KUALA LUMPUR: Eco World Development Group Bhd (EcoWorld) has teamed up with the Employees Provident Fund (EPF) to jointly develop a piece of 2,198.4-acre (890ha) leasehold land in the northwestern Klang Valley corridor in Kuala Selangor into a mixed project estimated to be worth RM15 billion.

EcoWorld inked several sell and purchase agreements last year to acquire the plot for RM1.181 billion, cash. As at Nov 2, acquisition of some 677.2 acres of the land was completed, with the remainder to be completed in stages.

The development entails a mixed residential and commercial development, “Eco Grandeur”, and an integrated business park, “Eco Business Park V”, which will be developed by its unit Paragon Pinnacle Sdn Bhd. Affordable homes will also be built on some 280 acres, to be known as “Laman Indah”, including Rumah Selangorku homes.

To formalise both parties' tie-up, EcoWorld said in a statement yesterday that a subscription and shareholders’ agreement (SSA) was inked with EPF and Paragon Pinnacle, which will see EPF subscribe to a 40% stake in Paragon Pinnacle, the joint venture company (JVCo).

The property developer said EPF is required to provide shareholders advances of RM367 million to the JVCo to fund the proposed developments, while EcoWorld will put up RM175 million of the same.

According to EcoWorld’s bourse filing, whatever else is required for the developments in terms of land and development expenditure would be raised via bank borrowings, proportionate shareholders advances, an increase in paid-up capital or an issuance of preference shares.

Under the partnership, EcoWorld will be appointed development manager for the projects, which will be marketed as Signature EcoWorld developments pursuant to a development management agreement and a brand licence agreement to be entered into with the JVCo.

EcoWorld chairman and founder Tan Sri Liew Kee Sin said the SSA signed was the culmination of months of hard work to arrive at a truly win-win partnership for both parties.

“Over the years we have had the privilege of working with EPF on several occasions — we are delighted to be able to partner with them yet again to develop Eco Grandeur and Eco Business Park V,” he added.

This was the second partnership between EcoWorld and EPF to jointly develop a strategic project, said EcoWorld president and chief executive officer (CEO) Datuk Chang Khim Wah, the first being Bukit Bintang City Centre.

It is also the third development that is being undertaken via the group’s partnership-for-growth model, a business model formulated to enable it to gain access to prime land and acquire and develop sizeable strategic land without overextending its balance sheet.

“The business model also enables EcoWorld to grow its fee-based recurring income stream through the development management and brand licence agreements with the JVCo,” said Chang.

EcoWorld said the 1,400-acre Eco Grandeur was launched on Sept 25. For its first launch, the project offers 20ft by 65ft Graham Garden terraced homes — with prices starting below RM500,000 — and 30ft by 60ft Avenham Garden homes priced around RM650,000.

Response so far has been “overwhelming”, said EcoWorld, with 81% take-up recorded for the 830 units opened for sale on the launch date.

“Next year we plan to launch Eco Business Park V, which will adopt the most successful concepts we have pioneered in Iskandar Malaysia to cater to business owners and industrialists in the Klang Valley,” said Chang, adding the group is confident the 518-acre project will be well received.

Shares in EcoWorld closed at RM1.33 yesterday, up two sen or 1.53%, giving the group a market value of RM3.66 billion.