EC WORLD REIT Renews Major Lease In Relation To Hengde Logistics And Secures New Lease In Relation to Wuhan Meiluote
October 15, 2020 – EC World Asset Management Pte. Ltd., as manager of EC World Real Estate Investment Trust is pleased to announce the renewal of a major lease amounting to 159,752 square metres in relation to Hengde Logistics, with China Tobacco Zhejiang Industrial Co., Ltd.
Mr. Goh Toh Sim, Executive Director and CEO of the Manager, said, “Working closely with our property manager in China, we have been engaging China Tobacco on the lease renewal since October 2019. However, the negotiation was delayed by the COVID-19 situation.”
“We are pleased to report that EC World REIT has successfully renewed the lease at competitive rates. With the renewal of the lease in relation to Hengde Logistics, the Manager has substantially renewed the expiring leases of EC World REIT for 2020. We will continue to work closely with the property manager in China to optimize portfolio performance.”
According to CBRE’s MarketView 2Q2020 report, due to COVID-19 and economic uncertainties, the rental rates for the logistics sector in Hangzhou showed a 0.4% decline quarter-on-quarter. China Tobacco has committed to a lease term of 38 months. The new rental rates represent a 1.1% increase over the expiring rental rates.
The warehouse management services currently provided to China Tobacco will no longer be required for the renewal lease term due to their internal restructuring. The termination of the services will reduce ECW’s total revenue by about 1.1%.
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