Back to the drawing board for RM3.6b The Paragon@KL Northgate

PETALING JAYA: KL Northgate Sdn Bhd continues to see delays in its planned RM3.6 billion gross development project in Gombak – The Paragon@KL Northgate – amid the oversupply situation in the property market.
Anzo Holdings Bhd, which was supposed to bid for the project together with MCC Overseas (M) Sdn Bhd by last month, told Bursa Malaysia that KL Northgate had decided to review the whole development concept and development components of The Paragon@KL Northgate in view of the current real estate glut and the imbalance in the supply-demand conditions.
“Anzo Construction Sdn Bhd (ACSB) was further informed that the whole process will take at least another six to nine months before the bidding and tendering exercise can be carried out.”
Anzo said it is only able to submit the tender documents upon KL Northgate finalising the contract document and pricing for the project, estimated by October 2018, given that the progress of the project is solely dependent on KL Northgate.
In April 2017, KL Northgate issued a letter of intent inviting Anzo’s unit ACSB, formerly known as Harvest Court Construction Sdn Bhd, to jointly undertake the construction of the project with MCC Overseas for up to RM1.21 billion.
Datuk Eddie Chai Woon Chet is the common shareholder of Anzo and KL Northgate.
MCC Overseas is a subsidiary of China Metallurgical Group Corp, which is ranked 290th on the 2016 Fortune Global 500 list with total revenue of US$35.6 billion.
The 18-acre project was initially designed to include a shopping mall, shop offices, hotels, residences and serviced suites. It included the redevelopment of the long-abandoned Selayang Springs Condominium project.
About four months later, KL Northgate revised the project design to focus on residential development instead of a shopping mall due to current market conditions. KNSB was supposed to finalise the contract document by December 2017.
On Bursa Malaysia today, Anzo gained 6.3% to close at 8.5 sen on 781,700 shares traded.