KUALA LUMPUR: Paramount Corp Bhd is going on a land acquisition spree in the Klang Valley following its sale of a 20% stake in Jerneh Insurance Bhd for RM130.8mil.
The company is expanding its land bank as it is positive on the Government's plan for greater Kuala Lumpur under the Economic Transformation Programme (ETP).
»Land is getting scarce, hence the new pieces of land we are looking to buy will be smaller. So we will have to build high-rise homes« ONG KENG SIEW
Land is getting scarce, hence the new pieces of land we are looking to buy will be smaller. So we will have to build high-rise homes, managing director Ong Keng Siew told Starbiz after Paramount EGM.
At the EGM, shareholders unanimously approved the sale of Jerneh to Ace Ina International Holdings Ltd.
Of the proceeds, Paramount plans to use RM36.19mil to pay a special dividend of 40 sen per share, which will be given within three months after completion of the disposal.
After minusing the estimated expenses for the proposed disposal, the remaining RM90.31mil will be used to buy land in the Klang Valley for property development purposes.
Executive deputy chairman Datuk Teo Chiang Quan said the company would also use some of its cash for land acquisition purposes.
Paramount has RM235.47mil cash as at Sept 30 versus RM50.59mil in borrowings.
Teo is positive on the outlook of the property sector, especially if infrastructure plans under the ETP are properly carried out.
If the authorities are determined to make Kuala Lumpur a world-class city and implement the mass rail transport system and high-speed bullet train, this will be very good for the country.
Imagine if there is a bullet train linking Kuala Lumpur and Singapore, where properties are 10 times more expensive than ours. With good accessibility, properties in KL will be greatly enhanced, Teo said.
He added that there was pent up demand for good properties in Kuala Lumpur now.
He cited an example where last month, 125 Paramount homes in Kemuning Utama, Shah Alam, with prices starting from RM520,000 were snapped up within two hours.
Property upgraders are looking for more sophisticated homes that are gated and guarded. That is why you see prices for such homes holding very steady, said Teo.
Earlier in the week, Paramount announced its third-quarter results to Sept 30 which saw its revenue dropped 11.93% to RM98.29mil while net profit rose 32.65% to RM21.59mil.
For the nine-month period, revenue increased 9.64% to RM329.34mil while net profit improved by 45.89% to RM63mil.
The higher net profit was attributed to the overwhelming response to its property launches and better progressive billings.
Teo said Paramount was now setting up an international school using British syllabus in Kota Damansara.
The school is scheduled to open in September 2011 and will have 600 students.
We already have 400 students registered for this curriculum. We will also offer Baccalaureate Diploma Programme for students in year 12 and 13, said Teo.
Meanwhile, Ong said a new KDU College campus would be constructed in Glenmarie.
Paramount plans to launch a 200ha mixed-development project, Banyan Hills, in Sg Petani, Kedah, by the first quarter of 2011.
The company has also bought a 20ha freehold land in Cyberjaya for RM78.4mil from Cyberview Sdn Bhd.
It plans a mixed and mid-upper to high-class guarded residential properties and high-rise condominium with a gross development value of RM530mil there.
By The Star
