Deal sealed: (from left) Eco World International Bhd president and CEO Datuk Teow Leong Seng, Eco World Development Group Bhd president and CEO Datuk Chang Khim Wah, Choong, Eco World Development Group founder and director Tan Sri Abdul Rashid Abdul Manaf, Liew and GuocoLand CFO Richard Lai after a signing ceremony between Eco World Development Group and GuocoLand

PETALING JAYA: When property magnate Tan Sri Liew Kee Sin introduced the deal that saw the entry of GuocoLand Ltd as a 27% shareholder in Eco World International Bhd (EWI) to a packed audience, he reminsced his association with Raymond Choong, president and CEO of the Singapore property developer.

They were bankers in Malaysia decades ago. As Liew put it, one excelled in that profession to rise through the ranks in the banking scene and the other became an entreprenuer in the property business.

Both eventually became successful but it was through the present and their common responsibility now, which is in the property business, that both decided over a course of nine months that a partnership would serve in both their companies’ best interest.

For Liew, the chance to work together with GuocoLand was too good to pass up. GoucoLand is part of the Hong Leong Group, a Tan Sri Quek Leng Chan empire of different businesses that sprawls through much of North and South-East Asia, and other parts of the world.

Liew acknowledged that GuocoLand’s financial muscle was an important ingredient in Eco World Development Group Bhd trying to build its international property business through EWI.

“On our own, we will never grow big in London. We need the strength of Guoco to go forward. The market is exciting but property development is a financial game. You need financial power to do property development in overseas markets,” said Liew at a media conference.

“GuocoLand is not just an investor. They are a full-fledged partner.”

The tie-up with GuocoLand adds not just a layer of creditability to the projects EWI has in London after the Brexit vote in June but also when it comes to future prospects between both companies.

The Brexit vote rattled the nerves of property buyers and investors since the UK made the decision to leave the European Union.

The pound has taken a beating since but the period of uncertainty has slowly smoothened off where EWI is starting to see buyers return to London.

Sales of its projects in recent months have picked up as the weaker pound has made London properties more attractive to buyers from many parts of the world, particularly Asia. EWI feels the Brexit hiccup might be over, as sales for 2016 has been higher than 2015 and there has been an acceleration of buying interest of late.

“Thank god the impact of Brexit on London is not so bad. People are still buying and investing. The market came back strongly in September and October,” said Liew.

For Choong, the chance to work with Liew was hatched after both were looking at a joint venture that morphed into GuocoLand taking a stake in EWI. Tilting the decision to work with Liew was the many advantageous a partnership would bring to GuocoLand.

A combination of drawing in clients from around the world, and executing and delivering on projects was what GuocoLand was impressed with when it looked at the prospect of working with the Malaysian company and Liew.

Even with EWI having sold half of the value of the projects it has, GuocoLand is getting entry into the company with hardly any premium attached to the assets.

GuocoLand is a large property developer based in Singapore and the majority of its revenue is from that country. The property market there is a challenge and GuocoLand intends to diversify its income stream to other parts of the world to lessen the reliance on Singapore.

It has property businesses in Shanghai and Beijing, along with Malaysia, but has parcels of land in the United Kingdom, especially through the many sites that house over 5,000 hotel rooms the group owns. It is those parcels of land that have redevelopment potential that has piqued the interest of Liew.

“This is the beginning of a partnership, not just us investing in EWI. It is about us working together to tap a bigger market in the UK, Australia and maybe even in China,” said Choong.

“We are definitely looking at more projects to do as we gain comfort and confidence.”

While GuocoLand has the land, there is an exceptional trait Liew possesses that it wants to harness by tying up with EWI.

Liew in just over a few years managed to gain exposure to the London market. By spearheading a consortium of Malaysian companies to take over the Battersea Power Station, Liew has thumbed the nose of detractors who thought he had stepped too far in believing his own abilities.

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Battersea is work in progress and the one thing he and EWI has proven is the ability to shuttle buyers from the booming economies of Asia to London.

The sales profile of EWI projects in London, where the three sites sit along the snaking Thames river, shows a blend that will be the envy of most entrenched developers. Liew and his team have managed to sell about half of the properties it is building to buyers from different parts of Asia, predominantly Malaysia and China.

The one country where Liew has had little success of bringing in buyers from is Singapore, which makes up about 2% of buyers of EWI projects. It is a challenge he hopes will be rectified once EWI ties up with GuocoLand.

Once EWI is listed in the first quarter of next year, its balance sheet will be almost debt-free.

The weaker sterling will make future site acquisitions cheaper and with many of its projects in London scheduled for completion in stages before 2020, EWI hopes that with its partner in GuocoLand, it will be able to make EWI a bigger success than it could do on its own.

And it will not just in London and Sydney that EWI hopes to grow its future property business.