PETALING JAYA: ECO WORLD DEVELOPMENT GROUP Bhd and the Employees Provident Fund (EPF), which are teaming up for the third time, are undertaking maiden township developments in Penang.
Under the joint venture (JV), they will be building two townships in Batu Kawan in Seberang Prai with a combined gross development value of RM7.76bil.
“The land will be developed by Eco Horizon Sdn Bhd into two complementary townships known as Eco Horizon and Eco Sun on 375 acres of prime land,” Eco World said in a statement, after the signing of a conditional subscription and shareholders’ agreement with the EPF yesterday.
Under the agreement, the EPF will subscribe to four million shares or 40% in Eco Horizon and will provide shareholders advances to the latter to fund the proposed developments. Eco Horizon Sdn Bhd (EHSB or JVCo) is a unit of Eco World.
Eco World will continue to own 60% of the JVCo. Eco World Project Management Sdn Bhd (EWPM), a unit of Eco World, will be appointed as the development manager for the projects.
The JVCo will also enter into a brand licence agreement with EWPM to enable Eco Horizon and Eco Sun to be marketed as Signature EcoWorld developments.
“We are truly gratified with the EPF’s support as we take on the challenge of transforming the development landscape of the Penang mainland together.
“This will be our third venture together after two successful projects in the Klang Valley, namely, the iconic Bukit Bintang City Centre (BBCC) at the heart of Kuala Lumpur’s shopping and tourism district, and Eco Grandeur + Eco Business Park V in Ijok in the North-Western Klang Valley emerging corridor,” said Eco World chairman Tan Sri Liew Kee Sin.
The 300-acre Eco Horizon is just off the primary interchange linking the second Penang bridge to the North-South Highway opposite the proposed Ikea development.
Eco Sun covers 75 acres and is along Lebuhraya Bandar Cassia close to the Penang state stadium.
Eco World president and CEO Datuk Chang Khim Wah said that the latest venture would showcase the full spectrum of its development capabilities in Penang.
“The land size and location present a unique competitive advantage – at 375 acres, it will allow the group to offer our Signature EcoWorld gated and guarded strata townships, as well as integrated commercial components yet to be seen so close to the island,” he added.
Eco Horizon and Eco Sun are accessible from the Batu Kawan Interchange of the North-South Highway via an expressway linking to the second Penang bridge and thence onto Lebuhraya Bandar Cassia.
Alternatively, it is accessible from the Bukit Tambun interchange of the North-South Highway via Jalan Bukit Tambun, Jalan Batu Kawan and thence onto Lebuhraya Bandar Cassia.
“EPF’s confidence and trust in EcoWorld will spur us to further improve on our development concepts to create ground-breaking twin townships in the Batu Kawan growth corridor that will capture the hearts of not just the Penang market but also aspiring homeowners and upgraders in the northern region,” Chang said.
Eco World first joined hands with the EPF in early 2015 to develop BBCC, a fully-integrated inner-city high-rise urban regeneration project. UDA Holdings Bhd is the other joint developer of the project.
Last November, Eco World and the EPF formalised an agreement to develop 2,198 acres in Ijok, Selangor into a mixed-residential and commercial development known as Eco Grandeur and an integrated business park known as Eco Business Park V.
The JV will be undertaken through Paragon Pinnacle Sdn Bhd, which is a wholly-owned subsidiary of Eco World.
The partnerships between Eco World and the EPF in different property development projects indicate the pension fund’s move in restructuring its investment strategies.
In September last year, EPF CEO Datuk Shahril Ridza Ridzuan had stated that the fund was looking to diversify its investment portfolios, namely, in private equity, property and infrastructure in a bid to boost returns.
“In the next three to four years, the fund is aiming to boost investments in the three segments so they account for about 10% of total assets, compared with more than 6%.
“We’re convinced that they are viable asset classes, which will help us meet our inflation-hedging targets,” he said, adding that the EPF was on the lookout for property assets in the UK as investors seek to exit after the counwithdrew from the European Union.