Made-to-measure offerings for success

This article first appeared in City & Country, The Edge Malaysia Weekly, on November 5, 2018 - November 11, 2018.

Our aim is to create well-maintained, sustainable townships and to ensure thriving communities for the long term.” — Chang Kenny Yap/The Edge

Housing and Local Government Deputy Minister Datuk Raja Kamarul Bahrin Shah (third from left), with (from left) The Edge Media Group chairman Datuk Tong Kooi Ong, Chang and The Edge Media Group publisher and CEO Ho Kay Tat Mohd Izwan Mohd Nazam/The Edge

Bukit Bintang City Centre (BBCC) has secured RM1.4 billion in cumulative sales so far; Pictures by Ecoworld Malaysia

One of EcoWorld Malaysia’s projects is Eco Grandeur; Pictures by Ecoworld Malaysia

Greenery is one of EcoWorld Malaysia’s trademarks in building townships Pictures by Ecoworld Malaysia

-A +A

No. 6 (joint ranking) – Eco World Development Group Bhd

Driving through the entrance to any of its townships and you would know you are entering a project by Eco World Development Group Bhd (EcoWorld Malaysia). Upon passing through a stately arched gateway, one is greeted by vast manicured lawns and lakes with rows of landed houses separated by tree-lined lanes. A sense of arrival and a lot of greenery are just two trademarks of an EcoWorld Malaysia township development.  

On a busy Tuesday morning at its Bukit Bintang City Centre (BBCC) show gallery, EcoWorld Malaysia president and CEO Datuk Chang Khim Wah settles into his seat and explains the company’s signature.

“We have worked hard to establish the EcoWorld Malaysia project DNA with features such as grand entrances, waterways, landscaping and so on. These features are consistent across all of our projects. Our aim is to create well-maintained, sustainable townships and to ensure thriving communities for the long term,” says Chang as he sips his coffee.

“It is not just about differentiating our products. We believe in providing exceptional service to our customers. We fit a lot of amenities into our developments, such as football fields, cycling parks, commercial hubs and even upgraded mamak stalls for commercial vibrancy and to enhance value,” he adds.

“We will continue to introduce new ideas ... and we are constantly bringing new blood into our operation to keep things fresh,” says Chang, who — despite juggling a seminar and several meetings on the day — does not miss a beat.

EcoWorld Malaysia’s careful approach, branding and services have earned it a place in the top rank of The Edge Malaysia Top Property Developers Awards 2018.

Set up in 2013, the public-listed company has 8,126.4 acres of land that translates into a gross development value of RM87.5 billion. Its undeveloped land bank of 4,977.2 acres has a GDV of RM71.6 billion.

The company has a portfolio of 20 projects comprising affordable, upgrader and luxury homes, integrated high-rise developments and green business parks in the Klang Valley, Penang and Iskandar Malaysia, Johor.

Its projects include Eco Sanctuary, Eco Grandeur, Eco Ardence, Eco Sky, Eco Majestic, Eco Botanic and Eco Horizon. The RM8.7 billion, 19.4-acre Bukit Bintang City Centre (BBCC) is a joint-venture (JV) mixed-use development between EcoWorld Malaysia, UDA Holdings Bhd and the Employees Provident Fund.

Chang says EcoWorld Malaysia has done extremely well. “Despite a challenging year, our sales target remains at RM3.5 billion. We have garnered RM2 billion in sales in the last 10 months (FY2018 ended Oct 31), and we are on track,” says Chang.

On the international front, the company has grown by leaps and bounds through Eco World International Bhd (EcoWorld International). Listed in April last year, EcoWorld International has extended its reach to the UK and Australia. In the UK, through its JV EcoWorld-Ballymore, it is developing three waterside residential projects in the capital — Embassy Gardens in Nine Elms, London City Island in Leamouth Peninsula and Wardian London in Canary Wharf. In Australia, the company is developing a project called West Village in Parramatta, outside Sydney, NSW and Yarra One development in South Yarra, Melbourne. “Looking ahead, we are confident about the market and how we will fare,” notes Chang. He shares with City & Country EcoWorld Malaysia’s strategies, future plans and opportunities.

 

City & Country: How has EcoWorld Malaysia performed in the last 12 months?

Datuk Chang Khim Wah: The last 12 months have been quite interesting. Some might call it challenging but we found many opportunities and our sales have been holding up well. We have been busy.

In FY2018 (10 months up until August), we have achieved about RM2 billion in sales, with RM1.3 billion coming from projects in the Klang Valley, RM531 million from Iskandar Malaysia and RM150 million from Penang. We maintain our sales target at RM3.5 billion.

Future progress billings currently stand at RM6.2 billion (RM4.54 billion from Malaysia and RM1.62 billion EcoWorld International) as at August this year. This gives us comfortable earnings visibility over the next two to three years.

As at 3Q2018, our net profit stands at RM97 million and our revenue at RM1.5 billion. It is important to note that EcoWorld International has begun to see a profit (3Q2018) from losses in previous quarters, in line with its maiden handovers at London City Island. EcoWorld International will adopt a build-to-rent concept for a few of its projects. We believe it is a strong and effective business model.

In addition, all of EcoWorld Malaysia’s JVs — Eco Horizon, Eco Grandeur and Eco Business Park V, Eco Ardence as well as BBCC — have also all begun to see profits.

Meanwhile, the EcoWorld #Help2Own campaign, which was launched in June this year, has been well received, and will continue to drive sales for the remaining two months of the financial year. We are on track to deliver a total of about 5,600 units by the end of FY2018.

 

How does EcoWorld Malaysia continue to set itself apart?

EcoWorld Malaysia’s ability to consistently meet its sales targets is attributable to the company’s strong branding, loyal customers and unique value propositions offered by each project. We aim to market highly sought-after developments to meet the lifestyle needs and aspirations of our target customers.  

Currently, we are very active on social media platforms such as Facebook and Instagram to keep us in touch with the younger generation of buyers. And so far, we have received mostly positive feedback. We also engage in more targeted marketing campaigns that are suited to each development.

Under EcoWorld X (EcoWorld Malaysia’s new business unit), we are looking at platforms to digitise our business, for example, by introducing user-friendly apps for our residents to connect to the community and surroundings.

 

What challenges has the company encountered and how does it plan to overcome them?

We believe access to housing loans remains an issue industry-wide. For this, we offer financial schemes such as our #Help2Own scheme. In addition, we are one of the participating developers in Maybank Islamic Bhd’s HouzKEY rent-to-own scheme.

Another challenge is the perception that the environment is challenging. Hence, the public has adopted a wait-and-see attitude. But, generally, we are not too concerned and we will push forward with more launches.

Apart from our usual marketing methods, we have taken our customers to our actual sites and townships so they can experience and see the value in what they are paying for. Our site tours have been successful and the conversion rate has been good.

Other challenges include the normal ups and downs for developers, such as rising costs and the labour shortage. But we believe these things will iron themselves out.

 

Which has been EcoWorld Malaysia’s best-performing product segment in the last 12 months?

We would like to say all of them (laughs) but if we had to pick one it would be landed properties in our townships. In the Klang Valley, they are priced at RM500,000 to RM2.5 million. They have been our bread-and-butter products.

Also supporting our sales are our Eco Business Parks, located in Iskandar Malaysia and the Klang Valley. Iskandar Malaysia business parks continue to see interest from Malaysian and Singaporean small and medium-sized enterprises (SMEs) as well as multinational corporations. Over half of the sales of our factories in Iskandar Malaysia are to foreigners, most of which are Singaporean SMEs.

For the upcoming financial year, we will continue to focus on landed properties in our townships across all three regions that target the local end user market, supported by our business parks and BBCC, our flagship city-centre integrated commercial development.

 

Can you give us an update on ongoing projects?

In the Klang Valley, Eco Sky was completed early this year. Eco Majestic is our most successful township in terms of sales. To date, it has recorded over RM2.5 billion in sales since its launch in the middle of 2014. Several residential and commercial precincts have been delivered and a growing number of residents are moving in. Eco Sanctuary completed its maiden handover of 711 units of terraced villas, semi-detached homes and bungalows. Eco Grandeur continues to sell well, with RM200 million sales in FY2018.

Eco Ardence is Eco World Malaysia’s most successful project in terms of sales in FY2018, with RM380 million sales (cumulative total of RM1.5 billion since its launch in September 2016). In addition, Ardence Labs, a new lifestyle hub offering food and beverage and other services, has just opened.

BBCC is well on its way to becoming a new landmark on the KL City Centre skyline. Construction is in progress and we are targeting to deliver the first phases of serviced apartments and offices and the opening of Mitsui Lalaport Mall by 4Q2020 or 1Q2021. To date, BBCC has secured RM1.4 billion in cumulative sales.

Cumulative sales at Eco Forest total RM235 million since its launch in September last year. Eco Majestic’s Eco Business Park V has recorded commendable cumulative sales of RM343 million since its launch last year.

Moving over to Penang, Eco Meadows is currently in the process of handing over its maiden landed homes (375 units) to purchasers. Eco Terraces is on track for completion in FY2019. Meanwhile, Eco Horizon has recorded excellent sales. Since its launch in September last year, we have sold over RM420 million worth of landed residential homes.

In Iskandar Malaysia, Eco Botanic has delivered Eco Nest, consisting of 490 serviced apartments — our only high-rise development in Johor, catering for students and lecturers working in EduCity, which is adjacent to the project. Eco Spring and Eco Summer recorded sales of RM182 million as at 3Q2018. Eco Tropics in Pasir Gudang recorded sales RM93 million as at 3Q2018. A new Tesco opened in Eco Tropics this year. Our business parks continue to sell well, especially to Singapore SMEs. Eco Business Park I, II, & III saw sales of over RM160 million as at 3Q2018.

 

What are the future plans for EcoWorld Malaysia?

We will continue to grow the company and hope to deliver the most livable developments in the country. To date, 18 out of 20 projects have been launched and are at various stages of the project life cycles. We will continue to add long-term value across all our developments. We are eyeing land acquisitions in the Klang Valley, Penang and Iskandar Malaysia.

Going forward, our focus will be on the Klang Valley, Iskandar Malaysia and Penang. We shall strive to achieve strong representation in key growth corridors of each region. We would also like to ensure a good product mix of landed homes, upgrader homes and the aspirational and luxury segments, along with integrated high-rise developments and business parks.

We will continue to focus on our expertise and execution to develop recognisable EcoWorld Malaysia products. We shall continue to be innovative and aggressive in terms of our branding and marketing strategies to establish the EcoWorld Malaysia brand. For FY2019, we plan to introduce Eco Sun in Penang, a mixed-use development with a GDV of RM0.99 billion. We are currently in the process of designing the project, and more details will be revealed soon.