This article first appeared in City & Country, The Edge Malaysia Weekly on November 14, 2022 - November 20, 2022

No. 8 | Eco World Development Group Bhd

Driving into Eco Sanctuary, like any other Eco World Development Group Bhd (EcoWorld Malaysia) township, is always pleasant with the wide roads accentuated by immaculate landscaping surrounding completed properties and those being built. There are 18 such townships in EcoWorld Malaysia’s portfolio across the north, central and southern regions, which have contributed to a fruitful FY2021, ended Oct 31, for the company. It racked up RM3.522 billion in total sales value from 4,984 properties, near the historic high of RM3.7 billion achieved in FY2017.

“Our sales were 23% higher than the 2021 target of RM2.875 billion, and 53% higher than in FY2020. So, FY2021 was quite a fantastic year for us despite all the headwinds and challenges that everybody faced,” says EcoWorld Malaysia president and CEO Datuk Chang Khim Wah at the EcoWorld Gallery @ Eco Sanctuary, Selangor.

“More significantly, we did well in all the three regions we are in (Penang, Klang Valley and Iskandar Malaysia) and also every segment that we were in (residential, commercial and industrial). So, in that sense, we would say that despite everything, it was really quite a fantastic year for us,” he says.

Since its inception in 2013, EcoWorld Malaysia has taken its spot among the top-ranked developers at The Edge Malaysia Property Excellence Awards starting from 2016.

The company’s balance sheet has also strengthened. “Our cash and bank balances went up significantly, by 72%, net borrowings were reduced by 27%, net gearing was reduced to 0.44 times, and net asset per share grew to RM1.62 as at Oct 31, 2021,” notes Chang.

As the company’s theme for the year was “reset and reinvent”, it has reexamined its overall business processes. “So many things have changed. I think it is a good step forward,” he says.

Chang shares his strategies and plans to enhance growth for the company.

Datuk Chang Khim Wah: Over the last two years, we have been working hard to expand our product mix and customer base with a focus on attracting new homebuyers and young families that form the bedrock for the long-term growth of our townships. Around 60% to 70% of our buyers are below the age of 40.

While this will continue to be an important market for us, we have always had a strong following of purchasers looking for upgrader and luxury homes. Our launches over the last few months have been geared towards serving the needs of this more aspirational market and we are delighted with the response received to date.

For the upgrader market comprising properties priced above RM700,000 per unit, we have launched in the Klang Valley Eco Ardence’s Ember series of Co-Home and cluster semidees in 2Q2022; Eco Majestic’s Stoneridge semidee, cluster and bungalow homes, and Cheerywood terraces in 1Q2022; and Eco Grandeur’s Garden Homes (Regent Garden) at the end of FY2021.

In Iskandar Malaysia, we’ve launched in 2Q2022 Eco Spring’s Teno 3 and Remy 3 terraced houses, and Eco Botanic 2’s Charmborough series of larger terraces. In Penang, we’ve launched Eco Horizon’s Beldon semidee and bungalow units in 1Q2022.

For the young families and new homeowner market consisting of properties priced below RM700,000 per unit, we’ve launched Co-Home at Eco Grandeur in the Klang Valley at end-FY2021 and the second phase of Co-Home at Eco Horizon in Penang in 3Q2022. We’ve also launched Aranya and Caia terraced houses at Eco Tropics in Iskandar Malaysia in 3Q2022.

We are also planning to launch our new duduk series in Eco Ardence, and possibly one or two more projects as well. The duduk series is quite interesting as the units are around 900 to 1,000 sq ft priced from RM400,000 to RM500,000. These are very attractive for first-time homebuyers.

We will launch more industrial properties as this segment has been doing quite well. We chalked up to RM730 million in sales [for the collective 10 months year to date as at Aug 31] from our four business parks — Eco Business Park I, II and III in Iskandar Malaysia, and Eco Business Park V in the Klang Valley.

We foresee that the industrial property sector will continue to grow. We notice a lot of local manufacturers are expanding or looking for new factories. Foreign companies are coming in as well.

We are a bit lucky here because we have 18 active products, some more mature than others, and people have already moved into the first few phases. Their commercial activities are very buoyant, and they have amenities in place or are close by.

We also have a substantial land bank of approxi-mately 3,700 acres across these projects. So, for the next medium to longer term, we will look at the existing land bank to see how we can enhance it further, as it is all well-located with complete infrastructure and good catchment. This gives us opportunities to create future value for everybody.

We hope the future products will bring us even higher margins. With that, we can continue to be innovative and create products that are in line with the expectations of the younger generation and create value for them — as we see a lot of young families moving into our projects — as well as improve our dividend payout to shareholders.

If new land comes along, we will look at it, but we won’t be in a hurry.

