SEE:Gloves a hot investment in Covid-19 crisis
But EC World REIT is not just the stuff of value investor’s dreams - it could potentially be a lucrative growth play too. The first specialised and e-commerce logistics REIT listed on the SGX, it owns a portfolio of quality real estate in China. These are based in one of the largest e-commerce clusters of Hangzhou in the Yangtze River Delta and Wuhan.
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“We understand that management will be aiming to sign short-term leases for renewals as market rents are relatively weak currently and do not reflect the true potential rents of the properties,” say the DBS analysts. They note that EC World REIT intends to recommence signing longer leases when rents have stabilised. EC World REIT’s balance sheets have improved on the back of low rates, with FY2020 gearing improving 0.6% y-o-y to 38.1%. All-in borrowing costs improved slightly from 4.5% in FY2019 to 4.3% in FY2020. Lai and Tan see further saving in borrowing costs ahead due to present low interest rates, with significant savings expected for FY2022 as one of the REIT’s larger loans mature. As of 2.56pm, EC World REIT is trading flat at $0.72. It offers a 7.39% dividend yield and has a P/E of 12.26.