ANTICIPATING a robust prospect for the affordable housing segment amid the much subdued property sector, EcoFirst Consolidated Bhd has re-strategised its business model to have majority of its offerings to be priced below RM500,000 per unit in its upcoming launches.

The Main Market-listed property developer expects its shift of focus towards affordable property by targeting the mass-market segment to drive growth for the group going into FY2022.

EcoFirst’s two upcoming launches are the Sungai Besi development located in the Chan Sow Lin vicinity at the fringe of KL city centre and the Damansara Damai development within walking distance from the Damansara Damai Mass Rapid Transit (MRT) station.

“Both developments are situated in prime land with strategic locations, thus able to offer convenience to its occupants,” envisages EcoFirst’s Group CEO Datuk Tiong Kwing Hee. “Our shift to the affordable housing segment is in line with the Housing Bureau Statistics that reveal a shortage of one million units of affordable residential units.”

Recall that EcoFirst has entered into a conditional sale and purchase agreement with Radiant Nature Sdn Bhd in January to acquire seven parcels of commercial land lots in Sungai Buloh measuring circa 16,824 sq metres (4.16 acres) for a purchase consideration of RM70 mil.

The said land is situated within 400-metre radius from the Damansara Damai MRT Sungai Buloh-Serdang-Putrajaya (SSP) line (MRT 2) station, hence is designated as a transit oriented development (TOD) which allows for higher plot ratio.

The group is currently in the midst of submitting the development plans to the local authorities for approval.

Moreover, the group has also on April 6 entered into another conditional share sale agreement with Yeoh Siok Choo and Tan You Tiong for the proposed acquisition of 51% stake in BCM Holdings Sdn Bhd.

BCM is the registered and beneficial owner of two contiguous parcels of freehold land located in Sungai Besi, measuring approximately 4.18 acres.

The land has an approved plot ratio of 1:9.3 with the proposed development of 1,708 units of serviced apartments within two blocks of 48 storeys. Upon completion of the proposed acquisition, BCM will be a 51%-owned subsidiary of the Ecofirst.

“Our focus on developing high-value land in strategic areas with attractive pricing and development features tailored to the requirements of the mass-market segment will help to drive earnings recovery in the upcoming financial year,” explained Tiong.

Meanwhile, South City Plaza which falls under Ecofirst’s property investment segment is expected to continue to contribute to a sustainable rental income in FY2022. Growth, however will be stagnant amid the impact of the COVID-19 pandemic and the implementation of MCO.

Ecofirst’s net profit surged by more than seven-fold to RM15.94 mil for its 4Q FY5/2021 from RM2.16 mil in the previous year’s corresponding quarter, mainly attributed to fair value gain of RM13.7 mil on the investment property.

Excluding the fair value gain, the group’s earnings in 4Q FY5/2021 would amount to RM2.2 mil.

However, EcoFirst’s revenue during the period dwindled 42.4% to RM14.04 mil (4Q FY5/2020: RM24.35 mil) mainly due to postponement of new launches as well as lower revenue from the property development segment which continued to be negatively affected by the COVID-19 pandemic.

For the full-year of its financial year ended May 31, 2021, the group’s net profit was lower by 19.3% year-on-year (yoy) to RM13.82 mil from RM17.1 mil in FY5/2020 while revenue was down by 71.6% yoy to RM42.57 mil from RM150.04 mil in FY5/2020.

The lower earnings in FY2021 are attributed to slower economic activities during the pandemic.

At the close of yesterday’s (July 29) trading, EcoFirst was unchanged at 38.5 sen with 2.25 million shares traded, thus valuing the company at RM331 mil. – July 30, 2021