Paramount ready to expand overseas

By Tan Xue Ying

KUALA LUMPUR (May 30): Paramount Corp Bhd is currently in talks with potential partners to venture into housing markets abroad in the next five years.

Paramount group chief executive officer Jeffrey Chew (pic) said his team is currently studying the residential property markets in Thailand, Vietnam, Australia and the Philippines, and aims to pursue one or two of these markets under its next five-year plan starting 2020.

“We do see the Malaysian property market in major urban centres getting fairly mature. So rightly said, the next step is to really look at potentially going out of the country … I think we are ready to go,” Chew told reporters after the group’s annual general meeting yesterday.

“We are conducting market research on a couple of cities, visiting the sites, learning about the markets, and talking to potential partners as well,” he said, adding that Paramount will likely collaborate with joint venture partners in line with the group’s asset-light business strategy.

Paramount is eyeing to achieve up to 30% sales contribution from its overseas property segment under its five-year plan, he said, under which the group plans to evolve its businesses via digitisation and overseas ventures. The group invests about RM10 million to RM20 million in digitisation annually.

“We are watching very closely how the Fourth Industrial Revolution affects our businesses, both education and property.

“For the next five years, while we are going out of the country (expanding beyond Malaysia), we are also moving in terms of the digital journey. I won’t say we are out of education, but we are moving our business towards more digitisation.”

He said the group is well-positioned and is keen to expand its K-12 education segment — comprising kindergarten, primary, and secondary education — regionally or globally, if there are opportunities for strategic partnerships.

As for its tertiary education segment, Chew said the group, having invested in open-learning recently, hopes it will ultimately be part of the digital platform that delivers tertiary or lifelong education certifications.

He noted that the tertiary education segment has accumulated RM73 million in losses to-date, mainly due to dwindling population and increased emigration, amid fierce competition due to excess market capacity.

On that note, Chew hopes the government will look at more public-private collaborations whereby existing private capacities can be used, instead of building new public universities, to meet demand for public tertiary courses such as the Malaysian matriculation programme.

Two more co-working centres in the pipeline

To ride the growth of the sharing economy, Chew said Paramount aims to launch two more co-working centres this year, which will cost it between RM2 million and RM4 million each. It has two such centres now.

“Co-working space could be a new business on its own. It is also a secondary defensive strategy against potential property offices that cannot be sold,” he said.

Maintaining FY19 sales target at RM1b

Despite challenges of a softer property market, Chew said Paramount is maintaining its RM1 billion sales target set for the financial year 2019 (FY19) ending Dec 31, 2019 as the group still has RM891 million worth of launches lined up for the remainder of the year.

The group anticipates the return of firmer demand from the second half of this year, when some of the unsold inventories in the market are absorbed.

“We did not have strong sales in 1QFY19 (first quarter of FY19) because the market was slow and we have not really launched many projects since 4QFY18.

“It is getting challenging but we still think that with the launches that are piling up, and as the economy starting to gain traction and confidence [from] the business community and foreign interests, we probably have a chance. We haven’t given up on the RM1 billion [target].”

Paramount’s remaining indicative launches this year include Bukit Banyan in Sg Petani, Kedah (RM153 million), Utropolis Batu Kawan in Penang (RM243 million), Greenwoods, Salak Perdana in Sepang (RM136 million), the remaining phases of Berkeley Uptown in Klang (RM114 million), Lakeside in Cyberjaya (RM132 million), as well as its SelangorKu affordable homes in Kemuning Utama (RM113 million).


As published: