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Invest Malaysia 2014: Eco World on track to achieve RM2b sales target

KUALA LUMPUR: Eco World Development Group Bhd is on track to achieve RM2 billion sales for financial year 2014 ending October (FY14) after achieving RM1.13 billion sales, representing 56.5% of its full-year sales target as at March 31 this year.

Eco World chief executive officer and president Datuk Chang Kim Wah told a media conference at Invest Malaysia Kuala Lumpur 2014 that the group is working towards launching two projects in Penang in the last quarter of this year and early next year.

Alongside its development in Penang, the group is also expected to launch more than 300 apartment units in Sydney, Australia by early next year, said Chang. “We think the response will be very good because it’s a well-developed and populated suburban area.”

Last month, Eco World was offered a property in Sydney measuring 1.18 acres (0.477ha) for A$28 million (RM84 million) from a private vehicle controlled by its major shareholders, Tan Sri Abdul Rashid Abdul Manaf and Datuk Eddie Leong, at the same price and terms secured by the private vehicle from the vendor.

“There are no premiums in this transaction [between Eco World and the private vehicle] at all because the vendor wanted the deal fast,” said Chang. He said that as a public-listed company, Eco World needs shareholders’ approval before acquiring this property.  

Chang said the group is eyeing geographical expansion and would preferably use the listed firm to acquire land or properties overseas, instead of the private vehicle of its major shareholders. “This is a very special case in which the deal has to be done very quickly,” he said, referring to the property in Sydney.

Commenting on the property market as a whole, Chang said, “Judging from the response of buyers, there is still a good demand for landed properties.”

Chang: Judging from the response of buyers, there is still a good demand for landed properties.

Following the announcement of a corporate exercise in late April this year, the group has launched four projects — EcoMajestic, EcoSpring, EcoSummer and EcoBusiness Park — with a combined gross development value (GDV) of RM20.8 billion.

On EcoMajestic in Semenyih, Chang said, “We are very happy to announce that we have achieved a take-up rate of 95% for the 612 units of terraced homes available for sale.

“The response was very encouraging to us. By the time we finish our corporate exercise in October, we will be in quite a stable financial situation to go forward,” said Chang, adding that the management has set a sales target of RM3 billion for FY15.

Under the proposed corporate exercise announced in April, Eco World will acquire two property development entities and the development rights of multiple projects from private vehicle Eco World Development Sdn Bhd for a total net consideration of RM1.78 billion.

The acquisition will increase the group’s landbank  to 4,433 acres from 1,326 acres with a resultant growth in GDV  to RM43.53 billion from RM13.49 billion.

The corporate exercise also includes a fundraising exercise to raise fresh working capital for the group.


This article first appeared in The Edge Financial Daily, on June 11, 2014.

 

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