On a sustained growth and expansion path

This article first appeared in City & Country, The Edge Malaysia Weekly, on November 6, 2017 - November 12, 2017.

We aim to be a more complete developer and be among the top developers in Malaysia and overseas.” — Chang

Chang (third from left) with The Edge Media Group publisher and group CEO Ho Kay Tat, president of the Malaysia-China Business Council and prime minister’s special envoy to China Tan Sri Ong Ka Ting, EdgeProp.my managing director and editor-in-chief Au Foong Yee and City & Country editor Rosalynn Poh

Manicured gardens at Eco Botanic and artist’s impressions of Eco Forest and Eco Business Park V

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No. 5 – Eco World Development Group Bhd

The Bukit Bintang City Centre (BBCC) sales gallery in Jalan Hang Tuah, Kuala Lumpur, is the epitome of swanky splendour as Eco World Development Group Bhd president and CEO Datuk Chang Khim Wah enters and exchanges cordial hellos.

The BBCC integrated commercial project is just one of 20 developments in Eco World Development Group’s (EcoWorld) portfolio spread across the Klang Valley, Iskandar Malaysia and Penang. They comprise diverse products ranging from affordable, upgrader and luxury homes to integrated high-rise developments and green business parks. Through Eco World International Bhd (EWI), the brand also has a presence in the UK and Australia.

The company has made it to the top developers’ rankings at The Edge Malaysia Property Excellence Awards for the second consecutive year. “We are honoured and humbled to be recognised again. We did not expect it last year and it is definitely great to be back again this year. We hope to continue working harder and be there every year,” says Chang.

EcoWorld has certainly come a long way in just a few years. It has secured about 8,052.7 acres of land bank with a total gross development value (GDV) of RM87.5 billion.

It has completed and handed over 4,700 homes in ongoing projects such as Eco Botanic, Eco Spring, Eco Summer and Eco Business Park 1 in Iskandar Malaysia and Eco Majestic, as well as the commercial component of Eco Sky in the Klang Valley.

For the rest of this year, the developer will be focusing on three new launches — Eco Forest and Eco Business Park V in the Klang Valley and Eco Horizon in Penang — and launching the second phase of Eco Ardence in the Klang Valley. The developer is also looking to hand over the first two blocks of serviced apartments at Eco Sky in Jalan Ipoh.

“It has been a very busy but fruitful year for us, and we are quite happy with it,” says Chang.

The team at EcoWorld is undoubtedly an important contributing factor in the company’s growth and success. “The team is tremendous,” commends Chang. “We have a very experienced team who has been in the property industry for a long time. Also, 70% of our employees are young and learning very fast. They are very dynamic and have contributed a lot of new ideas that have led to the growth of the company.”

“The young staff is an important asset for EcoWorld as we have been attracting a lot of younger buyers. More than 50% of them are below the age of 35,” he adds.

Chang says EcoWorld will continue on a growth and expansion path. He sits down with City & Country to talk about Eco World’s strategies and direction moving forward.

City & Country: How has the company performed over the last 12 months?

Datuk Chang Khim Wah: It has been a very exciting 12 months for us. In 2016, our Eco World umbrella company — comprising EcoWorld and EWI — achieved RM6 billion sales in Malaysia, Australia and the UK. To date, the group has received RM4 billion. In terms of unbilled progress billings, we have accumulated up to 

RM6 billion, which will give us very clear earnings visibility over the next two years. Things are very stable and exciting for us now.

For EcoWorld, we achieved RM3.8 billion in sales last year. To date, we have received RM2.4 billion and we are confident of achieving our RM4 billion target this year.

In terms of branding, how do you think the public perceives EcoWorld?

Anyone who walks into an EcoWorld project will know it is an EcoWorld project because our projects are very different from the rest. There is always our EcoWorld DNA in all our projects. Our projects are our brand. At our townships, there will always be iconic features such as project markers, water features, gazebos, emblem fencing, guardhouses and thematic architectural design. It may look different from township to township architecturally, but every township carries the company DNA. Even our business parks are gated and guarded, very well arranged and come with modern infrastructure. They are one-of-a-kind developments.

But we are not just a developer. Our brand goes beyond that … very much into community and nation building. For example, we are very active with our AnakAnakMalaysia campaign in conjunction with National Day, and we have done events such as cycling and walks to promote unity and harmony. We have done marketing events like flower shows and light shows that gathered a few hundred thousand people at our projects.

In terms of brand and business, is it currently at the level you envisioned?

Well, we cannot complain. In just four years, we have sold 12,000 properties. The support was really amazing. In terms of sales, as a group, I think the group sold almost 

RM19 billion worth of properties in four years, locally and internationally.

EcoWorld in Malaysia has been very, very strong. In our first year, we achieved RM3 billion in sales, the second year, RM3.2 billion, and last year, RM3.8 billion. We’ve done RM12 billion to RM13 billion in sales in Malaysia alone. We’re so humbled by the public’s acceptance of our brand and the speed at which we have built it. Of course, things can always be better and we always want to improve. But we are glad that the public has supported us and we are quite happy to be where we are at this point in time.

