EC World Real Estate Investment Trust reported net property income of S$4.52 million for the quarter ended Mar 31, 2026, down 58.1% year-on-year, as lower tenant contributions and the loss of shortfall compensation from its sponsor trimmed the top line. Gross revenue fell 52.0% YoY to S$6.09 million.
The trust did not declare a distribution, reiterating earlier guidance that payouts will remain suspended until free cash flow improves.
Revenue contracted mainly because rental income from Bei Gang Stage 1 was derecognised after sponsor Forchn Holdings entered court-supervised reorganisation proceedings. Additional pressure came from the non-renewal of a third-party anchor lease at Hengde Logistics Phase II and the cessation of shortfall compensation and late-fee income previously paid by the sponsor group.
Headwinds intensified during the quarter. The Hangzhou Intermediate Court dismissed EC World REIT’s appeal against outstanding mortgages in January and issued April judgements upholding corporate guarantees totalling RMB 286 million. Separately, the same court ruled on 6 May that subsidiary Hangzhou Beigang Logistics is jointly liable for RMB 3.515 billion under a sponsor-related equity repurchase guarantee. Aggregate leverage rose to 94.2%, breaching the 40% covenant under the offshore loan facility, while total bank borrowings of S$476.8 million are now repayable on demand. The trust also booked a S$77.44 million impairment on overdue receivables from the sponsor group.
To improve liquidity, the manager is exploring asset divestments and the restructuring of both onshore and offshore facilities but said no reasonable offers have been received to date.
Executive director and chief executive Goh Toh Sim noted that the sequential lift in revenue versus 4QFY2025 was purely the result of a prior-period adjustment and therefore not comparable. He added that management has filed claims with the sponsor’s administrator and “will make its best endeavour” to stabilise operations amid financing challenges and soft logistics-property fundamentals in China.
Looking ahead, the manager flagged an uneven Chinese macro-recovery, ongoing property-sector weakness and subdued logistics-real-estate demand as key risks. Unit trading on SGX remains suspended.