Post Reply
441-453 of 453
I own some ec world reit. Thinking of adding more as it is currently trading at a huge discount to it NAV. Yield is not bad too........
The Hidden Gem of this company is so well hidden that many CEOs gave up searching after failing to find it.....................
SIAS Question 1
On 23 March 2018, the REIT announced the appointment of Mr. Goh Toh Sim as Chief Executive Officer (&ldquo CEO&rdquo ) of EC World Asset Management Pte. Ltd., the manager of the REIT. Mr. Goh was appointed the Acting CEO on 14 February 2018 following the resignation of Mr. Alvin Cheng Yu-Dong.
The former CEOs of the REIT managers did not stay on the job for long. Mr. Alvin Cheng Yu-Dong was appointed on 4 May 2017 and resigned on 9 Feb 2018 " to pursue other professional interests.&rdquo
Mr. Lai Hock Meng held the position from 1 Oct 2015 to 22 April 2017 and left to " pursue personal and other business interests&rdquo .
(i) Can the board help shareholders understand if there were extenuating circumstances that led to the frequent changes of the CEO of the manager?
(ii) What is the search process for senior management, especially the CEO?
(iii) How does the manager ensure that it can attract a CEO who is highly capable, has experience of the markets/sectors and has his interests aligned so as to create long term value for the REIT and its unitholders?
http://infopub.sgx.com/FileOpen/ECWREIT_RESPONSE_SIAS_QUERIES_200418.ashx?App=Announcement& FileID=500224
From Motley Fool 21 March 2018
EC World Real Estate Investment Trust (SGX: BWCU), or ECW for short, is the first REIT in Singapore that is focused on e-commerce and logistic assets in China. It currently owns six properties located in Hangzhou. Last month, ECW announced that it would be making its first acquisition since its listing in 2016. The proposed acquisition is for an e-commerce logistic asset located in Wuhan City in Hubei Province in China.
Details of the transaction
The property has a land tenure of 48 years, and a purchase consideration price of S$30.3 million or RMB 145 million. According to management, the purchase price is a 15.2% discount to the property valuation. Including the manager acquisition fee and other transaction fees, ECW will have to fork out around S$31 million for the property. The property consists of three warehouse buildings, one 5-story auxiliary building, and 6-story dormitory. At the time of the announcement, it had an occupancy rate of 82.2%, and weighted average lease expiry (WALE) of 2.3 years by rental income. Based on a pro-forma basis, the property would have added S$1.4 million to net property income for 2017. ECW has proposed for the acquisition to be wholly funded by internal cash, thus maintaining the REIT&rsquo s low gearing ratio of 29.2%.
Impact on unitholders
Because the acquisition will be funded solely with existing cash, unitholders will stand to gain from the increased property income from the acquisition. In its presentation, ECW stated that the transaction would have increased distribution per unit (DPU) by 0.8% in 2017. By maintaining its low gearing ratio, ECW will continue to have debt headroom for further acquisitions in the future. The new property has a current net property income yield of 4.9%. This is slightly lower than its current portfolio yield of 6.2%. That said, the occupancy rate is also below that of its existing portfolio. If management is able to increase the occupancy rate to comparable levels, the yield on the new property should increase too.
Optimistic about growth
The property is anchored by two stable tenants in JD.com and DangDang. JD.com is one of the largest e-commerce companies in China. It is listed on Nasdaq and has a market cap of around US$70 billion. DangDang is a popular integrated online shopping platform in China, and has the largest maternal and baby products online platform. There are also macroeconomic tailwinds within the city that bode well for the appeal of the new property. Wuhan city has seen its GDP grow by 12.1% compounded annually since 2011. Retail sales of consumer goods have grown at an even faster pace of an annualised growth rate of 13.1%. Most of the current leases in the property also have built-in escalations of between 4.5% and 5%, giving the opportunity for positive rental reversions in the future.
The Foolish bottom line
The first acquisition by ECW looks like a prudent one that can benefit unitholders, without destabilising their balance sheet. However, as the acquisition is relatively small, it only has a minor impact on the overall distributions for unitholders. It will be interesting to see how ECW utilises its debt headroom to fuel further growth in the future.
EC World Real Estate Investment Trust (SGX: BWCU), or ECW for short, is the first REIT in Singapore that is focused on e-commerce and logistic assets in China. It currently owns six properties located in Hangzhou. Last month, ECW announced that it would be making its first acquisition since its listing in 2016. The proposed acquisition is for an e-commerce logistic asset located in Wuhan City in Hubei Province in China.
Details of the transaction
The property has a land tenure of 48 years, and a purchase consideration price of S$30.3 million or RMB 145 million. According to management, the purchase price is a 15.2% discount to the property valuation. Including the manager acquisition fee and other transaction fees, ECW will have to fork out around S$31 million for the property. The property consists of three warehouse buildings, one 5-story auxiliary building, and 6-story dormitory. At the time of the announcement, it had an occupancy rate of 82.2%, and weighted average lease expiry (WALE) of 2.3 years by rental income. Based on a pro-forma basis, the property would have added S$1.4 million to net property income for 2017. ECW has proposed for the acquisition to be wholly funded by internal cash, thus maintaining the REIT&rsquo s low gearing ratio of 29.2%.
