Paramount to buy Sepang land for RM227.4m

-A +A

KUALA LUMPUR (Jan 2): Property developer Paramount Corp Bhd is buying 12  contiguous parcels of freehold land in Salak Tinggi, Sepang, Selangor from NCT United Development Sdn Bhd for RM227.38 million or RM22 per sq ft.

In a filing with Bursa Malaysia, Paramount said it has today signed a conditional sales and purchase agreement (SPA) with NCT for the proposed acquisition of land totalling 237.3 acres.

The land forms undeveloped portions of an on-going mixed development scheme known as Salak Perdana, that is currently being undertaken by NCT. 

Paramount said the SPA is conditional upon Paramount having obtained the approval of its shareholders for the proposed acquisition at an extraordinary general meeting to be convened, and having completed its due diligence in respect of the land. 

It added that the proposed acquisition will be funded by a combination of internal funds and bank borrowings.

In a separate statement, Paramount said the land has an estimated gross development value (GDV) of RM1.1 billion, which will bring the group's total GDV to RM9.1 billion.

“With improvements to transportation infrastructure, we can cast our nets further and wider for suitable land for development, and this parcel in Sepang District is one of them,” said its chief executive officer Jeffrey Chew.

Paramount expects the area surrounding the land to see a rise in population after the opening of Xiamen University Malaysia, while the Mitsui Outlet Park and the Kuala Lumpur International Outlet, which are commencing operations in 2015 and 2016 respectively, will also add value to the property market in the area.

“The proposed acquisition is not expected to have any material effect on the earnings per share of the group for the financial year ended Dec 31, 2014, as the proposed development of the land is expected to commence only in early 2016.

“Nevertheless, the development of the land is expected to enhance the earnings of the group in future years,” said Paramount.

The group expects the proposed acquisition to be completed within six months.

Paramount shares fell 6 sen or 3.9% to RM1.48 today, bringing its market capitalisation to RM624.95 million.