EcoWorld Brand sales targets to exceed RM6 Billion in FY2018
KUALA LUMPUR: EcoWorld Group announced today that it is targeting combined sales of RM6 billion under the EcoWorld Brand for FY2018. RM3.5 billion will be contributed by its projects in Malaysia under Eco World Development Group Berhad (EcoWorld Malaysia) while Eco World International Berhad (EcoWorld International) is targeting to achieve at least RM2.5 billion sales.
This will build on the strong growth trajectory established by the EcoWorld Brand over the last 4 years. As at 31 October 2017 cumulative sales from projects in Malaysia, United Kingdom (UK) and Australia have exceeded RM21 billion with annual sales having crossed the RM6 billion mark for 3 consecutive years.
“Despite continued market challenges not just in Malaysia but in the UK and Australia we are setting our FY2018 combined sales target of at least RM6 billion with confidence. This is based on the solid track record of both EcoWorld Malaysia and EcoWorld International where our teams have managed to overcome numerous hurdles year after year to deliver not just on the sales front but also on the ground,” said Tan Sri Liew Kee Sin, Chairman of EcoWorld Malaysia and Executive Vice Chairman of EcoWorld International.
“As we begin 2018, we are in a much stronger position that we have ever been since we first came into the market. In Malaysia we now have 18 ongoing projects with 2 more in the pipeline and on the international front we will be growing exponentially from only 4 projects when we were listed in April 2017 to 18 projects once we complete the new acquisitions announced late last year,” he added.
2018 is also highly significant for the following reasons:
- EcoWorld Malaysia would have handed over close to 10,000 units of properties to its customers by end 2018 and this will increase to approximately 15,000 units by end 2019 – the presence of large and growing numbers of people living and working in EcoWorld developments opens up significant new opportunities for improved customer engagement and accelerated value creation;
- 50% of EcoWorld Malaysia’s projects would have exited the investment phase in 2018 following completion of the first handovers and by 2019 the projects which have entered the growth – matured phase would have increased to 70%. This improves both the earnings visibility and cashflow generation potential of the projects which will in turn bring down the group’s gearing position;
- EcoWorld International will recognise its maiden profits in 2018 following the scheduled handovers of 2 blocks of apartments at its London City Island project and 1 block in Embassy Gardens;
- In addition, the newly announced joint-venture (JV) with Be Living to jointly develop 12 sites in Greater London and the South East of England potentially enables EcoWorld International to expand its presence in the UK to 4 times its current size – this substantially improves its earnings visibility beyond 2021 when its current ongoing projects are expected to complete. Further, the Group will gain its own UK-based development management team along with a sizeable share of the local market which augurs well for its long-term growth as a property developer in the UK.
Plans for EcoWorld Malaysia
EcoWorld Malaysia’s sales target of RM3.5 billion will come from its existing projects alone. At present, the Group has 18 ongoing projects in the Klang Valley, Iskandar Malaysia and Penang. EcoWorld Malaysia will not be launching any sizeable new projects in 2018 – instead it will concentrate on further enhancing the value of its existing landbank with the aim of delivering sustainable long-term growth for all stakeholders.
President & CEO of EcoWorld Malaysia Dato’ Chang Khim Wah shared that the strong foundations laid from the very outset to build the EcoWorld Brand have delivered stellar results with cumulative sales of RM14 billion achieved from Malaysian projects alone from FY2014-FY2017.
“Over the last 3 years the Group successfully attracted over 2.8 million visitors to visit EcoWorld Malaysia’s project sites throughout the country – this enabled them to experience first-hand what a Signature EcoWorld Development looks and feels like. The Group also formed EcoWorld Residence Clubs (EWRC) at every project and introduced a holistic training programme known as EcoWorld Class to equip members of Team EcoWorld to better serve our customers,” Chang mentioned.
The combined effect of the Group’s efforts on the marketing, branding, product and service quality fronts have garnered the EcoWorld Brand a large, loyal and growing customer following. This provides EcoWorld Malaysia with a strong platform to roll out exciting new initiatives to further unlock the value of its landbank as the number of physical communities working and living within its developments grow.
The Group’s value-creation plans include activation of commercial precincts within projects that have or will be welcoming their first residents in 2018 to enhance the liveability of the townships. In Iskandar Malaysia, Eco Palladium @ Eco Spring and Tesco @ Eco Business Park III will be opening whilst a new Sanctuary Mall is being built at Eco Sanctuary in the Klang Valley.
2018 will also see the introduction of the EcoWorld Labs Series which offers a distinctive new take on retail designed to appeal to millennials and young families as well as the more sophisticated and well-travelled homeowner.
Offering a retro-modern retail space concept which is highly customisable to the needs of its tenants, the Labs Series will enable EcoWorld to kick-start commercial activity in nascent projects well before first handover. Tenants will be carefully curated to match the profile and lifestyle needs of customers of each township and the surrounding neighbourhood. Interesting new local and boutique brands in the retail and F&B space will be encouraged to set-up – this will set the Labs apart from traditional shopping malls and provide a clear point-of-difference for each project where they are situated. Co-working spaces will also be offered to cater to the needs of the fast-growing start-up community in Malaysia.
