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EC World REIT agrees to buy logistics asset in Wuhan, China

A unit of EC World REIT signed an agreement to pay 145 million yuan to acquire a 100% equity interest in Wuqiao Zhonggong Merlot (Hubei) Logistics Co. Ltd. from Hubei Anhai Steel-work Co. Ltd., a deal that will mark the real estate investment trust's first acquisition since its IPO in July 2016.

The target company is the sole owner of an industrial asset in Wuhan, China, a land use right that expires June 29, 2065. The property comprises a 68,219-square-meter land plot in the Caidian District that has a total built-up gross floor area of 49,861 square meters, as well as five buildings ranging from two to six floors, with a net lettable area of 48,695 square meters.

The buildings are let to logistics and e-commerce providers Dangdang Information Technology and Jingdong Jinde, among other tenants. The purchase price represents a 15.2% discount to the asset's 171 million-yuan value as appraised by Beijing Colliers International Real Estate Valuation, EC World said in a release.

The REIT will fund the acquisition using cash security deposits received from the master leases it has signed for its Chongxian Port Investment, the Stage 1 Properties of Bei Gang Logistics and the Fu Heng Warehouse assets in China.

As of Feb. 28, US$1 was equivalent to 6.33 yuan.