Listed only in July this year, EC World REIT (SGX: BWCU) is a new real estate investment trust in Singapore?s stock market.
Recently, my colleagues and I were invited to meet Peter Lai, the chief executive of EC World REIT?s manager, EC World Asset Management Pte Ltd. Present at the meeting as well was Lai?s colleague, Goh Toh Sim, an executive director of EC World Asset Management.
Over a lunch of pizza, here?s what The Motley Fool Singapore heard about EC World REIT from its two leaders.
An aggressive growth plan
Although the REIT?s current portfolio consists of six properties which are all…
Listed only in July this year, EC World REIT (SGX: BWCU) is a new real estate investment trust in Singapore’s stock market.
Recently, my colleagues and I were invited to meet Peter Lai, the chief executive of EC World REIT’s manager, EC World Asset Management Pte Ltd. Present at the meeting as well was Lai’s colleague, Goh Toh Sim, an executive director of EC World Asset Management.
Over a lunch of pizza, here’s what The Motley Fool Singapore heard about EC World REIT from its two leaders.
An aggressive growth plan
Although the REIT’s current portfolio consists of six properties which are all located in China, management has plans to increase its portfolio aggressively over the next few years. EC World Asset Management is looking at properties controlled by its sponsor as well as those owned by third-parties.
Over the longer term, EC World REIT is also open to other e-commerce-related properties outside of China, in particular, in the Southeast Asia region.
At the moment, EC World REIT has master lease agreements with its sponsor on three of its properties to provide stable recurring income. These properties are the Stage 1 Properties of Bei Gang Logistics, Chongxian Port, and Fu Heng Warehouse.
Although it is still too early to have a clear plan at the moment, the REIT may want to have lease agreements in the future that are tied to e-commerce volumes handled within its properties so as to widen its exposure to e-commerce.
However, that might mean that income from its e-commerce-related properties could become more volatile as a result.
Right now, over half of EC World REIT’s portfolio is not related to e-commerce. But, EC World Asset Management commented that these properties were injected into the REIT to give it a little more consistency in revenue at the start.
Going forward, the trust would focus on e-commerce-related properties.
Both Lai and Goh are veterans in the business world.
Lai started his career with the Monetary Authority of Singapore and has spent most of his life in the financial industry, working in several banks.
Goh has wide experience working in China, having led the Singapore-Suzhou Township Development in the past. He had also served as the chief executive of Ascendas China before moving on to be the China representative for Keppel Land, the real estate arm of Keppel Corporation Limited (SGX: BN4).
A Foolish Summary
EC World REIT is at the very beginning of its journey in its quest to become a major e-commerce-related REIT.
It is still too early to make a good guess as to how the REIT’s business would eventually perform, but it is definitely worth watching for investors who are interested in both China and the e-commerce industry.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim owns shares in Keppel Corporation.