Paramount Corp Bhd is exploring real estate investment trust (REIT) as an option to sell its education assets which is in line with company’s asset-light strategy.
“We do not have any plans to form our own REIT but looking for other REITs companies to sell our assets,” group CEO Jeffrey Chew Sun Teong told reports after unveiling its new RM260 million KDU University College at Glenmarie, Shah Alam yesterday.
He said capital raise from the divestment exercise will be used for future development which include plans to build similar concept as KDU University College in Batu Kawan, Penang.
Paramount has allocated RM200 million to build the new campus which include land purchase and construction of the facilities.
“The development of the new campus would mirror Utropolis Glenmarie and we expect to launch sometime between 2018 and 2019,” Chew said.
Paramount signed a deal with Penang Development Corp in 2014 to acquire 30 acres of freehold land in Batu Kawan, Penang.
10 acres have been set aside to develop Penang’s first university metropolis anchored by a new purpose-built campus for KDU Penang, he said.
KDU Penang is working towards obtaining university college status and the new campus, which will open its door in 2018-2019, will help cement Paramount Education’s strong footprint in northern Malaysia, Chew said.
He said education revenue forms 30% of Paramount Corp’s group revenue while 70% from property segment.
“We will stay at 30% (education revenue). We are quite comfortable with level.
Education is a great business to be in. It complements with the property business,” he added.
The RM260 million KDU University College at Glenmarie located within the 21.7 acre Paramount Utropolis development have nine fully equipped lecture halls, 60 classrooms, a multi-purpose hall, a 50,000 sq feet library with learning pods and a coffee bar as well as a 580-bed student village.
As for Paramount’s property segment, Chew said the company’s landbank size is 1,000 acres with a combined gross development value (GDV) worth between RM9 billion and RM10 billion.
He said its lands are located within Klang Valley, Sg Petani in Kedah and Batu Kawan and Bukit Mertajam in Penang.