KUALA LUMPUR (Sept 6): Eco World Development Group Bhd (EcoWorld Malaysia) is acquiring 403.78 acres of land in Mukim Senai, Johor, to develop a business park to be known as Eco Business Park VI, for RM211.07 million cash.
EcoWorld Malaysia said the land acquisition, earmarked with development carrying an estimated gross development value of RM1.58 billion, will allow the group to solidify its growing industrial market share further and strengthen its competitive position in Iskandar Malaysia.
The group, via its wholly-owned unit Eco Business Park 6 Sdn Bhd entered into a conditional sale and purchase agreement with IOI Prima Property Sdn Bhd on Wednesday (Sept 6), to buy the land. IOI Prima Property is a 99%-owned unit of IOI Properties Bhd.
The purchase consideration is calculated at the rate of RM12 per square foot and arrived at on a willing buyer-willing seller basis after considering the prospects of the land, in view of its readily available connectivity to highways and population catchment, as well as development potential into an industrial development.
In a stock exchange filing, Ecoworld Malaysia said earnest deposits of RM4.22 million and balance deposits of RM16.89 million for the land acquisition were paid from internal funds.
Meanwhile, the remaining balance of purchase consideration of RM189.96 million and the development costs, will be funded through a combination of internal funds and bank borrowings.
As at end-April, EcoWorld Malaysia’s long-term borrowings stood at RM1.68 billion, while short-term borrowings were RM849.85 million.
The original land area is approximately 406.86 acres. A portion of the land, about 3.07 acres has been reserved by the relevant authorities ROW (road reserve) straightening.
The group plans to develop the land into a business park to be known as Eco Business Park VI catering to medium and light industrial businesses.
Over 10 years, EcoWorld recorded total sales of RM30.7 billion, of which RM4.2 billion came from the group’s business parks segment.
With the addition of the new land, the group’s total industrial landbank increased to 2,416 acres, of which 1,647 acres is situated in Iskandar Malaysia. EcoWorld Malaysia will have five sizable industrial parks, comprising four in Iskandar Malaysia and one in Selangor.
The group said it is set to benefit from the positive news flow surrounding Iskandar Malaysia given that it has numerous township projects there, namely Eco Botanic, Eco Botanic 2, Eco Spring and Eco Summer as well as Eco Tropics.
“With the acquisition of the new land, we will be able to further grow our market share and cater to a wider range of industrial customers. Accordingly, we are confident that this acquisition augurs well for the group’s future growth and earnings prospects,” said president and CEO of EcoWorld Malaysia Datuk Chang Khim Wah.
“We firmly believe that the growth momentum in Iskandar Malaysia, in particular, will continue unabated as it is backed by extensive infrastructure improvement, most notably the ongoing construction of the Johor Bahru-Singapore Rapid Transit System (RTS Link).
“With a capacity to carry 10,000 passengers per hour in each direction and a commute time of only six minutes between the Bukit Chagar Station in Malaysia and Woodlands North Station in Singapore, it will be a real game-changer when it is completed. The availability of such a high capacity, fast and efficient transportation system between the two countries will significantly boost economic and commercial activities in Iskandar Malaysia resulting in increased demand for industrial, commercial as well as residential properties,” Chang added.
Shares of EcoWorld Malaysia closed up one sen or 0.99% at RM1.02 on Wednesday, giving the group a market capitalisation of RM3 billion.