This article first appeared in The Edge Malaysia Weekly on December 4, 2023 - December 10, 2023

Eco World Development Group Bhd (EcoWorld) president and CEO Datuk Chang Khim Wah describes FY2023 as a good year for the company, supported by the continuing momentum from the stellar performance of FY2022.

Chang notes that the company saw one of its best performances in FY2022, as it recorded RM3.84 billion in sales — the highest achieved by the company since FY2016.

While EcoWorld townships are a company staple, Chang also spotlights the Eco Business Park (EBP) segment, the company’s rising star. In FY2022, EBP contributed RM753.3 million in sales, translating into 20% of FY2022’s total sales and a 156% jump from FY2021’s contribution. In just the first 10 months of FY2023, the industrial segment has contributed about 33% of sales.

In addition, its other segments — particularly the affordable product range for new and young homebuyers — has done well and the group is looking to expand its business park segment further.

In an interview with City & Country, Chang shares the company’s performance from FY2022 into the first 10 months of FY2023 and its upcoming key projects, as well as the importance of sustainable value by implementing EcoWorld’s DNA (Design, Nature, Art) across all its projects to ensure the continuity of its projects in the long run.

Datuk Chang Khim Wah: FY2022 was an exceptional year for us. We performed admirably and achieved RM3.84 billion in sales compared with RM3.52 billion in FY2021 — that is a 10% increase. [Previously], our highest-ever sales was RM3.82 billion in FY2016. In terms of the contributing sales, the Klang Valley contributed 53%, Iskandar Malaysia provided 34% and the remaining 13% came from Penang.

Looking at the market segment, EcoWorld is supported by four pillars — the EcoWorld townships, EBP, commercial as well as integrated developments, and high-rises.

The EcoWorld townships delivered RM2.35 billion, of which RM1.7 billion were upgrader products that are priced above RM650,000 and can go up to millions, depending on the type of landed property. RM648 million came from starter homes priced below RM650,000. The EcoWorld townships form the foundation of our sales. However, we are more than just townships.

EBP has been very strong for us. We have four business parks — three in Iskandar Malaysia, which are EBP I, EBP II and EBP III, and one in the Klang Valley named EBP V. We recorded RM753.3 million of sales, which is 156% higher than in FY2021. Our EBP trajectory has been going up since 2020. It actually [places] us as a very serious business park developer.

The other parts of our sales come from commercial properties with RM446 million recorded sales. Integrated developments and high-rises contributed 9% towards our sales for FY2022, which is about RM346 million.

Our four pillars are serving us well in all the regions that we are in. While our bread and butter has always been the EcoWorld townships, EBP has been growing tremendously and is becoming an important part of our sales. In FY2023, sales from EBP grew from RM753 million and achieved close to RM1 billion in the last 10 months. So you can see how important this segment has become to us.

In the first 10 months of 2023, we reported RM3.06 billion in sales. Interestingly, 33% of it are industrial products and the EcoWorld townships contributed 42% to total sales. Our sales target for FY2023 is RM3.5 billion. We have a bit more to go. In just 10 months, that’s already 132% more than the whole of last year.

We are very happy with this achievement because EcoWorld is not only known for its townships, but other segments as well.

EBP II, located in Senai, Johor, has been receiving many foreign investors since last year. One of the main occupiers is a company called Haitian Group from China that delves in industrial equipment manufacturing. It bought 92 acres of land in EBP II to set up its factory. EBP V, too, has received many foreign investors over the last two to three years, with can-making factories, logistics and warehousing coming into the business park.

We have grown from being known for EcoWorld townships to EBPs. Its almost on equal footing. We find a lot of people coming to us to talk about future investments, how to set up their factories, how to come into Malaysia. So we provide that kind of service towards helping potential investors set up their outfit in Malaysia — be it locals or foreigners.

We have just acquired 403.78 acres in Kulai, Johor, for our fifth business park called EBP VI. It has a gross development value (GDV) of RM1.58 billion. With our experience in the last 10 years developing business parks and how the interest for the country’s industrial sector has grown strong over the past few years, we expect great things from EBP VI as well.

Meanwhile, we also have the duduk series — a high-rise residential product that has been designed specifically with young homeowners in mind. Affordably priced from RM400,000, unit built-ups are about 950 to 1,000 sq ft with good infrastructure all around. As of 3Q2023, we have sold almost 3,000 duduk series units and they are mostly coming from Huni D’Eco Ardence and Se.Ruang D’Eco Sanctuary. We hope that, as the residents move into our duduk projects, they will grow their family and career to accumulate wealth, and then upgrade with us as well. They will form the future residents for our upgrader products.

Additionally, we just launched another duduk product called Hana D’Eco Ardence in March and it has a take-up rate of 70%. We will be looking to launch more duduk products in our townships.

