Note: Trading of EC World REIT’s units has been suspended since 31 August 2023, due to its inability to repay its offshore interest expenses due to cash flow difficulties stemming from rental default by its Sponsor. Distribution payouts has also been suspended, and it is likely to continue in the current financial year 2025.
Listed back in July 2016, EC World REIT (SGX: BWCU) is a China-based REIT where its investment focus is in properties used primarily for e-commerce, supply chain management, and third-party logistics purposes.
As of 31 December 2024, its portfolio comprises of 7 properties located in Hangzhou (in the Yangtze River Delta), as well as Wuhan, valued at approximately S$714 million.
The REIT just concluded its annual general meeting (AGM) for FY2024 ended 31 December 2024, with all the 3 resolutions (on the adoption of the audited financial statements of the REIT and the annual report, re-appointment of BDO LLP as the auditors of the REIT, along with authority for the Manager of the REIT to issue new units) were passed with at least 96% of the votes in favour.
Yesterday evening (14 May), EC World REIT released its financial results for the 1st quarter of FY2025, and in this post, you’ll find my review of its latest financial figures, portfolio occupancy and debt profile:
Financial Figures (1Q FY2024 vs. 1Q FY2025)
| 1Q FY2024 | 1Q FY2025 | % Variance | |
| Gross Revenue (S$’mil) | $25.3m | $12.7m | -49.8% |
| Property Operating Expenses (S$’mil) | $2.0m | $1.9m | -5.0% |
| Net Property Income (S$’mil) | $23.3m | $10.8m | -53.6% |
| Distributable Income to Unitholders (S$’mil) | $7.3m | – | N.M. |
EC World REIT’s financial results took a tumbling in 1Q FY2025, compared to a year ago.
Particularly, the 49.8% and 53.6% year on year plunge in its gross revenue and net property income to S$12.7 million and S$10.8 million respectively was mainly due to the termination of master lease agreements upon lease expiry (for Chongxian Port Investment, Beigang Logistics Stage 1, Fu Heng Warehouse, as well as for Fuzhou E-commerce), lower contribution from underlying leases, partially offset by income contribution from new 3rd party leases secured for Hengde Logistics Phase 1, along with higher late fee income.
As a result of this, there’s no distributable income to unitholders.
Portfolio Occupancy Profile (4Q FY2024 vs. 1Q FY2025)
In the table below, you’ll find a comparison of EC World REIT’s latest portfolio profile recorded for the 1st quarter of FY2025 (ended 31 March 2025) compared against that recorded in the previous quarter 3 months ago (i.e., the 4th quarter of FY2025 ended 31 December 2024):
| 4Q FY2024 | 1Q FY2025 | |
| Portfolio Occupancy (%) | 86.3% | 86.6% |
| Portfolio WALE (by Gross Rental Income – years) | 1.2 years | 1.3 years |
The slight improvement in EC World REIT’s portfolio occupancy (up by 0.3 percentage points to 86.6%) can be contributed by improvements in the occupancy rate in Fuzhou E-commerce (up from 72.3% in 4Q FY2024 to 74.5% in 1Q FY2025), Wuhan Meiluote (up from 77.4% in 4Q FY2024 to 84.1% in 1Q FY2025), as well as in Chongxian Port Logistics (up from 95.9% in 4Q FY2024 to 97.5% in 1Q FY2025).
On the other hand, 73.8% of its leases will be due over the next 3-quarters of the current financial year.
Debt Profile (4Q FY2024 vs. 1Q FY2025)
Just like how I have reviewed the REIT’s portfolio occupancy profile in the previous section, I’ll also be doing the same for its debt profile – by comparing the statistics reported in 1Q FY2025 against that reported in 4Q FY2024, and you can find them in the table below:
| 4Q FY2024 | 1Q FY2025 | |
| Aggregate Leverage (%) | 56.5% | 56.8% |
| Average Term to Debt Maturity (years) | 0.7 years | 0.4 years |
| Average Cost of Debt (%) | 8.2% | 8.8% |
EC World REIT’s debt profile have continued to weaken further – with its aggregate leverage and average cost of debt up to a high of 56.8% and 8.8% respectively.
As far as the REIT’s debt maturity is concerned, the onshore facility will mature on 30 April 2026, with the offshore facility maturing on 31 May 2025 according to the Pre-Enforcement Notice.
CEO Mr Goh Toh Sim’s Comments & Outlook (from the REIT’s Press Release)
“On quarterly basis, the revenue in RMB terms was 20.3% lower compared to 4QFY2024 mainly due to termination of master leases. The Manager has been continuing to negotiate with the Sponsor for a Master Offset Agreement to resolve the outstanding receivables.
The Manager is actively exploring options to divest some or all of the Group’s properties to pare down existing facilities with cash proceeds in order to be accepted by the lenders of the Offshore Facility for a possible refinancing or restructuring. At the date of this announcement, the Group has not received any offer to purchase from potential buyers, nor any notice of enforcement action from the lenders. In the meantime, the Manager, under the close guidance of all independent directors, continues to make its best endeavour to stabilise the performance of the ECW Group amid the ongoing persisting challenges from operation and financing activities.”
Closing Thoughts
The only silver lining in my personal opinion is the slight improvement in its portfolio occupancy – which was up from 86.3% in 4Q FY2024 86.6% in 1Q FY2025. However, a majority of the leases (a high of 73.8%) will be expiring this year – should the tenants decide not to renew their leases, EC World REIT’s financial performance will see a further dent.
And speaking of which, its gross revenue and net property income for 1Q FY2025 plunged by 49.8% and 53.6% year on year mainly due to the termination of master lease agreements upon lease expiry for some of its properties.
The REIT’s debt profile deteriorated further (again its not surprising, given the current situation), with its aggregate leverage and all-in cost of debt at a high of 56.8% and 8.8% respectively.
On the whole, it seems like the whole situation have gone from bad to worse. In my personal opinion (considering the further plunge in its financial performance, and weakening of its debt profile to the extent where its all-in cost of borrowing have spiralled up a lofty level of 8.8%), the REIT is drifting closer towards liquidation (with existing unitholders suffering a total loss from their investment in the REIT). Anything else at this point in time will be a big bonus.
This brings me to the end of my review of EC World REIT’s latest financial results for 1Q FY2025. Do take note that all the opinions expressed in this post is purely mine which I’m sharing for educational purposes only.
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Disclaimer: At the time of writing, I am a unitholder of EC World REIT.
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