KUALA LUMPUR (Feb 18): Eco World Development Group Bhd's (KL:ECOWLD) latest land disposal in Johor to Microsoft is fair, with the price tag falling within recent ranges, analysts said and flagged a boost to the developer's balance sheet.

At RM115 psf, the price is within the transacted trend of RM75 to RM143 for data centres, said Maybank Investment Bank. The price is also 52% higher than the first land sale to Microsoft at RM75 psf due to its more mature location, the house noted.

“The land sale not only accelerates the asset monetisation process” and strengthens EcoWorld’s balance sheet, but also showcases the company’s “ability to secure value-enhancing deals”, Maybank said.

On Monday, EcoWorld said it is selling an industrial land measuring 138.532 acres located within its Eco Business Park I development in Tebrau to Microsoft for RM693.96 million cash.

The sale, if it goes through, would be its second to the global software giant, following the sale of 123.141-acre industrial land within the Eco Business Park VI in Kulai for RM402.3 million in June 2024.

The latest sale could lead to a gain of at least RM150 million based on a 30% profit margin, according to Public Investment Bank’s estimates. The house is keeping its forecasts for now, noting that the sale puts EcoWorld on track to beat its own sales target of RM2.5 billion for the year ending October 2025.

The final gain will depend on, among others, actual total development costs incurred for the development of the land at the time of completion.

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