The venture would offer units priced suitably for average income earners in the respective areas
By IZZAT RATNA / Pic By ISMAIL CHE RUS
EcoWorld International Bhd has inked an agreement with Be Living Holdings Ltd, the development arm of UK- based developer — Willmott Dixon Holdings Ltd, to acquire a 70% stake to jointly develop 12 sites in greater London and the South East of England.
With an estimated total gross development value (GDV) of RM14 billion on the 12 identified sites, the acquisition by the local developer is seen as another feather in their cap in their expansion abroad.
EcoWorld International president and CEO Datuk Teow Leong Seng (picture) said this alliance will enable the company to establish an immediate foot-print in the build-to-rent market as demand for such unit rises in the UK.
“Our development presence in the UK will potentially increase fourfold with approximately 8,200 units being added to our existing portfolio once we complete the acquisition of all 12 sites,” he told re- porters at the signing ceremony in Kuala Lumpur last Friday.
He said the venture would offer units priced suitably for average income earners in the respective areas.
“This will enable us to serve the needs of both the local mar- ket and our traditional international audience, and grow the joint venture (JV) into a strong and sustainable long-term player in the UK residential development market,” he said.
The purchase consideration for EcoWorld International’s 70% stake in the stage 1 site (approximately RM356 million) is expected to be funded from the company’s initial public offering (IPO) in April this year. The company raised more than RM2.5 billion under the IPO.
Stage 2 site under the venture has yet to be finalised. But the group is planning to fully fund this using a combination of bank borrowings and other debt instruments.
The complete acquisitions of both stages are expected to be finalised by the first half of 2018.
Meanwhile, EcoWorld International has targeted sales of RM2 billion (excluding sales from the new JV) for the financial year ended Oct 31, 2018 (FY18), on the back of the new deal, coupled with other international projects comprising nine projects in the UK and three projects in Australia.
Teow said sales in the UK have been steady, rising for its three ongoing projects despite the uncertainties related to Brexit.
“Since the completion of the group’s IPO, EcoWorld International has announced three new corporate deals, which will potentially boost the group’s project pipeline from only four projects at listing to 18 projects deal in total, upon completion of all three deals.
“This would significantly improve our earnings visibility moving forward,” he added.
For FY17, EcoWorld International recorded RM2 billion in total sales. Its three projects in London contributed RM1.69 billion, while those in Australia garnered RM315 million.
At present, it has five on-going projects in the UK and Australia, with a total GDV of RM14.04 billion.
The proposed deal was first announced in early November this year.