MARC Ratings has affirmed its AA-IS(cg) rating on Eco World Capital Berhad’s RM3.0 billion Sukuk Wakalah Programme and its AIS(cg) rating on Eco World Perpetual Capital Berhad’s RM2.0 billion Perpetual Sukuk Programme. The outlook on both ratings remains stable. Eco World Capital and Eco World Perpetual Capital are wholly owned funding vehicles of Eco World Development Group Berhad (EcoWorld). The Sukuk Wakalah Programme is guaranteed by EcoWorld, while the Perpetual Sukuk Programme carries a subordinated guarantee from the company. The two-notch rating differential reflects the Perpetual Sukuk’s subordination to EcoWorld’s senior unsecured obligations and the risk of profit deferral, in line with MARC Ratings’ methodology for subordinated and hybrid instruments.
EcoWorld’s established market position, strong sales track record and sizeable unbilled sales continue to underpin the ratings. These strengths are balanced against higher leverage following the consolidation of a former joint venture (JV) and execution risks related to new ventures aimed at growing recurring income.
EcoWorld’s development pipeline remains sizeable, with ongoing projects carrying a gross development value (GDV) of RM11.8 billion as at end-October 2025 (end-October 2024: RM10.3 billion). Strong sales execution, evidenced by average take-up rates of close to 90%, and unbilled sales of RM5.1 billion as at end-February 2026 continue to provide earnings visibility. The group further expanded its pipeline in March 2026 through a 50:50 JV with companies related to JLG Investment Holdings Sdn Bhd to undertake three developments with a combined GDV of approximately RM2.4 billion, comprising projects in Johor and Sydney, Australia.
EcoWorld is pursuing greater earnings diversification through recurring income streams, with management targeting a 20%–30% contribution to group earnings over the next three to five years. A key initiative under this strategy is the development of a data centre at Eco Business Park V, supported by a 20-year build-and-lease agreement with Pearl Computing Malaysia Sdn Bhd that is expected to generate annual rental income of approximately RM240 million. The project is partly funded through a RM1.88 billion unrated MTN programme, with RM225 million drawn as at end-June 2026. Following the restructuring of the asset-owning entity into an 80:20 JV in July 2026, the associated MTN will be deconsolidated from EcoWorld’s balance sheet. Execution risk is partly mitigated by the engagement of an experienced contractor, and the project is progressing in line with its targeted completion in 2H2027.
Revenue increased significantly to RM2.2 billion in 1HFY2026, supported by stronger land sales from EcoWorld’s industrial business parks. Total borrowings rose to RM3.9 billion following the consolidation of Paragon Pinnacle Sdn Bhd’s debt after the acquisition of the remaining 40% stake from the Employees Provident Fund. Nevertheless, leverage remained commensurate with the group’s expanded equity base, supported by warrant conversions and retained earnings. As at end-April 2026, the debt-to-equity (DE) ratio stood at 0.72x, after incorporating the RM800 million perpetual sukuk issued in August 2025, which receives 50% equity credit under MARC Ratings’ hybrid securities criteria. Net DE ratio remained low at 0.30x, supported by strong operating cash flow of about RM1.2 billion in 1HFY2026 and cash balances of approximately RM2.1 billion, excluding Housing Development Act balances.