EWI: Rental rates remain resilient despite Brexit

KUALA LUMPUR (June 27): Brexit has had no effect on residential rental rates in London thus far, said Eco World International Bhd (EWI) president and CEO Datuk Teow Leong Seng. 

“Rents remained very resilient despite Brexit. They have been increasing steadily over the past 20 years. There is no dip, even after the Brexit referendum,” said Teow at a media conference here at Eco World Development Group's (EcoWorld) Bukit Bintang City Centre Sales Gallery in Kuala Lumpur. 

Announcing its 2Q2019 results with EcoWorld, EWI recorded a profit after tax (PAT) of RM10.77 million for the six months ended April 30, 2019 compared with a loss of RM36.6 million in the previous year.

Teow said EWI is on track to record higher profits in 2HFY2019 based on targeted hangover of several additional residential blocks in the next few months mainly at London City Island and Embassy Gardens in the UK.

“EcoWorld London is actively pursuing new Built-to-Rent (BtR) opportunities to tap into the growing institutional demand for purpose-built BtR developments in the UK. And we target to finalise the terms of a sizeable deal before the end of the year,” said Teow. 

“Our BtR business in the UK is growing and we expect this segment to be a significant driver of EWI’s growth in the UK. Therefore, we are in intense negotiations with institutional investors, submitting planning applications and securing funding for the proposed deal,” he added.

He also noted that the resilience of BtR properties as an asset, adding that BtRs are the perfect instrument for pension funds. 

“Despite the high-end [property] market being quieter owing to Brexit, the mid-end is doing really well,” said Teow, highlighting EcoWorld London’s Verdo launch in February 2019 which saw take-up rates of about 43%. This response led to the launch of phase 2 of Millbrook Park in May 2019. 

Moving beyond FY2019, EWI expects to deliver Wardian London, West Village and Yarra One in FY2020. 

Meanwhile, a sizeable portion of EWI’s effective stake in future revenue of properties sold amounting to RM6.6 billion as at May 31, 2019 is anticipated to be translated to EWI’s revenue and share of profits from joint ventures in FY2019 and 2020.