PETALING JAYA: Eco World Development Group Bhd
(EcoWorld Malaysia) is disposing of industrial land measuring 123.141 acres in Kulai, Iskandar Malaysia, to Microsoft Payments (M) Sdn Bhd for RM402.3mil.
The property developer said the land is located within its Eco Business Park VI (EBP VI) development.
“Over the past several years, EcoWorld Malaysia has experienced a strong surge in demand for industrial products under its Eco Business Parks pillar.
“This enabled the group to achieve a 68% four-year compounded annual growth rate from financial year 2020 (FY20) to FY23 from the industrial segment, with more than RM1bil sales of industrial properties recorded in FY23 alone,” it said in a filing with Bursa Malaysia.
EcoWorld Malaysia said part of the RM402.30mil will be used for the development of the land and to defray associated expenses for the proposed land sale, which are expected to be incurred within 24 months from the date of the sale and purchase agreement.
“A portion of the disposal consideration will also be set aside for the repayment of bank loans for the land.
“However, at this juncture, the quantum for each of these utilisations has yet to be finalised and cannot be ascertained.”
The balance, EcoWorld Malaysia said, will be used as working capital.
“Timing of utilisation cannot be ascertained at this juncture as it will depend on the actual amount available and actual working capital requirements at that point of time.
“Any part of the disposal consideration that has yet to be utilised will be placed in deposits with financial institutions or short-term money market instruments.”
EcoWorld Malaysia said the country’s transformation into a data centre hub has further amplified demand, which the group is well-positioned to meet given its relatively large remaining industrial land bank of 1,068 acres, the bulk of which is in Iskandar Malaysia.
“Included in this land bank is the recently acquired EBP VI, measuring 403.78 acres in total.”
The property developer said the proposed land sale marks the first transaction for EBP VI, less than six months since EcoWorld Malaysia completed the acquisition of the land on Jan 18, 2024.
“The group believes the presence of an internationally recognised technology leader choosing to set up a sizeable data centre here will further drive demand for EBP VI’s other industrial products.
“In addition, it allows the group to rapidly unlock the value of EBP VI to accelerate cash flow generation from the project,” it said.
