Eco World buys Semenyih land for RM3.5b township

KUALA LUMPUR: Eco World Development Group Bhd plans to develop a mixed residential township with a gross development value (GDV) of RM3.5 billion in Semenyih, Selangor, following the acquisition of a 492.66-acre (199.4ha) tract there.

The project will have a focus on affordable housing.

“It will complement the group’s overall master development strategy for [its current project called] EcoMajestic,” said Eco World president and chief executive officer Datuk Chang Khim Wah in a statement yesterday.

The group yesterday announced the acquisition of the Semenyih land from Univas (Far East) Sdn Bhd for RM225.33 million or RM10.50 per sq ft, as part of its plans to increase its pipeline of projects in the Klang Valley, Iskandar Malaysia and Penang to gain market share and lock in future growth.

The latest acquisition will increase the property developer’s landbank to more than 4,000 acres from 1,326.6 acres currently.

In a filing with Bursa Malaysia yesterday, Eco World said its unit Majestic Blossom Sdn Bhd had yesterday signed a conditional sale and purchase agreement (SPA) with Univas for the proposed acquisition which is expected to be completed by the fourth quarter of this year.

The SPA is conditional upon fulfilling conditions precedent within six months, including securing the approvals of the Estate Land Board for the transfer of the land, the shareholders of Eco World at an extraordinary general meeting to be convened and any relevant authorities.

“Majestic Blossom is currently in the initial stage of planning the development and it will need to submit a detailed development plan to the relevant authorities for approval,” said Eco World.

“It is now too preliminary to ascertain the total development costs, timing of development, expected profits as well as the additional financial commitment required for the project pending submission of the development plan for approval by the authorities,” it added.

The group expects to finance the proposed acquisition via internal funds and/or bank borrowings.

The freehold tract is located between the towns of Semenyih and Broga, and is within close proximity to the 1,073-acre EcoMajestic — Eco World’s first township project in the Klang Valley.

Chang said the group was encouraged by the response to its recently launched EcoMajestic, which saw a take-up of 95% for the first phase of 612 units of 2-storey terraced houses.

“This latest acquisition will increase our landbank in Semenyih to some 1,500 acres. With two sizeable projects in this fast-growing development corridor, Eco World is well-positioned to serve a broad range of customers and we intend to come up with exciting and innovative product offerings that will appeal strongly to the mass, upgrader and luxury home market,” said Chang.

“Given the location, there is good potential for upgraders and overspill demand to be captured from older neighbouring townships such as Bandar Rinching, Bandar Tasik Kesuma and Bandar Sunway Semenyih. The burgeoning student population created by Nottingham University and the land’s proximity to the proposed Bandar Kajang MRT Station are also supportive factors which bode well for its development prospects,” he added.

To further enhance accessibility and improve connectivity between EcoMajestic and the Semenyih land, Eco World plans to upgrade the existing connecting roads from EcoMajestic to Bandar Tasik Kesuma, an established residential area, and the Semenyih land.

Shares in Eco World closed four sen or 0.76% higher at RM5.31 yesterday, with a market capitalisation of RM1.34 billion.

EXPANDING LAND BANK... Univas (Far East) Sdn Bhd director Tee Cheng Hua (third from left) exchanging documents with Eco World Development Group Bhd president and chief executive officer Datuk Chang Khim Wah after the signing of a sale and purchase agreement yesterday for the acquisition of a 492-acre tract in Semenyih, Selangor by Eco World from Univas. Looking on are  Eco World director Tan Sri Liew Kee Sin (centre), executive director Liew Tian Xiong (right), Univas representative Jane Tee (left) and director Tee Lip Sin

This article first appeared in The Edge Financial Daily, on July 3, 2014.