KUALA LUMPUR (Dec 22): Paramount Corp Bhd will construct four blocks of high rise residential buildings consisting of 1,600 units, including 20% affordable units, in Section 14 of Petaling Jaya with a projected gross development value (GDV) of RM1 billion.

In a filing to Bursa Malaysia today, Paramount said its wholly-owned subsidiary Aneka Sepakat Sdn Bhd has entered into a development rights agreement with Kumpulan Hartanah Selangor Bhd (KHSB) to develop the project.

Under the agreement, KHSB grants Aneka Sepakat the rights to the development of two contiguous parcels of leasehold commercial land measuring 9.66 acres.

KHSB, a unit of Kumpulan Darul Ehsan Bhd (the investment arm of the Selangor state government), is the beneficial owner of the land, located about 400 metres from the Asia Jaya LRT station.

Aneka Sepakat will take 84% or RM840 million of the RM1 billion projected GDV, while KHSB will be entitled to the remaining 16% or RM160 million.

The projected gross development costs (GDC) of the project at RM835 million is to be assumed entirely by Aneka Sepakat, with the expected profit of RM165 million to also be attributed entirely to the company.

Paramount said the projected GDC, which is inclusive of the development rights value of RM160 million, will be funded by a combination of internally generated funds and bank borrowings.

The exact mix of the funding will be decided at a later date, taking into consideration the gearing level of the group, interest costs as well as internal cash requirements for the group's business.

Paramount said the development is line with the group's asset light strategy to enlarge its land bank at prime locations, particularly at strategic transit oriented development locations in Petaling Jaya.

"With a projected GDV of RM1 billion, the proposed development will enable Paramount to further strengthen its current total GDV [for its projects] of RM8.6 billion," the group said.

Barring any unforeseen circumstances, the development rights agreement is expected to be completed by July 2027.

Paramount's share price closed up 1 sen or 0.57% today at RM1.77, for a market capitalisation of RM751 million. — theedgemarkets.com

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