ECO World Development Group Bhd (EcoWorld Malaysia) is buying 200 acres (80.9ha) of freehold land in Iskandar Puteri, Johor, from Khazanah Nasional Bhd and Iskandar Waterfront Holdings Sdn Bhd (IWH) for RM304.92 million to develop homes for the M40 (Middle 40%) income group.

In a statement yesterday, the group said its subsidiary, Melia Spring Sdn Bhd, signed a sale and purchase agreement with River Retreat Sdn Bhd, the landowner, to acquire the land.

River Retreat is a wholly owned subsidiary of Iskandar Coast Sdn Bhd, which in turn is 80%-owned by Iskandar Investment Bhd and 20%-held by IWH.

Sovereign wealth fund Khazanah has a 60% stake in Iskandar Investment, according to its 2018 annual report. Iskandar Investment’s other shareholders are the Employees Provident Fund and Kumpulan Prasarana Rakyat Johor Sdn Bhd — a property and infrastructure development firm fully owned by the Johor state government, as per its website.

Meanwhile, IWH is majorityowned by tycoon Tan Sri Lim Kang Hoo. IWH-CREC Sdn Bhd, a joint venture between IWH and China Railway Engineering Corp (M) Sdn Bhd, will be holding a signing ceremony for the revived Bandar Malaysia project today.

EcoWorld Malaysia said Melia Spring also signed a conditional development agreement with Permodalan Darul Ta’zim Sdn Bhd (PDT), whereby PDT agreed to nominate Melia Spring to purchase the parcel of land from River Retreat and for Melia Spring to develop the new plot.

In return, Melia Spring will pay RM20 million to PDT — a firm controlled by the Johor state government.

Melia Spring will also pay PDT a 20% share of the profit after tax from each phase of the proposed development.

The development costs for the proposed development will be funded through a combination of internally generated funds and/or bank borrowings.

The new plot of land is located next to EcoWorld Malaysia’s Eco Botanic township and is proposed to be developed into a mixed residential and commercial township development with a preliminary estimated gross development value of RM1.67 billion.

“The rapid development of Eco Botanic has left us with only 100 acres of remaining undeveloped land plot. As such, the acquisition of the land plot today makes perfect sense.

“The collaborative structure of the transaction, plus the fact that we have already invested substantially to build our brand and market presence here, gives us great flexibility to create an optimal mix for the new development to serve the housing needs of the M40,” EcoWorld Malaysia president and CEO Datuk Chang Khim Wah (picture) said.

The group intends to leverage on these advantages to launch products suited to first-time homeowners and the M40 target group.

It has been more than six years since the group acquired any land parcel in Iskandar Malaysia, Chang added.

The proposed development is in line with the group’s plans to introduce a new range of homes priced from RM300,000 to RM450,000 to capitalise on the infrastructure and lifestyle amenities at existing projects such as Eco Botanic.

The prospects of the proposed development are “excellent” and will enable EcoWorld Malaysia to ride on the continued development progress being made in Iskandar Malaysia, and take advantage of the growing market catchment there, the group added.