PETALING JAYA: Eco World Development Group Bhd
’s maiden Singapore residential project will likely hinge on whether private housing demand could support launch prices above S$3,000 (RM9,586) per sq ft (psf).
Such prices would allow the company to preserve healthy margins amid competing local supply, according to CIMB Research.
Eco World had secured the 4,283 sq m Lorong Puntong/Sin Ming Avenue leasehold site for S$208.1mil, or about RM667.6mil, implying a land cost of S$1,612 psf per plot ratio.
“In our view, success hinges on private housing demand supporting launch prices above S$3,000 psf to support healthy margins amid competing supply from Thomson Reserve and the landed sub-sale market,” CIMB Research said.
The bid was 11% above the second-highest offer and marked a new 99-year Government Land Sales record for pure private residential sites in Singapore’s Rest of Central Region.
“We remain measured on Eco World’s Singapore expansion as the group builds its track record in the local private residential market and seeks to differentiate its offerings amid competition from well-capitalised developers,” it said.
However, CIMB Research noted that the relatively small land parcel gives Eco World greater flexibility to absorb the higher land price while securing a strategically located site.
The project is expected to yield about 140 private homes and is planned for launch in 2028 under Eco World’s newly unveiled Versione series.
CIMB Research said Thomson Reserve, which is expected to launch in October 2026 with 1,268 units, should provide a more relevant pricing benchmark for Eco World’s project.
“The S$208.1mil purchase consideration should lift pro forma net gearing to 32% versus 22% as at April 30, 2026, with full settlement targeted in the first quarter of financial year 2027 (1Q27) ,” it said.
CIMB Research maintained its “buy” call and RM2.60 target price pending greater clarity on key development parameters.
Meanwhile, MBSB Research viewed the land award positively, as it provides Eco World with an opportunity to establish a foothold in Singapore while keeping its initial investment manageable.
“The smaller site size allows the group to gain development experience while keeping its initial investment manageable.
“The foray into Singapore could enhance Eco World’s earnings by providing an additional source of revenue and profits,” it noted.
MBSB Research estimated net gearing would also rise to 0.32 times from 0.22 times, which it is still considered healthy.
“The project is expected to support earnings growth beyond FY28. Hence, we make no changes to our earnings forecast for FY26, FY27 and FY28,” it said.
MBSB Research maintained its “neutral” call with an unchanged target price of RM2.09, adding that Eco World’s earnings outlook remained positive, supported by rental contributions from the Pearl Computing data centre.
Commenting on this project, Public Investment Bank Research said: “We understand that the land enjoys excellent connectivity via major roads and expressways and the Bright Hill MRT station, which will become an interchange station by 2030.”
“Pending more details, we keep our earnings estimates unchanged for now,” it said.
It maintained its “neutral” call and RM2.10 target price, citing Eco World’s consistent profit delivery and decent dividend yield.
