Paramount Corporation to Unlock RM750 Million from Non-Core Assets, Strengthening Its Focus on Property
In a strategic move to enhance shareholder returns and sharpen its property development focus, Paramount Corporation Berhad (KL:PARAMON) is accelerating efforts to monetise RM750 million worth of non-core assets, including long-held education campuses, a hotel, and an office building.
According to Paramount’s Group CEO Jeffrey Chew Sun Teong, these assets currently account for nearly 25% of the company’s RM3.07 billion in total asset base, yet contribute little to no returns.
“There’s a lot of effort going into monetising the three campuses, the hotel, and the office,” Chew told analysts and media during a results briefing.
Legacy Campuses Up for Monetisation
The most substantial portion of these non-core assets comprises three education campuses located in the Klang Valley, Kedah, and Penang, collectively valued at approximately RM500 million.
These campuses have remained under Paramount’s ownership despite the sale of its education business to Two Horses Capital Sdn Bhd (THC) in 2019 for RM540.5 million. Under the deal, Paramount agreed to a seven-year subsidised rental arrangement that ends in July 2025.
“We’re collecting rental at less than 2% yield while paying about RM14 million in annual interest on the campuses’ loan,” Chew noted. “That’s a negative return on equity.”
According to the company’s latest annual report:
- Utropolis Glenmarie Campus carries a net book value (NBV) of RM188.15 million
- Utropolis Batu Kawan Campus is valued at RM97.67 million
Monetising these assets — either through disposals or leasing at market rates — would significantly improve Paramount’s overall Return on Equity (ROE), which stood at 6.9% for FY2024, translating to a net profit of RM102.45 million against RM1.48 billion in shareholder equity.
Hospitality and Office Assets Also in Focus
Besides the education campuses, Paramount is also looking to unlock value from:
- Mercure KL Glenmarie Hotel (NBV: RM88.64 million)
- Ashwood ATWATER Office in Petaling Jaya (NBV: RM125.43 million)
These assets, while valuable, fall outside the company’s core real estate development strategy. Chew noted that selling or repurposing these properties would free up capital for higher-yielding developments, particularly residential and mixed-use townships.
Why This Matters to Property Investors
Paramount’s aggressive stance on monetising underutilised assets highlights a broader strategic shift seen across the Malaysian property development sector. With borrowings under scrutiny and investor focus on ROE, developers are increasingly streamlining operations and unlocking capital tied to low-performing assets.
In Paramount’s case, the potential disposal of RM750 million worth of properties could not only:
- Reduce gearing
- Improve net income margins
- Free up cash for land banking and strategic launches
…but also improve market sentiment toward its stock, particularly among investors tracking earnings visibility and capital efficiency.
What’s Next for Paramount?
With a remaining GDV of RM5.5 billion across 369.4 acres of undeveloped land and unsold inventory, Paramount aims to achieve RM1.2 billion in revenue in FY2025.
However, Chew stated that this leaves the group with about four years’ worth of pipeline, hence the company is actively scouting RM400 million worth of landbank to sustain its launch targets over the next five years.
Meanwhile, whether the campuses are sold outright or leased at full-market rate, stakeholders can expect to see improvements in asset utilisation and financial ratios, making Paramount a more lean, focused, and profitable property player moving forward.