We also purchased new land for a new duduk product, which will be the first time the duduk series is outside of our townships. The project is called Se.duduk D’Kajang and occupies 6.92 acres in Kajang close to Kajang Dispersal Link Expressway (SILK) and Kajang-Seremban Highway (Lekas). It has a GDV of RM500 million and we expect to launch it in 2024. Though it is outside of our township, the project still carries the same philosophy of being close to amenities, [and having] good infrastructure and an overall catchment that is already mature.

In Penang, we will be launching a new product in Eco Sun with a GDV of RM990 million by the end of 2024.

Iskandar Malaysia has been one of our strong focuses. In terms of sales, it is as good as the Klang Valley. Last year, it contributed 34% of our total sales. We are a little bit different in Johor, meaning we focus more on the EcoWorld township and EBP together due to the proximity to Singapore, the available infrastructure in Iskandar Malaysia and the population. We find that there is an equal demand for both segments in Iskandar Malaysia.

A lot of multinational companies set up their offices in Singapore but their manufacturing factories are in Iskandar Malaysia because it is cheap, near and there is abundant land. Beyond that,residential property demand is also strong. Though landed property remains the preferred choice, high-rises are also seeing demand. A lot of people say that it is hard to do high-rises in Johor but that is not true. It has a big demand in the city centre due to the RTS (rapid transit system). Within our own township, there’s demand from young Malaysians for well-priced apartments.

We do not have the opportunity to set up a business park in Penang yet as we have not found the right location and land.

The areas we are looking at for a business park would already have an existing catchment population, existing businesses and good accessibility. These are some of the factors we look for before we enquire about the land. Business parks not only need good access and good land, they also need skilled labour. You cannot have your business parks too far away from existing residential areas.

From the momentum of the last two years, we feel 2024 will still be a good year. There are certain ups and downs in Malaysia. But generally, the news has been pretty okay. From our business park point of view, there’s a lot of interest by manufacturing companies to come to Malaysia, to do things in Malaysia. Despite the numbers reported on exports, as long as there’s interest for companies to come in, do business and generate employment, then it’s good for the local population and the overall economy.

The challenges for 2024 will come from external factors. We think it’s more geopolitical and how the world manages itself in 2024. Internally, as long as we continue to innovate, work hard and provide excellent service and quality, we think the property development scene will still be very strong.

Of course, there will always be challenges. If it is not a labour problem, it is a problem with cost of materials or a political issue. However, looking at the demand of our product, we will still continue to do well. It’s just how we manage our cost and quality.

We have a good team. Our general managers, head of departments and our planners are all very experienced. We are only 10 years old. When we first started EcoWorld, we have a vision and philosophy of how we wanted to do the business and how we wanted to be different from the overall market.

We have the EcoWorld DNA, which means Design, Nature and Art.

In Design, we think about the sustainability element right from the very beginning when we first acquire the land. We think about the overall planning — making it stratified, having innovative designs, good accessibility, transport and amenities, among others — in the master plan.

When we design a township, it comes with elements such as a beautiful perimeter fencing, back lanes, linear gardens, guard house, double security , boom gates, and a place for gathering in a mini park. There are house rules implemented, which involve renovation procedures and colour scheme of the precincts that have been set up from the start. We use sustainability thinking to find ways to build a stronger community that enables us to enhance the property value over time.

We believe in designing a community that looks after their property. That’s why our products are all stratified and the community will have their own management committee that funds the maintenance of their projects. We don’t want our projects to degrade after 10 to 15 years.

N for Nature means we try to prioritise the preservation of native flora and fauna when we work on our master plan. When we purchase land, there will be a section where there is natural forest. We will try to preserve it and even transplant trees in our development . We have transplanted about 3,000 original trees within our townships.

The last part is Art. We design each project with a certain architecture idea such as modern, Victorian or botanical concepts. In Eco Majestic, where it has been designed in an early Victorian style, the architectural feel and communal space together with landmarks like gazebo or unique roundabouts are important markers to the residents. We want the [residents] to appreciate the artistic part of the project and we want them to participate in the community. They will take pride in their neighbourhood and look after it together. A company cannot do sustainability alone; it needs the whole community to participate.

We believe that with this formula, it will stand us apart from other developers. The same thinking goes into the business parks as well, on creating a community with sustainable value.

We are definitely looking for more land, especially in the Klang Valley and Iskandar Malaysia. We still have about 3,412 acres of undeveloped land. We are careful in acquiring land. Location, price and size are the key factors.

The two land parcels we acquired this year, the 6.9 acres in Kajang and the 403.78 acres in Kulai, are perfect because they are in a mature area, very accessible and suitable for the specific use that we want of the land. For example, the land in Kulai is perfect for industrial use as it is surrounded by an existing industrial area with busy trunk roads and lorries, and supplied with power and water. In Kajang, the land is surrounded by parks, landed property, good highways, good security and easy access to the city.

We have not looked outside of Penang, the Klang Valley and Iskandar Malaysia. There is still a chance for expansion and work to be done in these three areas. For now, we want to focus on reinforcing them first.

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