Ekovest to launch multi-billion ringgit projects

KUALA LUMPUR: Ekovest Bhd, the construction outfit of Tan Sri Lim Kang Hoo, is transforming itself from being a land reclamation contractor into a more serious property play.

The game changer for the company will be its upcoming mixed development, EkoCheras, with a total gross development value (GDV) of RM1.6 billion. It is situated opposite Cheras Leisure Mall and next to the upcoming mass rapid transit station in Jalan Cheras.

The development will consists of 63 four-to-six storey shop offices, one 15-storey office and a showroom tower, and four towers comprising 1,800 serviced apartment units that are priced from RM640 per sq ft.

“The serviced apartments were selling like hot cakes. Three of the [apartment] towers were almost fully taken up at our soft launch earlier this month. We have yet to decide when to launch the commercial properties,” managing director Lim Keng Cheng told The Edge Financial Daily.

Ekovest is planning to launch the Gateway@ KL Bund in the Gombak area, which reportedly carries a GDV of more than RM3 billion, by the fourth quarter next year.

Apart from its projects in the Klang Valley, Ekovest would be a likely candidate to benefit from projects under Iskandar Waterfront Holdings Sdn Bhd (IWH), which controls a large landbank in Johor Baru, said market observers.

Kang Hoo is a shareholder of IWH, in which he controls a 70% stake via Credence Resources Sdn Bhd, and Ekovest, of which he is the single largest shareholder with a 28% stake.

Keng Cheng, the nephew of Hang Hoo, holds 7.61% of Ekovest and a small stake in Credence Resources.

Ekovest has assets in Johor and this includes its undeveloped landbank in Danga Bay measuring 25 acres (10ha). It has already earmarked a mixed development project with a GDV of at least RM2 billion.

Given the buzz of activity in Johor Baru and the rising trend of its land value, it would not be a surprise if the 25 acre tract fetches a higher GDV.

With its track record in reclamation works, Ekovest could bid for works relating to the waterfront transformation projects not only in Danga Bay, but also in other areas in Johor where IWH has been given the mandate for development, said market observers.

Ekovest’s milestones include the clearing of Felda land and Lahad Datu estate, whose area is the size of Singapore.

Ekovest has assets in Johor and this includes its undeveloped landbank in Danga Bay measuring 25 acres (10ha).

In Danga Bay, some 2,000 acres are to be developed into an integrated waterfront city. In total, IWH has been given the mandate to develop the prime waterfront land in Johor Baru as well as Desaru, which spans over 4,000 acres.

The current market price of IWH’s land is estimated at RM5 billion, but this is still debatable, as most of the parcels are underwater.

For the 2013 financial year ended June 30 (FY13), Ekovest’s net profit fell 31% to RM50.07 million on revenue of RM140.97 million and saw a cash outflow of RM34.72 million.

According to Ekovest, the outflow was due to its recent investments. This included the purchase of land to facilitate the Klang Valley river of life project, in which it is a project delivery partner with Malaysian Resources Corp Bhd.

Its Duke Expressway concession has started generating cash this year. The  contribution from the highway should be reflected in the group’s FY14 results with sales to trickle in from its EkoCheras project.


This article first appeared in The Edge Financial Daily, on September 23, 2013.