Analysts optimistic on EcoWorld-JLand JVs in Iskandar Malaysia

KUALA LUMPUR: Research banks remain optimistic about EcoWorld Development Group Bhd's (EcoWorld) joint venture (JV) with JLand Group (JLG), a Johor Corporation company, as it allows EcoWorld to expand its landbank into prime locations and supports the group's growth strategy.

Last Friday, EcoWorld entered into three subscription and shareholders' agreements with JLG to jointly undertake two projects in Iskandar Malaysia and one in Australia on a 50:50 basis.

The three projects are: Macquarie Park in Sydney, with a gross development value (GDV) of RM425 million; a Larkin mixed residential and commercial development on 3.42 hectares (ha) (8.44 acres) with a GDV of RM1.02 billion; and an Ibrahim Technopolis (IBTEC) South 127.88-ha (316-acre) industrial park with a GDV of RM1 billion.

In a research note today, CGS International said land acquisition costs are attractive relative to the historical range of previous transactions, supporting its view that the upcoming developments should be earnings-accretive.

"We also believe this partnership could pave the way for a broader collaboration with JLG Investment Holdings, which owns about 6,800 ha (16,800 acres) across Johor.

"While Macquarie Park represents EcoWorld's first overseas venture, we expect near-term earnings contributions to be limited given Australia's build-then-sell model and the group's significantly larger Malaysian portfolio," the global investment house said.

RHB Investment Bank Bhd (RHB IB) said the IBTEC industrial JV project will be developed into Eco Business Park 9 @ IBTEC, signalling a clear pipeline of industrial park developments under EcoWorld's portfolio.

"We make no changes to our financial year 2026 (FY 2026) to FY 2028 earnings, as earnings from Macquarie Park will be on a completion basis, while development profit from the Larkin project will likely come in only around late FY 2028," RHB IB said.

Although EcoWorld is now directly undertaking an overseas project, its management clarified that the company's primary focus remains in Malaysia.

"The two JVs are strategic given JLand's vast Johor landbank and the importance of Iskandar Malaysia as a key market for EcoWorld," it added.