THERE is excitement in the Johor property market as the country's top developer, Eco World Development Group Bhd (EcoWorld) is planning a new mixed-used township development worth an estimated RM1.67 billion in Iskandar Puteri, the state's second largest city.
Eco World's unit, Melia Spring Sdn Bhd is buying a piece of land in Iskandar Puteri for RM304.92 million from River Retreat Sdn Bhd.
River Retreat is 80 per cent owned by Iskandar Investment Bhd (IIB) (which in turn, is 60 per cent controlled by Khazanah Nasional Bhd) and 20 per cent by Iskandar Coast Sdn Bhd, a unit of Tan Sri Lim Kang Hoo's Iskandar Waterfront Holdings Sdn Bhd.
The remainder 40 per cent stake in IIB is split equally between the Employees Provident Fund and the state government of Johor's property arm, Kumpulan Prasarana Rakyat Johor Bhd.
In a statement issued yesterday, EcoWorld said Melia Spring will partner the Johor state government's investment arm, Permodalan Darul Ta'zim Sdn Bhd (PDT), to embark on the township development.
EcoWorld president and chief executive officer Datuk Chang Khim Wah, said Melia Spring has entered into a sale and purchase agreement (SPA) with River Retreat for the land in Iskandar Puteri.
Under the development agreement, EcoWorld and PDT are nominating Melia Spring to purchase the land from River Retreat and to develop it.
EcoWorld said it will pay a RM20 million nomination fee to PDT, for the latter's agreement to nominate Melia Spring to purchase the land.
The main market-listed firm will also pay PDT 20 per cent of Melia Spring's net profit from each phase of the proposed development.
EcoWorld said the land is located next to the group's Eco Botanic township in Iskandar Puteri, which is also its flagship township development in Iskandar Malaysia.
Chang expects the purchase to be completed by the end of 2020.
“This acquisition truly comes at an opportune time as it has been more than six years since we acquired any land in Iskandar Malaysia," said Chang.
During the last six years, EcoWorld launched four townships, namely Eco Botanic, Eco Spring, Eco Summer and Eco Tropics as well as three business parks, Eco Business Parks I, II and III.
Chang said all the projects in Iskandar Malaysia have performed tremendously well as evidenced by the RM6.3 billion cumulative sales EcoWorld recorded from 2014 to 2019.
For the latest project in Iskandar Puteri, EcoWorld and PDT plan to develop residential and commercial properties.
The township will include a new range of homes priced from RM300,000 to RM450,000. This is to take advantage of the outstanding infrastructure and lifestyle amenities already in place, said Chang, adding that the new project will emulate and extend EcoWorld's existing Eco Botanic township.
Chang said the acquisition also comes with attractive payment terms, whereby 98 per cent of the base price is payable over a seven-year period, starting a year after the launch date, to match the expected development tenure.
"This will minimise the initial cash outlay required from EcoWorld. The relatively low interest rate offered by the vendor will further help to reduce holding costs. Given the low upfront cash commitment, continued development progress achieved in Iskandar Malaysia, sizeable market catchment and strong demand created by Eco Botanic in the immediate locality, the development prospects of the new land are excellent," he added.
Besides Eco Botanic, neighbourhoods in Iskandar Puteri include Medini, Puteri Harbour, Educity, Kota Iskandar, Gelang Patah, Gerbang Nusajaya and SILC.
Iskandar Puteri also houses the Puteri Harbour International Ferry Terminal, with destinations to cities in Indonesia.