KUALA LUMPUR: Eco World Development Group Bhd (Eco World Malaysia) is buying 342.86 hectares (ha) of land owned by Boustead Properties Bhd (BProp) in Semenyih for RM742.4 million cash, to be developed into a RM4.6 billion mixed development.
The purchase will be made via a joint venture company, Mutiara Balau Sdn Bhd (MBSB), in which Eco World Malaysia holds a 81 per cent interest, and BProp a 19 per cent interest.
Eco World Malaysia will fund the purchase of the 10 land parcels and the development cost of the project.
The deal comes with a put option granted by Eco World Malaysia to BProp to require Eco World Malaysia to purchase BProp's 19 per cent stake in MBSB for RM147.6 million.
Eco World Malaysia also has a call option to require BProp to sell its 19 per cent stake under the same terms.
The new land, located in Mukim Beranang and Mukim Semenyih in Ulu Langat, Selangor, is next to Eco Forest and near Eco Majestic.
According to EcoWorld, the site is well positioned within a designated development area, and its over 35-year-old palm trees are no longer suitable for productive use.
"This acquisition allows EcoWorld Malaysia to replenish its residential landbank in the Semenyih corridor, extending the development life of its existing townships. "The new land is planned to be developed into a mixed residential and commercial development with a preliminary estimated gross development value of RM4.60 billion."
"To be known as Eco Forest 2, the proposed development will primarily comprise landed homes targeting the mass market segment," it said in a statement today.
Given the high demand for well-designed townships in the Klang Valley and EcoWorld's established track record in the locality, the board of Eco World Malaysia is confident that Eco Forest 2 will be well received.
EcoWorld Malaysia said this augurs well for the group's future growth and earnings prospects.
Eco Majestic, launched in 2014, was the first EcoWorld township in Klang Valley, conceptualised as a gated and guarded community for upgraders.
Eco Forest followed in 2017, catering to first-time homebuyers.
The two developments span 633.7 hectares with RM5.2 billion cumulated sales recorded as at Aug 31, 2024, according to the group.
It noted that currently 28 per cent of the land is still undeveloped, and mainly earmarked for commercial development.
Eco World Malaysia's share price was unchanged at RM1.82 a share, giving it a market capitalisation of RM5.4 billion.