Malaysia-based property developer EcoWorld Development Group has inked agreements to sell land, build and lease a data center to Pearl Computing Malaysia, an affiliate of Google.
EcoWorld said in a statement on Tuesday that it had entered into an agreement with Pearl Computing Malaysia to dispose of 58 acres of leasehold industrial land within Eco Business Park V (EBP V) in Selangor for a cash consideration of MYR 266.1 million ($60.18 million).
EcoWorld, via its wholly-owned subsidiary Quantum Alpha, has also signed agreement to build and lease the shell and core of data centers and associated structures on a separate, approximately 92.44 acres of land at EBP V, in accordance with the Lessee’s specifications (ATBL project).
The agreement between the Lessee and Quantum Alpha is for an initial term of 20 years, with a renewal option of up to 10 additional years.
“The sale of the 58 acres of land at EBP V presents an opportunity for the group to realize the value of our matured industrial landbank and host another hyperscale data center operator at one of our industrial parks, this time in the Klang Valley,” said Chang Khim Wah, President and Chief Executive Officer of EcoWorld.
According to him, since FY2024, the firm has entered into four notable sales of industrial lands to market leading data center players, which demonstrates the suitability of its business parks as ideal sites for digital and high-tech operations.
“Collectively, the proceeds from these sales amount to MYR 1.59 billion ($360 million),” he added.
The completion of these land deals will add on to the group’s cash position (including short-term funds) which stood at MYR 1.36 billion ($310 million) as at October 31, 2024.
EcoWorld Malaysia intends to quickly redeploy this substantial boost to its cash reserves to expand its landbank for development whilst actively pursuing strategic opportunities to grow its portfolio of recurring income assets in a meaningful manner.
“EcoWorld Malaysia’s rapid growth from 2013 to 2024 was founded on the strength of our five development revenue pillars, designed to serve the varied business needs and lifestyle aspirations of a wide group of property buyers across the industrial, commercial and residential market segments,
“As we mature as a property group, we are constantly evolving and improving our business model,” said Chang.
According to him, the ATBL project is in line with the firm’s plans to build up a strong portfolio of investment properties, which will establish a solid foundation of recurring income sources to complement and anchor the cashflow and earnings from the group’s development activities.
“The lease will provide us with very stable recurring income over the lease terms,
“Accordingly, this is an ideal asset to serve as the cornerstone of EcoWorld Malaysia’s recurring income aspirations, as it will deliver sizeable fixed rental income revenues over the next 20 to 30 years,” he added.
At present, the Lessor is a wholly owned subsidiary of EcoWorld Malaysia.
However, discussions are underway with various parties to jointly undertake the ATBL project.
This will result in EcoWorld Malaysia eventually owning up to 80 perncet of Quantum Alpha, according to Chang.
EcoWorld Malaysia is a public listed Malaysian company involved in property development with more than 9,000 acres of landbank in the Klang Valley, Iskandar Malaysia and Penang, and an estimated total gross development value of MYR 90 billion ($20.36 billion).
Pearl Computing is a private limited company incorporated in Malaysia.
It is a wholly-owned subsidiary of Raiden APAC, a company incorporated in Singapore, and is part of a multinational technology corporation headquartered in the United States.
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