Eco World closer to becoming UK-based developer
Firm set to complete stage one of its JV with Be Living
PETALING JAYA: Property developer Eco World International Bhd (EWI) is inching closer to becoming a UK-based developer following the completion of the stage one acquisitions of its joint venture (JV) with Willmott Dixon Holdings Ltd’s development arm, Be Living Holdings Ltd.
The Main Market-listed EWI will now gain six new sites to its three London-based property development projects, apart from more than doubling its ongoing UK projects’ gross development value (GDV) to £2.11bil.
EWI, the international arm of Eco World Development Group Bhd, paid nearly £63.76mil (RM348.47mil) for the six sites under the first stage, using the proceeds raised from the company’s initial public offering (IPO) in April 2017.
All but one of the six new sites have secured planning consent, with new projects expected to be launched within the next one to two years.
Several projects on two of the sites – Millbrook Park, Kensal Rise and Maida Hill – have launched phases and these are antici- pated to be sold within the current financial year 2018 (FY18).
Apart from the stage one acquisitions, EWI has also inked definitive agreements for the stage two ascquisitions. The deal, upon completion, will potentially add another six sites with an estimated GDV of £1.5bil.
According to EWI, its total number of projects in the UK will increase to 15 upon completion of the acquisition of the stage two sites.
To recap, the group had only three UK-based projects when it was listed on Bursa Malaysia in April last year.
On the funding front, EWI will be paying about £40.36mil (about RM220.57mil) for the stage two acquisitions. This is expected to be funded by bank borrowings, other debt instruments and internally-generated funds, given EWI’s low gearing level of 0.05 times as at Oct 31, 2017.
EWI holds a 70% equity interest in the JV, while Be Living controls the rest of the stake.
In a statement yesterday, EWI president and chief executive officer Datuk Teow Leong Seng said the JV with Be Living, a sister company of prominent UK contractor and developer Willmott Dixon Holdings, would open up more markets.
“The completion of the stage one acquisitions marks the start of a new era for EWI in the UK.
“Going forward, we are well positioned to grow our UK business strongly to meet both local and international demand in the traditional open market sale subsector, as well as rising institutional demand in the built-torent (BTR) subsector,” he said.
Teow also added that the UK’s local demand in the mid-mainstream market currently exceeded supply and thus offered significant upside potential for the company, moving forward.
EWI’s collaboration with Be Living will allow the former to gain access to the mid-mainstream market, with the capability to supply homes at price points ranging from £500 to £800 per sq ft that an average income earner in London is able to afford.
EWI will also gain immediate entry into the BTR subsector, which has seen rapid growth due to the substantial increase in the size of the private rental sector.
Going forward, the group expects its JV with Be Living to raise the breadth, depth and resilience of its property development business in the UK.