EcoWorld announces build & lease data centres as part of recurring income strategy

• EcoWorld’s steady accumulation of recurring income receives boost from rental agreement with Google affiliate, Pearl Computing.

KUALA LUMPUR (Feb 27): Recent deals between Quantum Alpha Sdn Bhd (QASB) a subsidiary of Eco World Development Group Bhd (EcoWorld) and Google affiliate, Pearl Computing Malaysia Sdn Bhd (Pearl Computing) will form part of EcoWorld’s recurring income strategy.

QASB will develop and lease data centres on 92.44 acres of land in Eco Business Park V (EBP V), Selangor, to Pearl Computing, with an expected rental yield of RM4.8 billion over 20 years, with an option to extend the agreement by another 10 years.

This is the first “build and lease” data centre project by EcoWorld, and will complement other recurring income strategies to be implemented by the developer.

“EcoWorld has done very well in terms of sales,” said Eco World Development Group Bhd president, executive director, and CEO Datuk Chang Khim Wah during his presentation on the group’s recurring income strategy.

“In the last 11 years, we have achieved over RM37 billion and we now turn our attention to accumulating recurring income. We have been building this income steadily for the past 12 months, with (Eco) Labs contributing to a part of this.”

QUANTUM has seen four major land sales occur since its launch, with 120 acres sold to Microsoft in Quantum Edge, Kulai, Johor; 59 acres to Princeton Digital Group; another 138 acres to Microsoft in Eco Business Park 1, and 58 acres to Google.

“These have all been purely land transactions. Our role is to develop the infrastructure, work with stakeholders, obtain the titles and transfer it to the hyper scalers and data centre operators who have purchased the land from us. Upon completion, the money is then reinvested in our other ventures,’’ Chang explained.

EcoWorld reiterated that its five revenue pillars (Eco Townships, Eco Rise, Eco Hubs, Eco Business Parks, and QUANTUM) each contribute to the recurring income base, with a goal to achieve up to 30% in the next three to five years.

New launches under Eco Townships and Eco Rise are to remain the “bread and butter” for EcoWorld.

“We have never gone below RM1.5 billion in sales with Eco Townships, and this pillar remains our bread and butter. With the purchase of 240 acres of land for Eco Botanic 3 in Johor, and 847 acres in Broga for Eco Radiance, it is looking very exciting for us,” said Chang.

“Eco Rise has also seen a growth in sales from RM400 million two years ago, to RM1.1 billion, as of last year, and we are continuing this growth with new duduk projects in Kajang and Kota Kemuning,” added Chang.

Data centres vital to job creation

Data centres can act as a catalyst for Malaysia’s industrial and technological growth, according to Ministry of Investment, Trade and Industry (MITI) deputy minister Liew Chin Tong.

“The need for data centres to use sustainable practices in their operations can lead to us seeing more adoptions of renewable energy sources. This in turn will drive the need to develop and adopt technologies that are more energy and water efficient,” said Liew in a dialogue session with Chang, and Eco World Development Group Bhd deputy CEO Liew Tian Xiong.

Liew explained that Malaysia can also benefit from strengthening local supply chains for data centre equipment. “Data centres are a part of a larger ecosystem and value chain,” he said.

“The surge in demand for data centres means an equal demand for equipment. Whether they are foreign or Malaysian companies, we want to encourage data centre equipment manufacturers to set up their operations near our data centres. This will create a strong local supply chain for both data centre equipment and Malaysian technology,” said Liew.

“The goal is to create local champions who can grow to become major players in the global or regional data centre equipment manufacturing arena,” added Liew.

Liew also gave reassurances that Malaysia will still maintain its position as a positive environment for international investors.

“The upcoming New Investment Incentive Framework (NIIF), will provide a new way of looking at how to incentivise investments. We are taking a new approach, and not incentivising investments purely on numbers. We want to attach more conditionalities so that we can maximise benefits for the nation, but at the same time create a much better ecosystem for everyone,” said Liew.

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