KUALA LUMPUR: Eco World Development Group Berhad (EcoWorld Malaysia) announced today that Melia Spring Sdn Bhd, a subsidiary of EcoWorld Malaysia, has inked a deal on 15 December 2019 for the development of homes for the M40 group on 200 acres of freehold land (“the Land”) located in Iskandar Puteri next to its Eco Botanic township in Iskandar Malaysia.
Highlights of the deal are as follows:
• Agreements signed:
– Development Agreement with Permodalan Darul Ta’zim Sdn Bhd (“PDT”) for the rights to develop the Land for a total consideration of RM20 million plus a 20% share of the profit after tax from the Proposed Development;
– Sale & Purchase Agreement with the landowner, River Retreat Sdn Bhd, to acquire the Land for a purchase consideration of RM304,920,000 to be paid on a staggered basis with interest over the development tenure of the Land.
• Location of the Land – immediately adjacent to Eco Botanic, EcoWorld Malaysia’s existing township development in Iskandar Puteri and within minutes’ drive from EduCity, LEGOLAND, Puteri Harbour and numerous medical & wellness facilities and other amenities.
• Excellent connectivity to major highways, such as the Malaysia-Singapore Second Link Expressway and the Iskandar Coastal Highway – please refer to location map attached
• Estimated Gross Development Value of the Land is RM1.67 billion.
Comments by Dato’ Chang Khim Wah, President & CEO of EcoWorld Malaysia
“We are delighted to have been given the opportunity by PDT to acquire the Land for an exciting new development right next to our Eco Botanic project in Iskandar Puteri. Based on our discussions with PDT, we understand that one of their main aims for the proposed development is to meet the homeownership aspirations of the M40 group. This is something which EcoWorld is more than happy to support. We would therefore like to thank PDT for coming up with a collaborative structure for the development and acquisition of the Land which helps to facilitate the attainment of this objective.”
“This acquisition truly comes at an opportune time as it has been more than 6 years since we acquired any land in Iskandar Malaysia. During this time, we have launched 4 townships, Eco Botanic, Eco Spring, Eco Summer and Eco Tropics as well as 3 business parks, Eco Business Parks I, II and III. All our projects have performed tremendously well as evidenced by the RM6.3 billion cumulative sales we recorded from FY2014 – FY2019 from our Iskandar Malaysia projects alone.”
The Land’s strategic location immediately adjacent to Eco Botanic makes it a particularly compelling acquisition for the Group.
Eco Botanic is the first development launched under the EcoWorld brand, conceptualised as a gated and guarded luxury development to cater mainly to the upgrader market. Total sales achieved, in the relatively short period since its launch 6 years earlier, is RM1.85 billion – this is an achievement which is not matched by many other projects in Iskandar Malaysia.
As part of the overall masterplan for Eco Botanic, the Group developed Eco Botanic City, situated within the township. A wide variety of local and international businesses from fashion & retail, food & beverage, education, edutainment, wellness and many others have commenced operations at its Eco Boulevard shops, making the precinct a veritable hive of human activity and the new commercial hub of Iskandar Puteri.
“The rapid development of Eco Botanic has left us with only 100 acres of remaining undeveloped land. As such the acquisition of the Land today makes perfect sense. The collaborative structure of the transaction plus the fact that we have already invested substantially to build our brand and market presence here, gives us great flexibility to create an optimal mix for the new development to serve the housing needs of the M40.”
“We intend to leverage on these advantages to launch products suited to first time homeowners and the M40 target group – this will complement the luxury offerings of our existing Eco Botanic township and broaden the market segment we are able to serve in this important growth corridor. It is also in line with EcoWorld’s own plans to introduce a new range of homes priced from RM300,000 – RM450,000 to take advantage of the infrastructure and lifestyle amenities we have put in place at our existing projects such as Eco Botanic. This is part of the EcoWorld for Generations campaign where we aim to be able to offer a product to suit the needs of every generation, both from a demographic and psychographic (i.e. based on shared interests, lifestyles, passions) standpoint.”
“More importantly, by undertaking this new development, we will be able to extend the life of Eco Botanic, continue to nurture its success and reap the fruits of maturity. Residents of the new development will also be able to enjoy the wonderful recreational and lifestyle amenities we have created at Eco Botanic as well as benefit from and contribute towards increasing the commercial vibrancy of Eco Botanic City. This will greatly increase the value of the properties in this locality, both residential and commercial, going forward.”
Based on the above, the prospects of the Proposed Development are excellent. It will enable the Group to ride on and contribute towards the continued development progress being made in Iskandar Malaysia and take advantage of the sizeable and growing market catchment there. Furthermore, the presence of comprehensive existing amenities and completed infrastructure at Eco Botanic reduces the incremental cost to develop the Land –greatly improving the project’s overall viability.