EC World Reit’s Q1 DPU down 9.7% despite rise in property income

EC World Real Estate Investment Trust’s ( EC World Reit ) distribution per unit (DPU) declined 9.7 per cent to 1.383 Singapore cents for the first quarter ended March 31, 2022, from 1.532 cents the year before, despite increases in its net property income (NPI) and gross revenue.

NPI rose 7.4 per cent to S$29.7 million, from S$27.7 million previously. Gross revenue improved 4.4 per cent to S$32.2 million, from S$30.8 million previously.

In its bourse filing on Thursday (May 12), the Reit noted that the increase was mainly offset by withholding tax expenses paid for repatriation of funds as well as provision for pre-termination compensation to the third-party tenant at Fu Zhuo Industrial as a result of the compulsory expropriation.

As such, distribution to unitholders decreased by 9.4 per cent to S$11.2 million, from S$12.4 million previously. EC World Reit’s policy is to distribute at least 90 per cent of the total distributable amount. For Q1 2022, the manager has resolved to distribute 100 per cent of the total amount available for distribution to unitholders

Distributions are expected to be made on June 29.

As at March 31, 2022, the occupancy of Reit’s eight properties was 98.6 per cent.

Aggregate leverage was 37.3 per cent with a blended running interest rate of 5.9 per cent for Q1 2022 and a weighted average lease to expiry of 2.4 years.

While the Reit’s portfolio of properties has not been materially impacted by the recent China lockdowns, it is monitoring the situation in Hangzhou closely, said Goh Toh Sim, executive director and chief executive of the Reit manager.

“Headwinds persist domestically and globally. We are currently in the final stages of refinancing EC World Reit’s loans due in mid-2022 and expect the refinancing to be completed before the loans’ expiries,” said Goh.

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The counter closed down 1.6 per cent or S$0.01 at S$0.62 on Thursday, before the announcement.