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Monday, October 22, 2007

Paramount buys land for RM203m commercial job

By New Straits Times

DIVERSIFIED Paramount Corp Bhd will spend some RM43 million to buy an industrial site in the Klang Valley to accommodate its RM203 million commercial property job.

The 21,050 sq m leasehold tract is in Section 13, Petaling Jaya. Paramount will buy the site, fronting Jalan Universiti, from Rangkaian Cipta Sdn Bhd.

It plans to build commercial units like offices and showrooms on the site, currently occupied by 40-year-old buildings which are fully tenanted.

"The land acquisition is in line with Paramount's objective to replenish its landbank to generate long-term sustainable income," it told Bursa Malaysia last Friday.

Paramount will use internal funds and bank loans to finance the purchase.

Acquisition of the land is due to be completed in four months. The properties will be developed within four years from 2009.

The project will be partially leased out. But if it is entirely sold, Paramount expects to book about RM44 million in profits.

Existing buildings on the tract have lettable areas of 126,900 sq ft, and close to RM2.2 million is generated in yearly rentals, according to the developer.

Paramount's net profit in the first half to June 2007 dipped 30 per cent to RM17.9 million, or 17 sen a share, while revenue dropped 35 per cent to RM137.8 million.

The decline was due to lower earnings by its property unit, according to filings to the bourse by the company.

Real estate development constituted the largest portion, or 55 per cent, of its first half revenue.

The group had RM27.3 million debts as at June this year.

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