Paramount Corp Bhd is looking to leverage on its property development expertise to build up a stronger presence in the Klang Valley and Kedah property markets. The award-winning Bandar Laguna Merbok in Sungei Petani, and the fast-selling Kemuning Utama in Shah Alam, are setting new industry benchmarks in township design planning and affordably priced homes in line with the tagline of Lifestyle, Quality and Value. StarBiz assistant news editor ANGIE NG caught up with Paramount group managing director and group chief executive officer Datuk Teo Chiang Quan, who shares his plans on the group.
PARAMOUNT Corp Bhd expects to grow into a stronger property development group with more landmark projects in the rapidly growing Klang Valley and Sungei Petani markets.
The group is looking to acquire additional land bank in these areas to continue its foray into property development and improve its bottom line.
Besides property development, Paramount is also a provider of education services through its stable of educational institutions, including KDU College, KDU International Language Training Schools, Sekolah Sri KDU and KDU Management Development Centre.
The rising competition in the education sector has resulted in the division turning in bigger losses of RM5.9mil for the financial year ended Dec 31, 2004, compared with a loss of RM1mil the year before.
In the first quarter ended March 31, the education division continued to be in the red, with a pre-tax loss of RM1.4mil.
According to Paramount group managing director and group chief executive officer Datuk Teo Chiang Quan, property will continue to be a major contributor to the group, with an 80% share of group earnings.
“Our plan is to leverage on our overwhelming success in Kemuning Utama in the Klang Valley, and Bandar Laguna Merbok in Sungei Petani. We also plan to venture into more well-planned developments in other well sought-after addresses in these two markets,” he told StarBiz in an interview.
The robust sales recorded for Kemuning Utama have set the tone for the group to build up a stronger market presence, and brand image that will move it up the property industry ranks.
Since the project’s launch in October last year, sales of more than RM600mil have been achieved from the RM1.3bil development. The last launch of 245 homes on April 15 attracted a five-day queue of buyers.
“We have a very high calibre team with the expertise of adding value to our land bank and turning it into a well-built environment like what we have achieved in Bandar Laguna Merbok and Kemuning Utama,” Teo said.
However, he said, Paramount did not have any immediate plans to venture into other markets as it had intended to tap the two markets it knew best.
“In expanding our property horizon, we will be prudent and realistic by making strategic land purchases within our means. We do not want to overstretch our resources. There is also the option to go for joint ventures with land owners,” Teo said.
He said that among the most important tenets of a property developer was to build a good reputation as a reliable and quality builder.
Keeping customers satisfied is another important success factor, and to achieve that, Paramount will go the extra mile to satisfy the customers.
“We have to keep up with the trends of building quality homes within well-planned environments. The design must be attractive to a wide section of the market, including the upgraders and younger market segments,” he said.
Having started out its property ventures in Sungei Petani way back in the 1980s, Paramount naturally wants to expand its horizon in this northern Kedah city, and contribute to the area’s growth by building more well-planned projects.
“It is important to build projects in the right location as address has become an important consideration among home buyers. Offering the right products certainly helps to improve the project’s attraction,” Paramount Development Sdn Bhd managing director Ong Keng Siew said.
Paramount’s 493-acre Bandar Laguna Merbok in Sungei Petani was named the winner of Fiabci Malaysia’s Award of Distinction 2004 for Best Residential Development, the first developer in northern Peninsular Malaysia to clinch the award.
Teo said Bandar Laguna Merbok’s pioneering and environmental friendly master plan incorporated many of the concepts that were later fine-tuned and expanded in Kemuning Utama.
Developed by Paramount Property Development (Utara) Sdn Bhd, Bandar Laguna Merbok is Kedah’s first gated and guarded community, with 4,031 housing units sprawled over 493 acres.
Since 1994, 60% of the 493 acres have been developed, and 2,476 property units worth RM430mil were sold as at Dec 31, 2004.
Another 395 units worth RM67mil are planned for launch this year, while the remaining 985 units with sales value of RM167mil will be released over the next three to five years.
The development, dubbed “the Taman Tun Dr Ismail of Sungei Petani”, is considered the trendsetter and price leader in this town. The developer expects to sell 300 units valued at more than RM60mil a year in Bandar Laguna Merbok.
Paramount has two other developments in Sungei Petani: Taman Patani Jaya and Taman Sutera.
Analysts expect Paramount to improve on group net earnings, from RM23.6mil registered last year to RM47.8mil, and RM52.7mil for the financial years ending Dec 31, 2005 and 2006, respectively.
Standard and Poor’s in a research note said it expected Kemuning Utama to be the key contributor to the company's bottom line over the next few years.
Of the RM453mil gross development value already sold as at Dec 31, 2004, only RM85mil have been billed, and the remaining billings will underpin 2005-2006 earnings.