PETALING JAYA: The Employees Provident Fund (EPF) has entered into a subscription and shareholders’ agreement with Eco World Development Group Bhd (Eco World) to jointly develop 2,198.4 acres of leasehold land in the Klang Valley.
In a statement, the property group said the land is slated to be developed into a mixed residential and commercial project to be known as Eco Grandeur and an integrated business park to be called Eco Business Park V.
The joint venture (JV) will be undertaken through Paragon Pinnacle Sdn Bhd (PPSB), which is a wholly-owned subsidiary of Eco World. Additionally, Eco World will be appointed as the development manager for the projects.
Under the agreement, the EPF will subscribe to four million ordinary shares, representing 40% of the enlarged paid-up capital of PPSB and provide shareholder advances of RM367mil to the JV to fund the two projects.
“Over the years, we have had the privilege of working with the EPF on several occasions. We are delighted to be able to partner with it yet again to develop Eco Grandeur, the largest township undertaken by Eco World to date and Eco Business Park V, our first gated and guarded multi-concept business park in the Klang Valley,” said Eco World chairman Tan Sri Liew Kee Sin in the statement.
In a filing with Bursa Malaysia, the group disclosed that part of PPSB’s funding requirements would be raised from RM367mil in advances by the EPF and RM175mil in advances by Eco World.
The share subscription by the EPF is expected to be completed by the first quarter of next year.
The board of PPSB will also comprise a maximum of five directors with three from Eco World and two from the EPF.
Eco World had purchased the 2,200-acre leasehold land in Ijok, Kuala Selangor, in September last year for RM1.18bil.
The Eco Grandeur township project will take up 1,400 acres from the total landbank.
Aside from the two proposed developments, PPSB will also undertake the construction of affordable homes over 280 acres to be known as Laman Indah.
The estimated gross development value from the developments was RM15bil over a 15-year period based on management estimates, Eco World said.
The EPF had partnered with Eco World on major property ventures previously including the RM8bil Bukit Bintang City Centre development.
The pension fund had stated that it was keen on undertaking more investments for its real estate and alternative asset portfolio, which included direct stakes in developments as opposed to owning shares in public-listed property firms.
According to Eco World president and chief executive Datuk Chang Khim Wah, the venture also marks the third development the group has undertaken via its partnership-for-growth model, which enables it access to prime land to be developed without over-extending its balance sheet.
“We also look forward to more such ventures with the EPF or other like-minded partners to enable us to accelerate our growth and expand our development footprint, whilst ensuring that our gearing is well-managed,” he said.