Eco World to build Eco Marina in Penang

KUALA LUMPUR (April 20): AllianceDBS Research reported on April 17 that the Eco World Development Group Bhd (ECW) announced that it had received a letter of award (LOA) from the Penang Development Corporation (PDC) for the proposed acquisition of 299.64 acres (121.26ha) for the development of an international standard golf course for RM65.34 million (RM10 psf).

ECW is also be planning a major township development, Eco Marina, worth RM10 billion that comprises of residential (60%) and commercial (40%) properties with water-fronting facades. The proposed land acquisition at RM56psf may appear to be steep but this could be due to the 2.5km coastline that has resulted in such premium pricing.

ECW’s board is currently reviewing the detailed terms of the LOA and more information on the deal will be furnished upon its acceptance. Assuming that Eco Marina is developed over 15 years, it will increase the revalued net asset value (RNAV) by RM0.25 or 8% of the current RM2.97 RNAV. Nevertheless, the total purchase consideration of RM796 million only accounts for 8% of Eco Marina’s gross development value which underscores ECW’s confidence in rolling out a successful township development.

The development will take place is on a 99-year leasehold land for RM730.93 million (at RM56 per sq foot [psf]) for mixed development, and proposed leasing of a 150-acre piece of land for 30 years (with 30-year renewal option). AllianceDBS Research’s report also appeared in The Edge Financial Daily today.