I think the pandemic has changed some perceptions. In terms of housing, people appreciate space a bit more now. And with more work-life integration, there is a need to have spaces compartmentalised correctly, because it’s not only parents working from home these days, but it could also be home schooling for the children — everybody needs his or her own space. There is a need to be more innovative with floor plans for efficient spaces.

Post-pandemic, people appreciate secure, well-landscaped areas where they can have a healthy lifestyle. Smart homes are something we are trending towards.

In the commercial segment, we see a big demand for shopoffices. In the industrial space, we see a lot more emphasis on multi-use industrial spaces besides manufacturing, such as warehousing and showrooms. We see them merging a lot of these together.

We are always positive. Despite all the headwinds, whether in the equity market or strength of the ringgit, property has remained quite stable throughout in Malaysia, and for us at least. People still feel safe to invest in or buy properties.

Our outlook on the property market is still quite positive, despite the rise in interest rates, which are not as crazy as yesteryears and are still quite viable. Unemployment in Malaysia is relatively low and improving. We are optimistic for 2023.

Some of our strategies would be to continue being innovative and offer updated products based on what we think the market is seeking, focus on enhancing our existing projects, and find ways to make living better. We will still launch well without being overly aggressive.

With rising inflation and material cost amid the spectre of a global recession, how will EcoWorld Malaysia mitigate the risks and continue to be able to competitively build, price and sell products?

On the business front, again, I think we are quite lucky in terms of timing as we have completed most of our primary infrastructure works in most, if not all, of our projects. The big-ticket works are done.

So, it’s a matter of the construction costs of each parcel that we launch. For this, we take proactive measures to control costs, such as going through many rounds of value engineering, making sure we don’t make mistakes and tender the project out early to give our contractors sufficient time to procure construction materials and for them to do it well.

We also source certain materials that are constantly used. Due to the economies of scale that we have, we can get them at good prices and resupply them to our contractors. We will face higher prices no doubt, but we believe if everything is planned well, costs can be mitigated and controlled.

More importantly, we have put in a lot of effort to digitalise the whole company. In doing so, we hope to reduce inefficiencies and mistakes, and to have faster communication and better turnaround. We will continue to work well with our bankers, consultants and contractors.

There is environmental, social and governance (ESG) and there is business sustainability. Both are important.

We must be able to sell to be sustainable. The way we are going about our business is to attract a multi-generational and multi-ethnic market to create a sustainable ecosystem.

In terms of ESG, we have been embedding it into our operating procedures from the way we look at planning, designing homes, the overall master plan, infrastructure and landscaping. We have put in a lot of effort to implement all these within our system, rather than doing an ad hoc ESG programme. Having the whole company embrace it makes it more effective in the long run.

We are quite happy to have been recognised for our sustainability efforts. In FY2021, we were included in the FTSE4Good Bursa Malaysia Index, we have been awarded the EdgeProp Malaysia’s Responsible Developer: Building Sustainable Development Award 2021, and we have won the SDG Ambition Benchmark 2: Net-Positive Water Impacts in Water-Stressed Basins Award at the United Nations Global Compact Network Malaysia & Brunei’s Sustainability Performance Awards 2021.

This year, we continued to broaden and deepen our efforts towards transitioning to a low-carbon future. In line with the nation’s ambition to achieve net-zero emissions by 2050, we continued to work with experts in academia by expanding the pilot carbon capture and sequestration study undertaken in 2021 at Eco Ardence to cover Eco Grandeur, our largest township project. The information can be used at our other developments to attain higher carbon capture potential from our urban landscaping efforts.

At Eco Grandeur, we have also extended the scope of scientific study that commenced in 2017 on biodiversity master-planning to create a network of terrestrial and aquatic biodiversity education ribbons (BER) at various localities within the township. Apart from contributing towards the preservation and enrichment of native biodiversity, the BER can serve as “open classrooms” to create awareness and educate residents and visitors on the importance of biodiversity conservation.

All these are part of our efforts to achieve tangible results that support SDG4 (Quality Education) and SDG15 (Life on Land) and a new SDG we are adopting this year, namely SDG14 (Life Below Water).

EcoWorld Malaysia’s DNA is Design, Nature and Art to harmonise the built and natural environment for the benefit of our residents and the broader community. People have this concept of a developer as a destroyer. But as a responsible developer, if we follow certain principles, we can contribute towards sustainability and improve the quality of life in our own small way.

We also do a lot of activities with our residents. For example, in conjunction with World Environment Day on June 5, we rolled out our maiden EcoWorld World Environment Month. Throughout the month in all three regions where EcoWorld has a presence, we engaged with residents and stakeholders to put a spotlight on the triple planetary emergency of climate change, loss of biodiversity, and the need to reduce pollution and waste. More than 10 events were held with over 1,140kg of recyclables collected.

These are among the small things that we do to raise awareness for everybody, including ourselves and our team, which we feel will contribute in some shape or form to the global fight for better climate.

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