EWI completes stage 1 of JV deal with Be Living, adding six UK sites with £1.1b GDV

PETALING JAYA (March 19): Eco World International Bhd (EWI) has completed Stage 1 Acquisitions of its joint venture with Be Living Holdings Ltd, which adds a further six sites to its pipeline and widens its depth and breadth in the UK market.

“The completion of the Stage 1 Acquisitions marks the start of a new era for EWI in the UK. Going forward, we are well positioned to grow our UK business strongly to meet both local and international demand in the traditional Open Market Sale sub-sector as well as rising institutional demand in the Built-to-Rent sub-sector,” said EWI president and CEO Datuk Teow Leong Seng in a statement today.

The six sites — which have an estimated GDV of £1.1 billion (RM6 billion) — are Woking; Kensal Rise and Maida Hill in Brent and Westminster; Millbrook Park in Barnet, Barking Abbey Retail Park and Barking Tesco in Barking and Dagenham; and Nantly House, Lampton, in Hounslow.

EWI noted that five out of the six sites have secured planning consent, enabling the projects to be launched in the next one or two years.

The acquisition was funded with proceeds of RM2.5 billion raised from EWI’s initial public offering (IPO) in April last year.

The conclusion of the first deal with Be Living — a sister company of UK contractor and developer Willmott Dixon Holdings Ltd — paves the way for the next stage of the deal, which entails the signing of definitive agreements for Stage 2 Acquisitions to potentially add a further six sites with an estimated GDV of £1.5 billion.

The proposed sites under Stage 2 Acquisitions, to be acquired upon the fulfilment of conditions precedent in their respective sale and purchase agreements, are Kew Bridge and Osterley in Hounslow, Aberfeldy Village in Tower Hamlets, Bromley North and Bromley Sherman Road in Bromley, Tulse Hill in Lambeth, and Ealing in Ealing.

EWI aims to complete the acquisition of the Kew Bridge and Aberfeldy Village sites within its current financial year while the acquisition of the rest of the sites are proposed to be completed subject to satisfactory planning consents meeting pre-agreed minimum criteria being obtained from the respective local councils.

“This conditional and progressive method of completion will enable EWI to better manage its cashflow and mitigate its development risks,” added EWI.

EWI’s share of the Stage 2 Acquisitions which is £40.36 million will be funded by bank borrowings, other debt instruments, and/or internally generated funds, in light of its low gearing level of only 0.05 times as at Oct 31, 2017 after taking into account its IPO proceeds.

Upon the conclusion of this deal, EWI’s total number of UK projects will quintuple to 15 from three when it was listed on April 3 last year.

According to the developer, all 12 sites are located within the London commuter belt in areas where the locals live and commute to the capital for work.

The sites are also situated close to or within 10 to 20 minutes’ walk to tube or rail stations, offering 30 to 40 minutes’ commute to Central London and easy accessibility to airports.

The joint venture enables EWI to offer homes priced from £500 psf to £800 psf to cater to the needs of the local market as well as meet international demand via its existing projects in prime Central London.

Moreover, the 12 sites are expected to boost its development pipeline by about 8,200 units, extending its earning visibility to beyond 2021, it said.

The joint venture will also widen its geographical reach from Central London to Greater London and the southeast of England, and its product range to encompass the mid, upper-mid and prime residential market segments.