By Sharen Kaur - Published in NST Property on March 16, 2022
Eco World International Berhad (EcoWorld International) has received several "large offers" for its projects in the United Kingdom (UK) and Australia from institutional and retail investors.
According to the company's president and chief executive officer, Datuk Teow Leong Seng, the offers are currently being evaluated.
"Should we decide to proceed with these offers, our plans to repatriate the capital which we have invested in our completed projects could be accelerated," he said.
EcoWorld International has 18 existing and upcoming projects in the UK and Australia with a total gross development value of £4.7 billion and AU$700 million respectively.
Its major shareholders are Eco World Development Group Berhad and Singapore-listed GuocoLand Limited.
The company's entry into the UK began with the EcoWorld-Ballymore joint-venture that is currently developing three prime waterside residential projects in London.
In 2018, EcoWorld London was launched giving EcoWorld International an immediate presence in the highly resilient UK mid-mainstream market and the fast-growing build-to-rent sub-sector.
In Australia, the company has two active projects, namely West Village in Sydney's second central business district of Parramatta and Yarra One in Melbourne's charming South Yarra neighbourhood.
Teow reiterated the Board's intention to sell the remaining units in the EcoWorld Ballymore and Australian projects over the next two to three years, with the primary goal of making additional distributions to shareholders after reinvesting a portion of the capital recouped from these completed projects.
EcoWorld London had successfully obtained planning permission for its Woking site (Woking) in Surrey, with an estimated GDV of around £350 million, he said in a statement today.
Teoh said that if market conditions are favourable, the management hopes to complete the development programme and launch the project by late calendar year 2022.
He said that the opening of Woking will be the company's first foray outside of the city of London in the UK.
According to him, EcoWorld London is also working on obtaining planning permission for Oxbow Phase 4, which is scheduled to open around the same time as Woking.
Better sales from the UK and Australian projects
EcoWorld International's sales in the first four months of its fiscal year ending October 31, 2022 (FY2022) were RM685 million, up 68 per cent from sales in the same period in FY2021.
Teow said that the appealing incentive packages offered to customers resulted in a resurgence in purchasing interest, particularly for its London City Island and Embassy Gardens projects in the UK.
He said the local demand in Australia has also been recovering steadily which contributed to the sales secured in the first four months of FY2022.
"Whilst the near-term market outlook continues to be challenging, with concerns regarding the potential escalation of the current conflict in Europe between Russia and Ukraine compounding supply chain constraints and fears of rising inflation rates, EcoWorld International has certain inherent advantages," he said.
Teow said that the company's projects in Australia are complete, and its major developments in London under the EcoWorld Ballymore joint venture are nearing completion.
"The impact of an inflationary environment could therefore favour us as our selling prices stand to benefit from rising property prices while our costs on the completed and near-completed projects are largely shielded from inflationary pressure.
"We do however acknowledge the uncertain market environment caused by rising geopolitical tensions. Against such a backdrop the strategic decision we made at the end of 2021 to accelerate cash recoupment via the sale of our completed units, remains very sound," he said.
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