How are you managing the company’s quick growth?

In four years, we have bought over 8,000 acres of land with an accumulated GDV of RM87.5 billion. These tracts were not acquired at random. In fact, we are concentrated in three areas in the country, namely Penang, the Klang Valley and Iskandar Malaysia. These are where all the main infrastructures have been built … areas of employment, financial centres and investment. These are also areas with the biggest populations.

And within each region, our developments are spread out in a matrix whereby each project is surrounded by the local population and has accessibility to highways and public amenities such as hospitals and universities. We have chosen these areas very carefully and we offer different products in each of these areas, at different price points.

For example, in the north of the Klang Valley [Eco Grandeur in Puncak Alam], we started selling landed homes at RM500,000, and in the centre of the Klang Valley [Eco Ardence in Setia Alam], which is more developed, we started selling homes from RM1.5 million. At Eco Majestic (in Kajang), houses are priced from RM600,000. Additionally, we have business parks in Iskandar Malaysia and the Klang Valley, where a lot of industrialisation is going on, and integrated commercial projects like BBCC in the city centre.

We spread the risks and manage them, which is why every project has been successful. Our projects are based on the needs of that location, and we always sell aspirational products, which is why they are priced at a slight premium because we are willing to put in the infrastructure and make the developments stand out in their surroundings. Also, due to affluence, the younger buyers expect a very different lifestyle compared with, say, those of three to 10 years ago. With our EcoWorld DNA, we give value to our buyers, so they are purchasing something that is really unique and that is for tomorrow and beyond.

What are the challenges faced by EcoWorld? How do you overcome them?

I think we face the same problems as any other developer, such as public sentiment, end-financing issues and, in some aspects, higher costs. But we believe that there is a very good future here and the outlook for the property market is still very bright.

Firstly, Malaysians are still very young with an average age of around 31. From statistics, we observe that there are around 2.8 employees per household, or almost three working persons in one house. So we believe that Malaysians will always need homes, and if we keep offering the right type of property in the right location … with the right accessibility and supported by amenities … there is still a very good market out there. And this is proven by the sales that we have done over the past four years.

We also look at how we can go forward and further. We have bought enough land for now but there are still a lot of gaps in the market in terms of attractive areas for expansion. We are prudent in managing our balance sheet and, at the same time, we are able to grow aggressively. And under our “partnership for growth” model, we will continuously look for good partners to work with and expand together.

What is your outlook for the property market?

It is hard to say by looking at the property market in general because if you look at the figures, there is oversupply in certain areas and certain types of products. But if you avoid those and look into areas with good overspill of population and good infrastructure, we believe there is still a very strong demand in the market due to the young Malaysian population. Our sales are as strong as ever, so we believe there is still a good market.

What are your thoughts on Iskandar Malaysia?

Iskandar Malaysia is a unique place. The government has put in a lot of money to build the infrastructure and there are a lot of international developments going on. There are many ports and many hotels springing up, there is growth in the service and logistics industries, there are theme parks in operation and there is a strong tourism sector.

We believe it is a place to be because of the ongoing developments and improvements that are being proposed all the time, such as the High-Speed Rail. When there are plans for the future, there is potential. We believe there are many growth areas in Iskandar Malaysia.

There is a lot of hope in Iskandar Malaysia and it is definitely sustainable for us to continue developing in that region. So far, we have not been affected by any slowdown … and many of our house buyers are Malaysians. Our business model for Iskandar Malaysia is similar to the Klang Valley’s, that is, we concentrate on areas near highways, with local population and areas of employment. And as manufacturing is still growing in Johor, it is one of the most attractive places to set up factories.

On average, we do RM1 billion sales a year in Iskandar Malaysia. We concentrate on townships and business parks predominantly in the centre of the region. Things have been good so far.

What are your strategies moving forward?

In terms of expansion, we are still looking for land in Penang, the Klang Valley and Iskandar Malaysia, as well as continuing our “partnership for growth” programme. We are not in a hurry to buy land and we are looking for the gaps in the market that we can tap. We are very selective and careful.

Meanwhile, we continue to reinforce our presence in areas that we are in and continue to build EcoWorld communities within our projects. At projects that have been handed over to buyers, we will continue to organise activities and encourage them to build a community to look after the township. Similarly, we help tenants move in and operate fast at our business parks and commercial properties.

We are also focusing on setting up our own management teams to take care of our projects after they are handed over as we believe in the maintenance of the townships. All these have to do with a sense of pride, for ourselves and our buyers. When we continue doing that, we believe the value of all our properties will be enhanced over time.

What is your long-term plan?

In business, everyone wants to be the best or at the top. We aim to be a more complete developer and be among the top developers in Malaysia and overseas. For instance, we are embarking on ways — either forming partnerships or outsourcing — to support our townships in terms of amenities such as education and medical.

We aim to have a team that provides excellent product quality and service through programmes. We are in a good place but there is always room for improvement and we want to continuously improve.