EC World Reit’s H1 net property income falls 60.3% to S$18.7 million

[SINGAPORE] EC World Real Estate Investment Trust (Reit) reported a 60.3 per cent decline in net property income to S$18.7 million in the first half of FY2025, as it continues to face significant financial and cash flow challenges.

Revenue fell 56 per cent to S$22.6 million, from S$51.2 million in the year-ago period, the Reit’s manager said in a bourse filing on Wednesday (Aug 13).

No distribution has been declared for H1, due to insufficient funds. 

Trading in the Reit’s units has been suspended since August 2023, when the manager disclosed that ECW Group, comprising the Reit and its subsidiaries, could not fully repay its offshore interest expenses.

EC World Reit’s significant fall in revenue and net property income was due largely to the termination of master lease agreements upon the lease expiry of several assets. There were also lower contributions from underlying leases. 

One of the assets with terminated master lease agreements is Fu Heng Warehouse in Hangzhou. EC World Reit previously said it was mortgaged without the consent or knowledge of its manager in favour of a local government-linked entity in China.

“The manager remains focused (on actively exploring) options to divest some or all of the group’s properties to pare down existing loan facilities with cash proceeds,” it said. 

“At the date of this announcement, the group has not received any offer to purchase from potential buyers, nor any notice of enforcement action from the lenders,” it added.

“In the meantime, the manager, under the close guidance of all independent directors, continues to make its best endeavour to stabilise the performance of EC World Reit (and its subsidiaries) amid the ongoing persisting challenges from operation and financing activities.”

EC World Reit last traded at S$0.28 on Aug 28, 2023.