Paramount Property's Berkeley Uptown development in Klang. Image source: www.paramountproperty.my
Paramount Corporation Bhd is planning on RM1.2 billion worth of property launches in the year 2020, while maintaining its sales target of RM1 billion.
According to the CEO of Paramount Corporation Jeffrey Chew, sales in 2020 is expected to be driven by the formation of new households and home upgraders. He stated that the rate of growth for the formation of new households from 2011 to 2020 is estimated to be at 2.9%, which will be a driver for demand of new housing.
The developer’s new launches in 2020 is to comprise mainly of residential developments, including Sejati Lakeside in Cyberjaya, landed properties in Bukit Banyan, Sungai Petani, and Greenwoods in Salak Tinggi. These projects are to carry a gross development value (GDV) of RM178 million, RM121 million, and RM139 million respectively.
Launches of new high rise developments include Berkeley Uptown in Klang and Utropolis Batu Kawan in Penang which will carry a GDV of RM247 million and RM269 million respectively. It was also noted that the pricing of the new launches will be between RM450 to RM500 per sf, marking the properties at between RM300,000 and RM600,000 per unit.
Paramount reported a 73% take-up rate for the financial year ended 31 December 2019 (FY2019), translating to RM858 million. The take-up rate is inclusive of their project in Berkeley Uptown, Klang, Sejati Lakeside in Cyberjaya, and Kemuning Idaman in Selangor.
Their sales, on the other hand, experienced a shortfall from their RM1 billion target, at RM692 million. The shortfall is attributed to challenging market conditions, and the postponement of the launch of a couple of their new projects.
As of end-2019, Paramount has approximately 157 unsold units which totals about RM105 million, of which 136 units comprise commercial units that total RM91 million. This amount has contributed about RM60 million to their unsold stocks, making it a total of RM80 million in comparison to RM20 million in 2018.
Said Chew, "The market for commercial property has been very tough due to the emergence of e-commerce and other factors which are changing the business landscape.”
Due to the above factors, sales of Paramount’s commercial properties have been affected, particularly their two blocks of office towers in Atwater development which were planned to have been sold en-bloc, but have remained unsold to-date.
Despite the challenging conditions, Paramount is still looking at a strong and steady growth plan over the next 5 years. They aim to achieve a 10% growth annually and a sales target of RM1.4 or RM1.5 billion by 2024.
(6 March 2020)
