GuocoLand eyes UK and Australia housing

It will own a 27% stake in Malaysia's Eco World International when it IPO's.

GuocoLand Limited will subscribe for a 27% strategic stake in Eco World International Berhad when the latter launches its Initial Public Offering on Bursa Malaysia Securities Berhad. The proposed listing and IPO of EWI is targeting to raise more than S$670 million to fund the development of four projects in London, the United Kingdom and Sydney, Australia.

GuocoLand Group CEO Raymond Choong said the group has been actively looking at expanding into new markets to further grow its real estate development business. The United Kingdom and Australia have been identified as two good markets with high potential for growth, with their large markets offering reasonable returns and high levels of governance and clear and strong rule of law.

“With a substantial exposure to Asia, GuocoLand has been on the lookout for investment opportunities in other markets. The UK and Australia property markets offer scalability, and we believe that with the right products and locations, they offer reasonable returns. Both London and Sydney are dynamic and vibrant global gateway cities,” Choong noted.

He added, "GuocoLand is pleased to enter into the UK and Australia through its investment in EWI. The investment in EWI gives GuocoLand immediate exposure to four development projects underconstruction in the global gateway cities of London and Sydney with an estimated total gross development value of approximately $4.1 billion."

The said projects are predominantly residential developments. The three London projects are in different strategic locations and offer different price points to cater to the different target customer segments. The four projects have been well-received by the market and project risks have been substantially lowered.

As at 3 October 2016, the cumulative sales (including reserved units) from the four projects are approximately $1.7 billion.

With its stake in EWI, the group will be one of the two largest shareholders in EWI, holding an equal stake as EW Berhad. Eco World Development Group Berhad is a leading property developer listed on BursaSecurities. GuocoLand will also be entitled to nominate up to three directors to the board of EWI. 

“We are delighted to partner a reputable developer Eco World Development Group in EWI’s upcoming IPO. EWI has 4 strong projects that have been well-received by the market and I am
confident in the future growth prospects of EWI,” Choong added.

The investment will be funded by internally generated funds and is within GuocoLand’s financial capability.