In less than a year since, the property developer has sealed three land sale deals totalling about RM1.3 billion for data centre projects in Johor.
Earlier this week, EcoWorld announced it is selling 138.5 acres of industrial land located within its Eco Business Park I development in Tebrau, Johor Bahru, to Microsoft for RM693.96 million cash.
This will be its second land deal with the software giant, following the sale of 123 acres of land within the Eco Business Park VI in Kulai for RM402.3 million in June 2024. The two deals with Microsoft, which plans to operate data centres at the locations, total RM1.1 billion.
Sandwiched between these two deals, EcoWorld sold 57 acres in Eco Business Park VI to one of Asia’s leading data centre providers, Princeton Digital Group, for RM223.8 million last August.
EcoWorld, which is largely known for its premium township developments, has increasingly placed greater emphasis on its industrial parks segment.
In August 2024, the developer unveiled its fifth revenue pillar – Quantum – which are business parks designed to cater for companies specialising in artificial intelligence (AI), cloud computing, high-tech manufacturing as well as research and development.
The new focus differentiates Quantum from its existing business parks, which cater to conventional manufacturers.
The first business park under the Quantum concept was Eco Business Park VI in Kulai, which was rebranded as Quantum Edge Business Park.
In a bourse filing last September, EcoWorld said its close engagements over the previous six months with “global technology leaders” effectively fast-tracked its evolution as an industrial developer.
“By improving our understanding of their specific needs, expectations and requirements, we have been able to better serve a wide range of players in the digital and high-tech sectors,” it said.
EcoWorld said the industrial component of its business has been growing rapidly over the past four years with annual sales exceeding RM1 billion in its financial years ended Oct 31, 2023 (FY2023) and FY2024 from this segment.
It added the gain arising from the latest land sale cannot be determined at this juncture as it will depend on, among others, total land development costs incurred at the time of completion. The proposed land sale is expected to be completed in the first half of 2026.
In a note, Maybank Investment Bank said the latest deal with Microsoft not only accelerates the asset monetisation process and strengthens EcoWorld’s balance sheet, it also showcases the group’s ability to secure value-enhancing deals.
At RM115 per sq feet (psf), the price is within the transacted trend of RM75 to RM143 for data centres, and is also 52% higher than the first land sale to Microsoft at RM75 psf due to its more mature location, Maybank noted.
EcoWorld’s shares closed 1 sen or 0.5% higher at RM2.05 yesterday, giving it a market capitalisation of RM6.07 billion. Year to date it has fallen 4.2%, having recovered in recent days following a deeper drop of about 15% last month.
Investors then were spooked by the outgoing Biden administration’s additional restrictions on AI chip and technology exports in a bid to keep advanced computing power in the US and among its allies while seeking more ways to block China’s access.