Eco World International Bhd's 70 per cent-owned UK joint venture, EcoWorld London, has secured a deal with North American Pension Fund for a development with a value of nearly £400 million.
EcoWorld London has agreed terms with Invesco Real Estate and its investors to forward fund the development of more than 1,000 new Build to Rent (BtR) homes on two sites in Kew and Barking.
EcoWorld London will complete the construction of the developments and will then undertake the long-term management of the assets on their behalf.
Planning permissions have been secured and the development work has already commenced with construction due to complete in stages from 2020 onwards, while the detailed contractual arrangements are targeted to be concluded by the end of October 2018.
“EcoWorld International sees great potential in the UK BtR market and this deal validates our strategic move to make the fast emerging BtR business one of the key growth drivers for EcoWorld London.
“As a business we are perfectly placed to develop and manage these schemes to the high quality that investors and residents expect from us and through EcoWorld London we have the best in class BtR capabilities - this significant investment by a US-based global pension fund in two of our projects is testament to that,” said EcoWorld International executive vice chairman, Tan Sri Liew Kee Sin.
He also added that EcoWorld will seek to do more deals of this kind in the future and have already received interest from other funds, particularly from Asia.
EcoWorld London’s chief executive officer, Cheong Heng Leong, stated that the deal highlights the immense opportunities in the emerging BtR sector and represents an important new engine of growth for EcoWorld London and the UK.
“On our part, we have designed our BtR business model centred around a golden brick arrangement where land and costs incurred are paid upfront, and the remaining costs funded through a progressive payment structure.
“This is an ideal structure for us to anchor our UK growth ambitions – it enables us to effectively leverage on a relatively small amount of upfront equity to fund the entire BtR development and generates positive project cash flows earlier,” added Cheong.
Kew and Barking are great locations for renters in terms of affordability, connectivity and local amenities.
The Kew site is located next to the new Brentford Football Club’s 17,250 capacity stadium and just minutes away from Kew Gardens, a UNESCO World Heritage Site while the Barking site is located next to Barking Abbey, which housed William the Conqueror in 1066.
Both sites are well connected to Central London through train and underground networks and offer highly desirable yet affordable rental accommodation for tenants.
