A Day Visit to EC World REIT's Properties

ec world reit reits stocks Nov 04, 2019

by: Jimmy Chai

All examples and stocks quoted here in this article and on the ProButterfly.com and REITScreener.com site are for learning purposes; it does NOT constitute financial advice or a Buy/Sell recommendation. Contents are reflective of personal views and readers are responsible for their own investments and are advised to perform their own independent due diligence and take into account their own financial situation. If in any doubt about the investment action you should take, you should consult a professional certified financial adviser.

EC world REIT is uniquely exposed to China’s ecommerce sector, which has been a fast growing sector in China.

We have the opportunity to visit EC World last month and get to understand a little more about ecommerce logistic.

The properties are located Fuyang, which I came to know, Fuyang was re-zone to be part of Hangzhou, the home of Alibaba. Due to this re-zone, the residential property in Fuyang has generally appreciated nearly 50%. This is from the driver who drove us from Hangzhou city centre to Fuyang town.

The first stop was Ruyicang (如意倉), held by Hangzhou Fuyang Yunton E-commerce company. Ruyicang service reputable e-commerce platform – Taobao and JD.com.

A bright signboard with Ruyicang on it. Further down the aisle, is the control center. An impressive real time parcel monitoring system. It shows the numbers of online orders, the number of parcels and the accumulate number of parcels.

Muiti-screens showing the various activities in various warehouse in real time. The control center monitors activities and ensure smooth operation within the warehouses.

The company milestones. Integrated service via various ecommerce platform. They are going green with recycle boxes

One of the semi-automated warehouses where all the goods are stores. Parcel are guaranteed to ship to Hangzhou distribution centre within 24 hours and the buyers can receive their merchandise the following day.

Building a full automated warehouse. See the shelf is closed to one another to maximise space

2nd stop is Hengde Property. This property only serves 2 tenants. Both are tobacco companies. The warehouse is used to age tobacco number of years before making into cigarettes. The warehouse provides regular QC and simple tobacco leaves cutting at tenants’ request too.

3rd stop is the port logistic, Chongxian Port logistic. There are a list of tenants from the steels industry. The steel company dock their ship, unload them and store in their warehouse or open space. The steel is to distribute to the Zhejiang area.

There are 2 types of tenants. One that rent only space and the tenants build their own crane and the maintain the warehouse. The other is to rent the space and the facility

The final stop is the E-commerce logistic, Bei Gang logistic. The area is the small community or county on its own. It has offices, shops, cinemas, KTV, residential area. It is also where sellers can setup their office in the properties to for online-offline retail outlets.

We visit one of the building and we saw rows of mini-studio where sellers can lease them to do streaming to Tik-Tok, Taobao, Meitu, Tianmao, Meipai and many more. This is the digital age of marketing in China.

It is an one day trip to visit 4 of EC World properties. A learning journey seeing how ecommerce has transformed China retail scene and the consumer quick to adapt to those changes. Through the conversation with the manager, the ecommerce platforms continue to push such changes to be more efficient by using robotic and AI technology. Their aim is to deliver the parcel to customer within hours after placing online orders; enhancing buyers’ experience.

Live streaming is the new digital marketing and there are about 200 streaming sites in China. It is similar to Home Shopping channel in old economy. More merchandisers are using influcers to livestream to sell product online. Although EC World only deal with master lease, we shall see if EC World Bai Gang is able to grow this pool of tenants and become a important hub for O2O business.

It is worth mentioning that the property has 1% rental escalation on 1st Jan 2019 and 2020, another 1% from Nov 2020 to Oct 2024, which contribute to the revenue that distributed as DPU.

Positioning to Ride the Recovery

Opportunities and Risk Post-COVID-19 Pandemic in the various S-REIT Sectors

The COVID-19 crisis has brought about an unprecedented economic shock to many sectors, and yet it has also generated opportunities in others.

The tech sector has been a major beneficiary and along with that, S-REITs exposed to the Data Centre sector such as Keppel DC REIT and Mapletree Industrial Trust gained phenomenally.

But are the investment opportunities in REITs now gone? Personally, we do not think so. There are still many REITs below their pre-COVID-19 levels poise to recover strongly in the coming quarters – and now it is the best time to prepare to capture the post-COVID recovery.

Join us as we discuss the opportunities and risk in the S-REIT space sector-by-sector as we try to uncover recovery opportunities for FY2021 and beyond. Real estate sectors that we will be covering include the Retail, Hospitality, Offices, Healthcare, Industrial and Data Centres.

Our speaker Tam Ging Wien will be sharing his knowledge and experience including:

  • Part 1: A Survey of the REITs Landscape Around The World
  • Part 2: Key Metrics in Identifying Strong REITs
  • Part 3: Real Estate Sector Review Amidst the COVID Crisis
  • Part 4: Screening for Opportunities
  • Part 5: Q&A

Some key highlights that will be covered includes:

  • Real estate sector-by-sector review on COVID-19 impact and recovery opportunities. Sectors covered include the Retail, Hospitality, Offices, Healthcare, Industrial and Data Centres.
  • Opinion on which sector will continue to stay resilient and which are poised to recover quickly post-pandemic
  • The right metric to use when screening for high quality REITs
  • Case studies of REITs which are considered high quality
  • Step-by-step demo of how to screen for high quality REITs on your own

During the sharing session, various Singapore-listed REIT examples will be used.

There will also be a Q&A so that members of the investing community may engage in open dialog and discussions in order to deepen their understanding of REITs. Do prepare your writing materials for note taking.

Please note that the duration of the on-site seminar is 7pm to 9:45pm Singapore Time (GMT +8).

The details of the event are as follows:

  • Seminar: Positioning To Ride The Recovery
  • Date: 5th May 2021 (Wed)
  • Time: 7:00pm to 9:45pm
  • Venue: RNN Conference Centre - Kyoto Training Room (Level 4), 137 Cecil Street, Cecil Building #04-01, Singapore 069537
  • Fees: S$10.00
  • Sign-up Link: http://reitessentials.eventbrite.com/

To learn more about REITs, we recommend the article: What are REITs?


50% Complete

Investment Newsletter

Subscribe for our exclusive weekly newsletter. We do not share that content on the blog. It includes in-depth analysis on equities, IPO's & REITs. Join our exclusive inner circle today and get an edge in your investing!