EcoWorld to tap into UK’s mainstream market

KUCHI NG: Eco World International Bhd’s ( EcoWorld) latest partnership with UKbased Willmott Dixon ( WD) will allow the group to tap into UK’s mainstream market.

On Wednesday, EcoWorldsaid it entered into a heads of agreement ( HoA) to partner with WD to jointly develop 12 sites in Greater London and the South East of England.

In a statement , it said that apart from growing its development pipel ine substantially, the partnership would also enable EcoWorld to gain substantial local market share dur to the location of the projects and the nature and affordable price points of the developments proposed.

The proposed partnership would potentially involve the acquisition of a 70 per cent interest in WD’s residential d e ve lopment bu s i n e s s present ly held under Be Living, and the acquisition of a 70 per cent interest in WD’s development management arm.

The proposed acquisitions are also expected to be formalised in December 2017 and could expand EcoWorld’s current presence in UK by four- fold through the circa 6,700 residential units with a total gross development value (GDV) of at least 2.5 billion pound.

The resea rch arm of Maybank Investment Bank Bhd ( Maybank IB Research) in a recent report, noted that there is also a framework agreement in place for the development of a further 1,500 units, which is on top of the existing 2,500 residential units under the joint venture with Ballymore.

“We understand that most of the units under the partnership are priced between 500 to 800 pounds per square feet.

“This will allow EcoWorld to continue tapping into the strong demand in the domestic mainstream

market especially after the full completion of the London City Island project in 2019,” it commented.

It also pointed out that under the partnership, EcoWorld intends to develop mainstream residential units for Open Market Sale (OMS) and enter the Bui ld to Rent market ( BTR).

All in, Maybank IB Research pegged a ‘ hold’ rating pending further detai ls from the management ( land cost, joint venture structure, composition of OMS vs. BTR).

It also noted that the acquisition would be funded by IPO proceeds and debt.