KUALA LUMPUR (Nov 7): Eco World Development Group Bhd (KL:ECOWLD), via its 81%-owned subsidiary Mutiara Balau Sdn Bhd, is buying 10 parcels of land measuring 847.25 acres in Semenyih, Selangor for RM742.41 million, cash. It plans to use the plots for a new mixed development called Eco Forest 2, which is expected to have an estimated gross development value of RM4.6 billion.

The transaction follows Mutiara Balau's participation in a request for proposal process initiated by Boustead Properties Bhd for development of the plots, which are located next to EcoWorld's Eco Forest township. Boustead Properties is also the shareholder of the remaining 19% in Mutiara Balau.

Mutiara Balau on Wednesday inked two conditional sale and purchase agreements to buy the plots (new land) from Boustead Properties' sister companies, Boustead Plantations Bhd and Boustead Palau Sdn Bhd, according to a Thursday filing by EcoWorld.

EcoWorld said it will fund the acquisitions via a combination of bank borrowings and internal funds. The transactions are conditional, among others, upon the approval of the Equity Development Division (previously known as the Economic Planning Unit) of the Ministry of Economy.

On the same day, EcoWorld and Boustead Properties inked a shareholders agreement to regulate their relationship as shareholders of Mutiara Balau, which grants Boustead Properties a put option to require EcoWorld to purchase Boustead Properties' 19% stake in Mutiara Balau for RM147.62 million, exercisable for one year and three months after the completion of the land acquisitions.

The agreement also dictates that EcoWorld will fund or procure the funding required for the acquisitions and proposed development, while Boustead Properties shall liaise and negotiate with the vendors of the lands for the acquisitions, and provide reasonable assistance to facilitate the implementation of the development.

Both parties also agree that Mutiara Balau will appoint Eco World Project Management Sdn Bhd, wholly owned by EcoWorld, as the project's development manager.

EcoWorld expects the acquisition to be completed by the first half of 2025.

"The new land is strategically located immediately adjacent to Eco Forest and it is close to Eco Majestic, both of which are the group’s existing matured townships in the Klang Valley... The proposed land acquisitions allow EcoWorld Malaysia to replenish its residential land bank 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," its filing read.

"Given the high demand for well-designed townships in the Klang Valley and the group’s established track record in the locality, the board is confident that the proposed development will be well received. This augurs well for the group’s future growth and earnings prospects," EcoWorld added.

Shares in EcoWorld currently traded flat at RM1.82, valuing the company at RM5.34 billion. Year-to-date, EcoWorld’s share price has surged by over 68.52%.