World REIT has also announced the proposed acquisition of Fuzhou E-Commerce, a 214,284-square metre integrated logistics asset in Hangzhou.

The property will be acquired for RMB1,112.5 million (SGD223.6 million) if approved by the REIT’s unitholders.

The purchase price represents a 7.5% discount to the average of two independent valuations, when calculated with master leases.

The property is 100% occupied, and is situated next to EC World REIT’s existing asset, Fu Heng Warehouse.

On a historical pro forma basis based on EC World REIT’s audited FY2018 financial results, this acquisition is expected to be both DPU and NAV accretive, increasing these metrics by 1.6% and 1.4% respectively.

As this is an interested party transaction, the REIT’s manager will be seeking independent unitholders’ approval for the acquisition.

EC World REIT has yet to give details as to how it intends to fund the acquisition.

The REIT was last done on the Singapore Exchange at SGD0.78.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.