Three Labs are slated to be opened in 2018 – Ardence Labs in Eco Ardence, Shah Alam and Spring Labs in Eco Spring & Summer, Iskandar Malaysia will be opening in the first quarter. This will be followed by Grandeur Labs in Eco Grandeur, Puncak Alam in the second quarter.
Apart from commercial activation the Group will also be bringing in other amenities to suit the needs of its customer base. Last year the Group disclosed its intention to work with the Brainy Bunch group to establish an Islamic Montessori & International school at Eco Grandeur and Eco Tropics. Earlier this year, it announced that 3 Chinese Schools have been approved for relocation to Eco Majestic, Eco Grandeur and Eco Tropics. EcoWorld Malaysia is also working closely with the Ministry of Education to accelerate the provision of national-type primary and secondary schools to meet the demands of the fast-growing population at its various townships.
“Our aim at the end of the day is to create the most-liveable developments in Malaysia to reward our customers for their confidence and faith in the EcoWorld brand and further grow our market share. For our shareholders, we expect core earnings to grow steadily in FY2018 supported by the high level of unbilled progress billings of RM6.4 billion as at 31 October 2017 – by FY2019 we are targeting to be in a position commence declaration of dividends, once the majority of our projects have exited the investment phase,” Chang said.
Plans for EcoWorld International
EcoWorld International’s sales target of at least RM2.5 billion comprises RM2 billion from its 5 ongoing projects and 1-2 new launches from its new joint-venture with Be Living in the UK.
President & CEO of EcoWorld International Dato’ Teow Leong Seng said EcoWorld International had been enjoying steady sales in the UK with continuing interest in all 3 ongoing projects, namely London City Island, Embassy Gardens and Wardian London despite Brexit uncertainties. Meanwhile, in Australia, West Village in Parramatta is almost fully sold and sales in Yarra One, Melbourne is expected to pick-up once construction works commence.
The game-changer for EcoWorld International is the recently announced JV with Be Living. The 12 sites which are the subject of the JV are located within the London commuter belt in areas where the local population live and commute to the capital for work. All are close to or within a 10-20 minute walk to tube or rail stations offering a 30-40 minute commute to Central London and providing easy access to international airports.
“We are tremendously excited about our new JV with Be Living. Apart from significantly growing our UK market share, we will gain our own development management team and be able to offer a highly diversified product range to our customers going forward. Most of the homes planned to be launched under the new JV fall within £500 psf to £800 psf range that an average income earner in London is able to afford. This complements our existing range of products priced from £800 psf to £1,500 psf beautifully and will enable us to serve the needs of both the local market and our traditional international audience,” said Teow.
EcoWorld’s move to increase its local market presence is also timely given the slew of initiatives recently announced by the UK Government to assist domestic buyers, including various Help-to-Buy schemes and stamp duty reliefs for the purchase of homes priced up to £500,000 in London. This expected to boost the already strong local demand for properties at this price point and bodes well for the new JV given that a majority of the homes to be developed are proposed to be priced below £500,000.
Teow added that several of the sites have received planning consent which will enable the Group to move on to plan for the launch of the same.
“Whilst we are still in the midst of studying the detailed plans, we should be able to move ahead with the launch of 1-2 sites by the end of FY2018. In this regard we are targeting to achieve sales of around RM500 to RM600 million from these new projects which will add on to the RM2 billion sales target from existing projects. This will give us around RM2.5 billion or more sales for FY2018 in total,” said Teow.
Going ahead, Teow expects the Group’s prospects to be significantly improved given the large number of sites secured via its new JV with Be Living in which EcoWorld International will have a 70% stake. In addition, the Group had also announced plans to acquire and redevelop an existing strata scheme in Macquarie Park, Sydney which it targets to complete by late-2018. This will add on to its project pipeline which augurs well both for its future growth as well as the long-term viability of its business model as an international developer with a strong local presence in each of its target markets.
Statistical summary for EcoWorld Brand:
|ECOWORLD INTERNATIONAL||ECOWORLD BRAND|
|Market Capitalisation||RM4.2 billion(1)||RM2.7 billion(1)||RM6.9 billion|
|Land Bank||8,126.4 acres||14.7 acres(3)||8,141.1 acres|
|Gross Development Value||RM87.5 billion||RM28.9 billion(4)||RM116.4 billion|
|No. of Projects||20 projects||18 projects(4)||38 projects|
|Cumulative Sales as at FY2017||RM14.0 billion||RM7.7 billion||RM21.7 billion|
|Unbilled Progress Billings @ 31 October 2017||RM6.4 billion(2)||RM5.9 billion||RM10.7 billion(5)|
|Sales Target FY2018||RM3.5 billion||RM2.5 billion(6)||RM6 billion|
|(1) As at 19 January 2018
(2) Incl. 27% share of EcoWorld International unbilled progress billings
(3) Acreage of existing 5 projects
|(4) Incl. 12 projects from UK + 1 in Australia
(5) RM4.83 bil (Malaysia) + RM5.85 (International)
(6) Incl. launch of 1-2 new JV projects in UK