Paramount, Mitsui Fudosan in RM1.34b Jalan Ampang JV

Paramount Corporation Bhd has signed a joint venture with Mitsui Fudosan (Asia) Malaysia Sdn Bhd to develop The Ashbourne, a serviced apartment project off Jalan Ampang in Kuala Lumpur with an estimated gross development value (GDV) of RM1.34b. Under agreements signed on 4 November, the Japanese developer will buy 49% of Meridian Kuasa Sdn Bhd, the Paramount subsidiary that owns the land, for RM23.06m in cash. Paramount keeps 51%. It is Mitsui Fudosan's first deal with Paramount.

The project

• Size: one podium and two towers with about 458 serviced apartments of 1,491 to 2,661 sq ft.
• Price: about RM1,350 psf on average, net. Group CEO Jeffrey Chew said this is higher than Paramount's earlier launches because materials, construction and land cost more.
• Timing: work is to start in the fourth quarter of 2026 and finish in the fourth quarter of 2030.
• Who runs it: Paramount Property Development Sdn Bhd handles project management, sales and marketing.

In March, Paramount put the project's GDV at RM1.1b. The site is about 0.9 km from its The Ashwood and The Atrium, both fully sold.

The land

Paramount bought the site from IOI Properties Bhd for RM257,888,218 under an agreement signed on 18 March, and completed the purchase on 16 June. That works out to about RM1,600 psf of land, or about RM563,000 per apartment, roughly 19% of the GDV.

• Title: Geran 80494, Lot 20009, Seksyen 89A, Bandar Kuala Lumpur, freehold, land use category "Bangunan".
• Size: 14,974 sq m (161,179 sq ft, or 3.70 acres), vacant, flat and rectangular.
• Use allowed: an express condition on the title allows commercial buildings for serviced apartments only.
• Neighbours: ALTY Orthopaedic Hospital in Menara ALTY on Jalan Ampang to the north, Desa Angkasa Condominium to the south, 183 Ampang Condominium and the Skyline Embassy project to the west, and Dedaun Residence to the east. KLCC is about 2 km to the west.
• Value: Henry Butcher Malaysia valued it at RM258m.

IOI had already obtained a development order for two blocks of serviced apartments, which Paramount said would let it launch quickly.

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How the joint venture works

• The land does not change hands again. The title stays with Meridian Kuasa; Mitsui Fudosan buys shares in that company.
• The price is based on net assets, not land value. RM23.06m is 49% of Meridian Kuasa's adjusted net assets of about RM47.05m at 31 August, after its liabilities. The land is charged to Public Investment Bank.
• Each partner funds its share. Paramount must meet 51% of the company's funding needs and keep its existing bank facilities in place.
• The board is split 3–2. Paramount appoints three of the five directors.
• There is a lock-in. Neither side may sell its shares until the project is finished and every unit sold, or for six years, whichever comes first. After that, the other partner gets the first offer. If Paramount sells out, Mitsui Fudosan can ask the buyer to take its shares too.
• There is a condition. The share sale closes only after the amended development order and amended building plan are issued to Meridian Kuasa. Paramount expects it to close by 31 December.

What Paramount gets

Paramount expects a pro forma gain of RM43.87m, including about RM24m from revaluing the 51% it keeps. Of the cash, RM19.75m goes to working capital and the rest pays capital gains tax and costs.

Chew said the partner should help Paramount reach foreign buyers. At its last project, foreign buyers took around 60% to 70% of sales, "but that was before the war," he said. He wants buyers from North Asia and possibly Europe, and said the unsold-homes overhang "tends to be in a different segment."

Cover photo: Paramount Corp, via EdgeProp.