PETALING JAYA: Property developer Paragon Globe Bhd continues to attract enquiries from multinational manufacturers, logistics firms and regional suppliers, particularly about industrial developments in hotspots such as Desa Cemerlang and Pekan Nanas, as demand rises alongside the Johor-Singapore Special Economic Zone (JS-SEZ) initiative and the growth of data centre-related activity.
These are usually structured as design-and-build industrial facilities, intended either for sale or for long-term occupancy, rather than speculative projects.
Chairman Datuk Seri Edwin Tan Pei Seng said from the government perspective, the Johor-based property developer’s engagement is mainly indirect rather than tender-driven.
He said infrastructure upgrades and industrial enablement initiatives in Johor create downstream demand for factories, worker accommodations and commercial support facilities.
“Our strategy is to prioritise developments that align with these infrastructure rollouts, allowing us to deploy capital where we have greater control over land value and project execution.
“While our primary focus remains on high-visibility private sector demand, we remain open to participating in government tenders where the risk-return profile aligns with our investment criteria,“ he told SunBiz.
When asked in what ways the JS-SEZ and regional supply chain shifts will boost demand for Paragon Globe’s industrial developments in the coming years, Tan said the JS-SEZ strengthens Johor’s role as a manufacturing and logistics extension of Singapore, where land, labour and utilities remain constrained.
“As companies regionalise supply chains and rebalance production closer to end markets, demand shifts towards ready industrial locations with connectivity, utilities, and execution certainty.
“This directly supports demand in established corridors such as Desa Cemerlang and Pekan Nanas, where we already have infrastructure and a track record.
“For Paragon Globe, the benefit is practical rather than speculative. We are seeing enquiries focused on design-and-build factories, worker accommodations and supporting commercial uses tied to manufacturing expansion, not just land holdings.
“Combined with the RTS Link timeline and JS-SEZ facilitation mechanisms, this environment improves decision speed for occupiers, which shortens sales cycles and enhances visibility for our industrial developments over the next year,“ Tan said.
Elaborating on potential policy shifts, like potential changes in foreign investment rules or property taxes, Tan said such risks are inherent in property development, particularly around foreign investment rules, stamp duties and real property gains tax, which can affect transaction timing and buyer sentiment.
“In the industrial sector, changes to incentives, utility costs, or environmental rules could affect the choices of businesses, while in the housing market, stricter lending or ownership rules might slow down sales, especially for more expensive homes.
“Our approach is to avoid dependence on any single policy lever. We focus on projects driven by real occupancy demand rather than incentives alone, and we diversify across industrial, residential, and recurring income assets to reduce exposure to sudden rule changes.
“By maintaining close engagement with state agencies and aligning developments with long-term economic priorities, we aim to manage regulatory risk through positioning rather than reaction,“ Tan explained.
Touching on fluctuating prices of construction raw materials, such as steel and cement, that impact project margins, Tan said raw material price volatility is a structural issue for the construction and property sector, and the group factors this into its pricing and project planning upfront.
“Steel, cement and finishing materials can materially affect margins if not managed carefully, particularly for longer-cycle projects.
“Our mitigation starts at the design stage – standardising specifications where possible, value-engineering layouts, and sequencing construction so that procurement aligns closely with actual build progress rather than being locked in too early.
“Operationally, our design-and-build model provides flexibility that traditional fixed-price contracting does not. For industrial projects, pricing structures often allow for cost pass-through mechanisms or built-in contingencies.
“We also work with a core group of suppliers and subcontractors, securing volume-based pricing and maintaining alternative sourcing options to reduce dependency risk.
“While we do not engage in financial hedges for materials, disciplined procurement, phased construction and conservative margin assumptions are central to how we protect project economics in 2026,“ he said.
In reply to a question, Tan said Paragon Globe will prioritise earnings quality and execution discipline in 2026, rather than chase headline growth.
Financially, he said, the focus is on maintaining profitability while improving cash conversion as the group moves from one-off land monetisation to a more balanced mix of industrial sales, progressive billings and recurring income.
“Operationally, we are focused on completing and delivering what is already in hand – particularly industrial projects in Pekan Nanas and Desa Cemerlang – while managing gearing prudently and preserving balance sheet flexibility.”
“At the same time, Johor’s industrial momentum gives us confidence in the underlying demand environment. Our targets are therefore practical: convert confirmed industrial demand into completed developments, bring the remaining Desa 27 by PGB plots into execution, and ensure the first full-year contribution from our recurring-income assets is stabilised.
“We are not setting aggressive expansion targets for their own sake. The emphasis is on steady execution, margin discipline, and risk management so that growth in 2026 is sustainable rather than cyclical.”
Tan said landbank optimisation is equally important, and the group continuously assesses whether land should be developed, held or partially monetised depending on market conditions and capital needs.
“This flexibility allows us to fund growth, manage gearing and deploy capital to projects with the best risk-adjusted returns, positioning Paragon Globe to benefit from Johor’s growth cycle without overextending the balance sheet.”
The Sun Malaysia
