2 Things Investors Should Know About EC World Real Estate Investment Trust Right Now | The Motley Fool Singapore
EC World Real Estate Investment Trust (SGX: BWCU), or EC World REIT, is the first Chinese specialised logistics and e-commerce REIT that was listed here in July 2016. There are two things to know about the REIT right now: its latest financial performance and valuation.
Here is a table showing important items from EC World REIT’s financial performance for the third quarter of financial year ending 31 December 2018.
Source: EC World REIT Results Presentation
The REIT’s net property income (NPI) came in stronger due to a new acquisition, partially offset by a weaker Renminbi. Distribution per unit (DPU) grew by 9% year-on-year due to the higher NPI, absence of withholding tax for distribution in this quarter, as well as lower trust expenses. Without the withholding tax incurred last year, the DPU would have grown 2.3% year-on-year.
As at 30 September 2018, the REIT clocked in a gearing ratio of 30.7% while its committed occupancy rate stood at 99.2%.
There are two useful valuation metrics for assessing REITs. They are the price-to-book (PB) ratio, and the distribution yield.
The table below shows EC World REIT’s PB ratio and distribution yield. It also shows the respective averages for the two valuation metrics for the 41 REITs that are in Singapore’s stock market.
Source: SGX StockFacts
We can see that EC World REIT’s valuation is at a discount to the market average, both in terms of PB ratio and distribution yield.
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