EcoWorld Int'l: Brexit vote holds silver lining for savvy investors

by **Cals** Sat 25 Jun 2016, 20:39

EcoWorld Int'l: Brexit vote holds silver lining for savvy investors

By Chen Shaua Fui / theedgemarkets.com | June 24, 2016 : 10:22 PM MYT

KUALA LUMPUR (June 24): Eco World International Bhd (EWI), which is developing three projects in London, is optimistic that the Brexit results hold a silver lining for the group and its customers, going forward.

EWI, which is set to make its debut on the main market of Bursa Malaysia, also noted that the pound sterling has dropped, which means the cost of its development projects there will be lower.

"If this situation holds, it will also make it cheaper for EWI to acquire new sites post-listing," said EWI vice chairman Tan Sri Liew Kee Sin in a statement this evening.

He went on to say that the results of the Brexit vote — though largely unexpected — has finally removed uncertainty which has caused many investors to hold back on decision-making.

"Britain is still a hugely important economy in Europe, with highly principled, professional and competent leaders. I have every confidence that the UK government will do their utmost to take proactive measures to assuage post-Brexit concerns and move the United Kingdom forward on every front," he said.

As for EWI's projects, Liew said all three have performed well to date, with a good mix of demand from local UK-based customers and international buyers.

"A weaker sterling will in fact help our Malaysian, Singaporean, China and Hong Kong-based customers by bringing down their cost of investment," he said, adding these customers buy London properties for reasons that have nothing to do with whether UK is part of the EU.

Liew also does not expect London’s position as a prime destination for global real estate investment to change, given many of the fundamental drivers of demand, i.e. transparency of laws, security and ease of ownership, shortage of supply, London’s attractions as a global education, cultural, tourism hub, among many other factors, are still intact.

On the corporate front, Liew is optimistic for the group, going forward.

“...now that the British people have spoken, the entire British government will be focused on ensuring that Britain sends out a clear message that it remains ready and open for business. This will benefit companies seeking to invest and grow their business[es] in the United Kingdom,” he said.

EWI's initial public offering (IPO) is to raise funds for the development of its projects in the United Kingdom and Australia.

Eco World Development Group Bhd has announced its intention to subscribe for up to 30% of EWI’s enlarged paid up and issued capital, in conjunction with the proposed IPO.

EWI’s three projects in London are: London City Island (Phase 2) in East London, Embassy Gardens (Phase 2) in Nine Elms, and Wardian London, which faces the Canary Wharf.

The projects were launched in 2015, with handovers to purchasers expected to take place in 2018 for London City Island; 2019 for Embassy Gardens and 2020 for Wardian London.

"UK’s accounting rules permit profits from development projects to be recognised only upon handover to purchasers. Accordingly, the post-Brexit weakness in the sterling will not have a negative impact on EWI’s financials, post-listing," it added.