Diversity is paramount

PARAMOUNT Corp Bhd is in no hurry to grow its profits and landbank aggressively, given that the property market is currently subdued.

That said, group chief executive officer Jeffrey Chew Sun Teong believes the current situation is only temporary, given that demand has been tempered by global issues such as increased US tariffs, and locally, the implementation of the sales and service tax.

“This year, the property ­sector is taking a bit of a backseat, the sentiment is a little weaker. In fact, based on data from the National Property Information Centre, the most recent figures released were actually the worst in the last six quarters,” he tells StarBiz 7 in an interview.

Nevertheless, the property developer still has a goal to grow profits at a steady 10% annually.

Paramount saw its net profit increase 52.6% on a year-on-year basis to RM25.02mil in the third quarter ended Sept 30, 2025 (3Q25), mainly due to the redemption of remaining outstanding perpetual securities.

Its biggest income contributor – property development – recorded a lower revenue of RM229.8mil, compared to the RM260.1mil recorded in the same period a year earlier.

Its Atera development in Selangor, Utropolis Batu Kawan in Penang and Bukit Banyan in Kedah were the top three contributors to this segment for the quarter.

“Generally, we don’t look at things on a short-term basis, when we buy land, it takes us two years to launch and another five years to fully complete a development, so we are long term,” Chew says.

The group’s current remaining undeveloped land stands at 358 acres, with gross development value (GDV) potential of more than RM5bil.

The plan is to drive this up to RM12bil in the next five years, keeping it at an “optimum” level, Chew says.

“We don’t want to grow too fast as we feel that it will compress the margins too much.”

Paramount’s core markets are in the Klang Valley, Penang and Kedah.

In August, the company said it was acquiring four parcels of freehold land totalling 295.55 acres in Bandar Lunas, Kulim, Kedah to replenish its landbank in areas with “strong growth potential and where it already has a strong presence”.

A month earlier, it said it had bought a piece of freehold land in Penang from Penang Development Corp for RM57.84mil, which will be for a new mixed development with an estimated GDV of RM744mil.

Chew says that over the next five years, the property developer plans to derive up to 30% of its overall profits from its other businesses which it has been growing – like co-working space and hospitality businesses.

The group’s Co-labs Coworking started with 3,700 sq ft in 2016 and now has 185,000 sq ft of space across eight locations in Petaling Jaya, Shah Alam and Kuala Lumpur.

“Demand for co-working space is growing and coming from smaller outfits like law firms, and entrepreneurs who set up small businesses, the rent is higher than what normal offices charge.”

Co-working space gives flexibility to businesses, you can start up your operations very quickly and you don’t have to take on a very long-term perspective (when it comes to renting), unlike if one rents office buildings, Chew adds.

“Our ambition is to become top three in Malaysia. We are now among the top five.”

In its most recent quarter, this segment recorded a revenue of RM5.2mil, marginally less than the revenue of RM5.6mil a year ago, primarily due to the lower design-and-build revenue from Scalable Malaysia, the one-stop workspace solutions provider which it owns.

Paramount also owns and operates the Michelin-starred Dewakan restaurant and French restaurant Bidou, the new kid on the block.

Additionally, it has a 28% stake in Singapore-listed Envictus International Holdings Ltd, which operates Texas Chicken and the San Francisco Coffee cafes in Malaysia.

The stake was bought from JAG Capital, which is majority-owned by Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani.

Sustainable shareholder returns

Chew says Paramount, which completed the sale of its education business in 2022 for RM660.5mil, has managed to plough this amount back into growing its other businesses and rewarding its shareholders.

The company had been one of the pioneers of private education in the country, setting up Kolej Damansara Utama (KDU) back in 1983 and KDU College Penang in 1991.

In 2003, the group opened the Sri KDU primary and secondary schools and later acquired the R.E.A.L Education Group in 2017 which included R.E.A.L Schools and early childhood education under R.E.A.L Kids.

“We are committed to continuously giving out healthy returns so our shareholders can enjoy more value from every ringgit that they invest in us.”

He says over the last five years, the company has delivered a 13% return to its shareholders on a cash-on-cash basis, meaning 13 sen profit for every RM1 invested.

“Going forward, we want to maintain at least 10% generated from property, our new businesses and some divestment of our assets,” he says.

Among its assets are the 229-key 4-star hotel Mercure Kuala Lumpur Glenmarie and university campuses in Shah Alam and Penang.

In its most recent financial results, Paramount said its investment and others segment recorded a revenue of RM9mil, a 9% increase from the RM8.3mil in 3Q24, driven by all three business units – Dewakan, the Mercure Kuala Lumpur Glenmarie hotel, and its education investment properties.

Supported by the higher ­revenue and the absence of impairment losses that were ­recognised in the previous year on tertiary education associates, the segment’s loss before tax narrowed significantly to RM1.9mil, compared to RM8mil in 3Q24.

Meanwhile, Chew, who turns 60 next year, says that he will be staying on at Paramount for at least a couple more years to ensure a proper handover of duties.

A succession plan is already in the works, he adds.

At last look, Paramount shares were at RM1.04 apiece, valuing the entire group at RM648mil.