EcoWorld Reaffirms its Commitment to the Penang market with the acquisition of 374.5 acres of land in Batu Kawan
KUALA LUMPUR: Eco World Development Group Berhad [EW Berhad] today announced that it had entered into several agreements for the acquisition of two parcels of lands measuring 374.5 acres in total in Batu Kawan for a combined purchase consideration of RM875.24 million (“Proposed Acquisitions”).
The Proposed Acquisitions are in line with its strategy of concentrating on the nation’s three main economic regions of the Klang Valley, Iskandar Malaysia and Penang and ensuring that the EcoWorld brand is strongly represented in the key growth corridors within each region.
In the case of Penang, the Group’s focus is on the mainland, specifically the Batu Kawan growth corridor. This will complement the Group’s successful Eco Meadows township on the mainland which has achieved near-sold out sales of its first phase of terrace homes since its first launch in September 2015.
Batu Kawan is set to become the third satellite town of Penang after Bayan Lepas and Seberang Jaya due to its strategic location and close proximity to the Second Penang Bridge, which connects Bandar Cassia with Batu Maung on the Penang Island. Through the Penang Development Corporation (PDC), the State Government of Penang is strongly promoting a 1,500-acre comprehensively planned technology industrial park with well-equipped infrastructure and support services in Batu Kawan. This park will be the lynchpin for growth in the high-tech and high-value added manufacturing and services sectors for the next 15 years until 2030.
Phase 1 of the Batu Kawan Industrial Park has reportedly garnered interest from 29 local SMEs with total investments of around RM196 million that will create employment for approximately 2,000 people. The park has also attracted prominent industry players such as Bose System Malaysia Sdn Bhd (high-performance audio equipment), Seagate (hard-drive electronics), SanDisk (flash drive electronics), Boon Siew Honda (one-stop motorcycle manufacturing), IBIDEN (electronics) and VAT Manufacturing Malaysia (Swiss hi-tech company involved in high-precision valves) to set up their manufacturing plants there.
This new area is also poised to draw a wide and varied pool of investments across various sectors through the development of a 150-acre SME Village that offers ready-built factory units and a service centre for the development of local investors.
Commercial developments planned within Batu Kawan include premium outlets, hotels, resort hotels, hospital resorts and Taman Aqua, a theme park with Meetings, Incentives, Conferencing & Exhibition facilities. Notable developments in Bandar Cassia include the first IKEA store outside the Klang Valley, the Penang Designer Village, University of Hull, KDU University College and Penang International Technology Park.
“Following the rescission of the Letter of Award for the Group’s proposed Eco Marina development in Batu Kawan, the EcoWorld brand is under-represented in Penang. The Proposed Acquisitions therefore provide EW Berhad with a replacement opportunity in the form of prime lands of a similar size in this fast-growing industrial / commercial and residential hotspot,” said Dato’ Chang Khim Wah, President & CEO of EW Berhad.
“The Lands are also very strategically located within Batu Kawan. The first parcel which measures approximately 300 acres is a situated just off the primary interchange linking the 2nd Penang Bridge to the North-South Highway right opposite IKEA,” he commented.
“We intend to develop this 300-acre parcel into full-scale Signature EcoWorld Township to be known as Eco Horizon featuring landed homes within a gated & guarded strata environment along with integrated commercial components. The second parcel measuring approximately 74.5 acres is located along Lebuhraya Bandar Cassia close to the Penang State Stadium. This will be a more compact township to be known as Eco Sun. Both these developments are expected to generate a combined Gross Development Value (GDV) of RM7.76 billion,” explained Chang.
With the Proposed Acquisitions, EcoWorld’s landbank and GDV by geographic region will be as follows:
This is an optimal spread which reflects the demographic structure of the country’s population both in terms of size and relative income levels.
Township development is the Group’s forte as evidenced by the many successful townships it has launched to date which have contributed the main bulk of the sales achieved from FY2014 to FY2016. These include Eco Majestic and Eco Sanctuary in the Klang Valley, Eco Botanic, Eco Spring & Summer and Eco Tropics in Iskandar Malaysia and Eco Meadows in Penang.
Townships, in particular landed gated & guarded developments, are also the most resilient segment of the Malaysian property market. In addition, it provides the greatest opportunity for long-term value creation as the townships mature. Following the Proposed Acquisitions, the breakdown of the Group’s GDV based on market segmentation is as follows:
|Market Segment||GDV(RM BIllion)||%|
|Mass/ Upgrader townships||45.108||51.5%|
|Aspirational / Luxury townships||20.468||23.4%|
|Integrated Commercial / High-rise residential||10.377||11.9%|
“Now that we have secured these strategic parcels of lands in Batu Kawan, we have completed the final piece of our jigsaw puzzle in Penang. From a Group perspective, we have also achieved an optimal geographic spread with landbank focused only in the most economically vibrant regions. The strong market share we have gained in the resilient township segment further enables us to offer a wide variety of products to our customers which we can easily adjust to suit changes market conditions and lifestyle preferences. This establishes a very solid foundation which positions us well to achieve sustained and exciting growth in the years ahead for the benefit of all our stakeholders,” said Chang.