IJOK (March 28): Eco World Development Group Bhd (EcoWorld) expects its record-high unbilled sales of RM6.4 billion to provide support to its earnings over the next two years.

Group president and chief executive officer (CEO) Datuk Chang Khim Wah said the group has consistently managed to achieve about RM6 billion in sales over the last four consecutive financial years.

“The outlook for 2019 remains challenging. However, we are still optimistic with [the support from] the recent launch of the Home Ownership Programme with EcoWorld (HOPE) campaign together with the [previously introduced] EcoWorld Help2Own (EW-H2O) financing package,” Chang said at a press conference after the group’s annual general meeting (AGM) yesterday.

With these two programmes, Chang said property sales have picked up since this month, with the momentum expected to carry on in the following months.

The HOPE programme was launched in January in partnership with Maybank and Public Bank which offer EW-H20 and Stay2Own methods to help homeowners bridge the funding gap to be able to afford to purchase houses.

For the financial year 2019 (FY19) ending Oct 31, 2019 and FY20, the group has set a combined sales target of RM12 billion for EcoWorld and its 27%-associate Eco World International Bhd (EWI).

In FY18, EcoWorld and EWI managed to achieve combined sales of RM6.3 billion, with EcoWorld registering sales of RM3.1 billion and the balance from EWI.

EWI in talks with funds to further expand BtR segment in UK
Separately, EWI said it is currently in talks with various institutional funds to expand its build-to-rent (BtR) segment in the UK. It expects the talks to culminate in some deals that will be completed within the next two years.

“We are in the critical phase of negotiations,” EWI CEO Datuk Teow Leong Seng said after EWI’s AGM.

But he declined to name the funds and did not elaborate on the deals, saying only that it is now a “sensitive period”, as due diligence and negotiations are still ongoing.

The proposed deals involve institutional funds from the UK, the US and Malaysia, Teow said, adding talks have been going on for a few months.
Teow also said that US-based Invesco Real Estate has the right of first refusal in the proposed deals. EWI in December last year signed a £389 million (RM2.1 billion) heads of terms with Invesco to build 1,084 BtR units in the UK.

In addition, Teow is not discounting the possibility of buying additional land to further expand its BtR sites, saying: “BtR is the biggest business growth area in the UK today”.

“We are also talking to landowners to possibly partner [with us] to take on more BtR sites outside the 12 sites [that EWI’s BtR projects are located],” he added.

In 2017, EWI acquired a 70% stake in Be Living Holdings Ltd — the residential property development arm of Willmott Dixon, a privately owned construction and property services company — to jointly develop 12 sites in the UK, with an estimated gross development value of £2.6 billion.

The company, which has been rebranded EcoWorld London, has placed the Malaysian developer in the midstream property sector, developing BtR products.

Previously, EWI announced a target of building at least 10,000 units of BtR homes in the UK over the next five years. Under current portfolio, it has over 3,000 units of BtR homes.

Teow, meanwhile, said London, as an international city, remains the most attractive location for investment in the UK, despite all the noises about Brexit now. He believes things will normalise once the matter of the UK leaving the European Union is resolved, as investors prefer to buy properties in safe and well-known cities.

This article first appeared in The Edge Financial Daily, on March 28, 2019.

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