Source: The Edge
Construction firm Landasan Kapital Sdn Bhd, through its 90%-owned unit Paramount Blossom Sdn Bhd, has teamed up with two Chinese firms to jointly develop a mixed development in Seremban 2, Negeri Sembilan, with an estimated gross development value of RM650 million. The proposed project will be built on two plot of lands, measuring a combined 77 acres (31ha).
“The proposed development will feature 835 residential units, comprising bungalows, semi-detached houses, shop offices and retail units,” Paramount Blossom special project director Datuk Jaafar Abu Hassan told reporters after the signing of a partnership agreement between the company and Fujian Hexinyuantong Investment Co Ltd and China Railway Liuyuan Group Co Ltd (CRL), a wholly-owned subsidiary of China Railway Group Ltd (CREC), yesterday.
“The land was bought by Paramount Blossom three years ago and the layout is being approved by the authorities. Formerly a golf course, the land is currently being used by Zenith International School on a month-to-month contract basis. We have given them notice to vacate,” he said.
Jaafar added that the residential units will be priced to target first-time homebuyers and the project will be divided into three phases. He expects the proposed project to take five or six years to complete, but it will ultimately depend on sales.
“The market is [currently] quite soft,” heconceded.
Jaafar said the commencement date of the construction had not been fixed, but expects to launch the first phase of the proposed project by end-May or early June this year.
Under the partnership, Paramount Blossom will be the project owner, while CRL will act as the main contractor for engineering, procurement and construction activities. Fujian Hexinyuantong will provide a financing facility of up to RM650 million to the proposed project.
Fujian Hexinyuantong chairman Wang Jin said it has had a working relationship with Paramount Blossom for more than 10 years.
“As this is the first time we are doing a project in Malaysia, having a Malaysian counterpart is essential,” Wang told The Edge Financial Daily. This marks the two Chinese firms’ foray into the Malaysian property market. However, CRL’s parent CREC, in a joint venture (JV)with Iskandar Waterfront Holdings Sdn Bhd, bought a 60% stake in Bandar Malaysia Bhd last year.
“The proposed project will help us develop a framework for future partnerships with Malaysian companies,” said Wang.
He said political stability and relationship with local companies are deciding factors for his firm’s venture into Malaysia. “We see good prospects for this country.”
A check with the Companies Commission of Malaysia (SSM) website revealed that Landasan Kapital is 82.41% owned by its managing director Mohd Raimi Jusoh. Landasan Kapital, in a JV with Zelan Bhd, was involved in the construction of the integrated transport terminal in Gombak, Selangor. The SSM data showed the company had recorded profit growth every year since the financial year ended Dec 31, 2010 (FY10).
For FY14, the group’s net profit more than doubled to RM4.62 million from RM1.94 million in FY13. Revenue grew 101.1% to RM232.63 million from RM115.66 million in FY13.
Meanwhile, Paramount Blossom posted a net profit of RM16.35 million in FY14, but slipped back into the red in FY15 with a net loss of RM825 on the back of RM420,000 in revenue.