PETALING JAYA: Paramount Corp Bhd is proposing to acquire two contiguous pieces of freehold land measuring 4.542 acres in Kuala Lumpur for RM243.8mil.
The property developer said its wholly-owned subsidiary Paramount Property (Cityview) Sdn Bhd (PPCV) had entered into sale and purchase agreements with two subsidiaries of Wing Tai Holdings Ltd for the acquisition of the two pieces of land.
“The proposed acquisition is in line with Paramount’s strategy of replenishing its land bank at strategic locations with strong growth potential and to scale up its property development activities to generate long-term sustainable income.
“The proposed acquisition will also enable Paramount to enhance its property development profile at a prime location in Kuala Lumpur, ” it said in a filing with Bursa Malaysia.
Paramount said the acquisition would be funded by a combination of internally generated funds and bank borrowings, the exact mix of which would be decided at a later date taking into consideration the group’s gearing level, interest costs as well as internal cash requirements for the group’s business operations.
With its close proximity of about 2.5km to KLCC and its mature as well as prestigious neighbourhood, Paramount said PPCV intended to re-develop both pieces of land into a premium high-rise residential development consisting of about 650 units of condominiums.
“With a projected gross development value (GDV) of RM863mil to be generated from the proposed development over a period of five years, the proposed acquisition will further strengthen the group’s current total expected GDV of RM6.8bil to RM7.7bil and contribute positively to its future earnings.
“The total gross development cost, however, could not be determined at this juncture pending finalisation of the detailed redevelopment plan for the property. As such, it is too preliminary to ascertain the expected profits to be derived from the proposed development.”
Another unique feature of the land, said Paramount, is that the market price of condominiums and serviced apartments in the area is observed to be about 30% to 40% lower than those within KLCC.
“Hence, this substantial difference in pricing, coupled with the serene surroundings of the U-Thant enclave and easy access to the site, whether on road or by rail, could render the proposed development as an attractive address for a premium residential property in KL city and as an alternative to those that are situated within KLCC.”