EcoWorld’s Data Centre Bet Hits Jackpot with RM1.3bil Payoff
Land Deals Total RM1.3 Billion in Less Than a Year
EcoWorld Development Group Bhd (EcoWorld) has sealed three land sale deals totalling about RM1.3 billion for data centre projects in Johor, with the latest being a RM693.96 million deal with Microsoft.
Microsoft’s Second Land Deal with EcoWorld
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 is the second land deal between the two companies, 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 total RM1.1 billion.
Princeton Digital Group’s Land Deal
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’s Focus on Industrial Parks
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.
Close Engagements with Technology Leaders
EcoWorld said its close engagements with technology leaders such as Microsoft have 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," the company said in a bourse filing last September.
Financial Performance
EcoWorld’s industrial component 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.
Maybank’s 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.
Conclusion
EcoWorld’s bet on data centre projects has paid off, with the company securing three land deals totalling RM1.3 billion in less than a year. The company’s focus on industrial parks and close engagement with technology leaders have contributed to its success in the data centre segment.
FAQs
- What is the total value of EcoWorld’s data centre land deals?
RM1.3 billion - Which company is the second land deal with EcoWorld?
Microsoft - What is the total value of the two deals with Microsoft?
RM1.1 billion - What is EcoWorld’s focus on in its industrial parks segment?
Artificial intelligence (AI), cloud computing, high-tech manufacturing, and research and development - What is the current market capitalisation of EcoWorld?
RM6.07 billion - What is the current market capitalisation of EcoWorld, year to date?
RM6.07 billion, down 4.2%