Impact on unitholders
Because the acquisition will be funded solely with existing cash, unitholders will stand to gain from the increased property income from the acquisition. In its presentation, ECW stated that the transaction would have increased distribution per unit (DPU) by 0.8% in 2017. By maintaining its low gearing ratio, ECW will continue to have debt headroom for further acquisitions in the future. The new property has a current net property income yield of 4.9%. This is slightly lower than its current portfolio yield of 6.2%. That said, the occupancy rate is also below that of its existing portfolio. If management is able to increase the occupancy rate to comparable levels, the yield on the new property should increase too.
Optimistic about growth
The property is anchored by two stable tenants in JD.com and DangDang. JD.com is one of the largest e-commerce companies in China. It is listed on Nasdaq and has a market cap of around US$70 billion. DangDang is a popular integrated online shopping platform in China, and has the largest maternal and baby products online platform. There are also macroeconomic tailwinds within the city that bode well for the appeal of the new property. Wuhan city has seen its GDP grow by 12.1% compounded annually since 2011. Retail sales of consumer goods have grown at an even faster pace of an annualised growth rate of 13.1%. Most of the current leases in the property also have built-in escalations of between 4.5% and 5%, giving the opportunity for positive rental reversions in the future.
The Foolish bottom line
The first acquisition by ECW looks like a prudent one that can benefit unitholders, without destabilising their balance sheet. However, as the acquisition is relatively small, it only has a minor impact on the overall distributions for unitholders. It will be interesting to see how ECW utilises its debt headroom to fuel further growth in the future.
What tax? Imposed by which government?
toshiyosh ( Date: 28-Feb-2018 16:00) Posted:
|
DPU for 4Q2017 is 1.504 cents. More than 4% over 3Q DPU. Nice.
Is EC World Reit affected by the 17% tax that the govt is looking to impose on REITs?
Hmm.....0.755.....Better wait for it to drop further first.....
I understand that. Just that when compared to CRCT and I believe is Daxin reit, the interest is higher.
As long as they can manage the interest rate, I believe this is a gem that had not gone up yet. Still below it ipo price and had a much greater NAV compared to it share price and high dividend.
As long as they can manage the interest rate, I believe this is a gem that had not gone up yet. Still below it ipo price and had a much greater NAV compared to it share price and high dividend.
In China, the inetrest rate landscape is diff from SG, 5% for commercial loan is quite reasonable, even on the lower side !
plus land appreciation is much higher -> give you example, in 2008/2009, I purchased one apt in China and one condo. in SG respectively after 9 years, my China prop market value is x 5 and my SG prop is by x 1.75 The warehouses and facilities of EC World are strategically located in Hangzhou, one of the most dynamic and vibrant economic zones in China !
e.g the latest RMB Loan Prime Rate is around 4.95% for mid term loan for State owned Enterprise. as you can see, 5% is quite reasonable for EC World !
plus land appreciation is much higher -> give you example, in 2008/2009, I purchased one apt in China and one condo. in SG respectively after 9 years, my China prop market value is x 5 and my SG prop is by x 1.75 The warehouses and facilities of EC World are strategically located in Hangzhou, one of the most dynamic and vibrant economic zones in China !
e.g the latest RMB Loan Prime Rate is around 4.95% for mid term loan for State owned Enterprise. as you can see, 5% is quite reasonable for EC World !
jamesng ( Date: 06-Jan-2018 16:38) Posted:
|
Agree. But their interest rate for debt is a bit on the high side. Do you know?
NAV: ~SGD 90cents
last trading price: SGD 77cents
yield: ~7.4%
occupancy rate: 100% for all its warehouses
The REIT is in Hangzhou (where Alibaba HQ is located). Providing logistics and warehousing facilities to big name like Alibaba, JD, etc...
BTW, Hangzhou Bay Area is under planning by central gov in Beijing.
The CEO is Alvin Cheng (Singaporean and ex-CEO of Lippo Mall Indo Trust).
Accumulate and Hold EC World Tight, Awaiting Harvest Seasons for Reaping Fruits !
Given the explosivedevelopment of e-Commerce in China, the best is as yet to come ...
I am invested and DYODD.
last trading price: SGD 77cents
yield: ~7.4%
occupancy rate: 100% for all its warehouses
The REIT is in Hangzhou (where Alibaba HQ is located). Providing logistics and warehousing facilities to big name like Alibaba, JD, etc...
BTW, Hangzhou Bay Area is under planning by central gov in Beijing.
The CEO is Alvin Cheng (Singaporean and ex-CEO of Lippo Mall Indo Trust).
Accumulate and Hold EC World Tight, Awaiting Harvest Seasons for Reaping Fruits !
Given the explosivedevelopment of e-Commerce in China, the best is as yet to come ...
I am invested and DYODD.