“The board and the potential buyer have not reached an agreement yet on the sale of ECWREIT’s assets (net asset value per share stands at $0.95 as of 3Q2021). Management will make an official announcement once the deal is confirmed. There remains an upside should this deal go through given unit price is now trading at 15% below book value, in our view. We note that investors are getting paid 8+% yield, while waiting for the outcome,” suggests a recent Soochow CSSD Capital Markets report.
A couple of Chinese S-REITs — that is locally listed REITs with mainland Chinese assets — have encountered some headwinds. That is not the case with EC-World REIT, which with its port logistics assets and warehouses, should be having a fair tailwind. So far, so good.
Following the release of EC-World REIT’s 3QFY2021 results for the quarter on Sept 30, analysts covering it are hopeful of an asset sale. In May, ECWorld REIT’s unit price — which had been trading in the 71 cents to 75 cents range — was boosted by an announcement. Its manager announced it had been approached by Forchn International — the sponsor — in relation to a potential transaction involving ECWorld’s interests in all of its properties, which may or may not lead to the divestment of these properties. Since then and the boost to unit price, ECWorld REIT’s manager has not made any further announcements.
