EcoWorld acquires 2,198 acres of land in North Western Klang Valley corridor
SHAH ALAM: Eco World Development Group Berhad (EcoWorld) today announced the entry into five sale and purchase agreements to acquire approximately 2,198.4 acres of leasehold land in the Mukim of Ijok, District of Kuala Selangor for a total cash consideration of RM1.181 billion.
The Lands are located at the North West of Klang Valley and are approximately 45 kilometres from Kuala Lumpur city centre, 40 kilometres from Petaling Jaya city centre and 18 kilometres from Sungai Buloh town centre.
Chairman of EcoWorld Tan Sri Liew Kee Sin said the Group was extremely excited about the proposed acquisitions. “The opportunity to acquire more than 2,000 acres of land in the Klang Valley is indeed rare. This strategic acquisition will enable EcoWorld to establish a dominant presence in the up and coming North Western Klang Valley growth corridor with access to a new market catchment to complement our strong brand positioning in the Central, South-Western and South-Eastern corridors,” he added.
Currently, EcoWorld has three strong developments in the Klang Valley which are Eco Sky in Taman Wahyu, Jalan Ipoh; Eco Majestic in Semenyih; and Eco Sanctuary in Shah Alam.
EcoWorld has identified three projects to be developed on the Lands:
(i) A mixed eco township development of approximately 1,400 acres to be known as ‘Eco Gardens’ consisting of mainly landed residential homes, commercial as well as institutional development;
(ii) An integrated gated industrial hub of approximately 518 acres to be known as ‘Eco Business Park V’ offering business owners and investors one-stop industrial solutions that come with modern facilities and services including high-speed broadband and space customisation solutions which are designed to maximise efficiency with minimum resource wastage; and
(iii) Affordable homes on approximately 280 acres to be known as’Laman Indah’ which includes housing units to be built for settlers and Rumah Selangorku homes.
The entire project is expected to take 15 years to complete and has an estimated gross development value (GDV) of RM15 billion.
EcoWorld also announced that it is in the process of refining its partnership for growth business model to raise equity funding at the project level. The business model contemplates the initial acquisition of strategic lands by EcoWorld followed by the invitation of like-minded institutional / private equity / corporate partners to co-invest and fund the development. This will enable EcoWorld to acquire sizeable strategic lands without over-extending its balance sheet.
“Over the last two years we have received numerous enquiries from institutional funds as well as corporate and industry players expressing their interest to directly invest in development projects with us, particularly in the landed residential township segment. Now that we have found a sizeable tract of land in an important growth location, we will be exploring opportunities to work with such potential partners to jointly develop the land,” said President & CEO Dato’ Chang Khim Wah.
He added that EcoWorld intends to retain a minimum 30% equity stake in the development under the proposed partnership for growth model to assure that the Group enjoys a meaningful share of the development profits. The project will also continue to be managed by EcoWorld as Development Manager and will be marketed as an EcoWorld brand development. This potentially creates a new fee-based income stream for EcoWorld whilst the introduction of direct investors at the project level will assist the Group to reduce its gearing.
The Group’s success with its township developments is attested by the strong sales it has garnered in less than two years of operations. As at 31 August 2015, total cumulative Group sales has exceeded RM5.5 billion with the bulk having been contributed by townships in the Klang Valley and Iskandar Malaysia.
Chang shared that within the Klang Valley, the Group’s Eco Majestic township in Semenyih contributed RM1.445 billion sales and its Eco Sanctuary township which was recently launched on 13 June 2015 has already achieved RM580 million sales.
Down south in Iskandar Malaysia the Group has recorded RM2.289 billion from its townships with another RM510 million contributed by business park developments.
“This strong performance despite the prevailing soft market conditions in Iskandar Malaysia demonstrates the resilience of the landed township and business park segments of the property market which the Group has been focusing on from the outset,” Chang said.
The Lands’ location in an emerging growth corridor with access to the ports and major suburban centres is ideal for the Group to replicate the success it has achieved in Iskandar Malaysia, where well-planned gated and guarded green business parks are situated adjacent to or within the vicinity of an EcoWorld township.
Sharing further on the proposed acquisitions, Chang added the development will be modelled closely after the Group’s complementary Eco Tropics and Eco Business Park III projects which are situated adjacent to each other in the emerging Pasir Gudang Corridor.
Eco Gardens will be designed as an EcoWorld signature township with a majestic entrance statement, beautifully landscaped roundabouts, parks, gazebos and lakes. The first phase of landed homes will be offered at accessible prices starting from approximately RM400,000, similar to Eco Tropics.
Meanwhile, Eco Business Parks V and Laman Indah will broaden and deepen the Group’s product offerings in the Klang Valley to include its sought after integrated green business parks and a wider range of affordable homes to meet the high-demand for such homes in the state of Selangor.
Chang said the development will also help accelerate the pace of industrialisation and fuel job creation, thereby driving further residential and commercial growth in the North-Western Klang Valley corridor.
The Lands are well connected to established suburban centres such as Kota Damansara, Shah Alam and Sungai Buloh via major roads – Jalan Batu Arang, Persiaran Mokhtar Dahari, Jalan Meru Tambahan and Jalan Kuala Selangor as well as existing highways namely the LATAR Expressway, North-South Expressway and Guthrie Expressway. The accessibility to the Lands will be enhanced with new proposed expressways which includes the West Coast Expressway.
Liew said the proposed acquisition augurs well for EcoWorld and is in line with its strategic plans to establish a strong and dominant presence in all the key growth corridors of the Klang Valley.
“We are confident that this new development will be well received and will contribute positively to the future earnings of the Group,” he added.