02/03/2026

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MONDAY | MAR 2, 2026

Paragon Globe: Enquiries on industrial properties flowing in

Ű BY JOHN GILBERT sunbiz@thesundaily.com

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 faci lities, intended either for sale or for long-term occupancy, rather than speculative projects. Chairman Datuk Seri Edwin Tan Pei Seng ( pic ) said from the government perspective, the Johor based property developer’s engage ment is mainly indirect rather than tender-driven. He said infrastructure

o Data centre boom and initiatives such as JS-SEZ create demand for factories, workers’ quarters and commercial support facilities, says chairman of Johor-based developer

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 engage ment 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

ution certainty. “This directly supports demand in established corridors such as Desa Cemerlang and Pekan Nanas, where

we already have infras tructure 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 com mercial uses tied to manu facturing expansion, not just land holdings. “Combined with the RTS Link timeline and JS

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 infra structure rollouts, allowing us to deploy capital where we have greater control over land value and project execution.

Bird’s eye view of Desa 27, a 27-acre industrial development in Desa Cemerlang.

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 recur ring-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 manage ment 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.” relationships, are the most vulnerable in this environment,” Azizan said, adding that MSMEs should treat currency movements as an opportunity to strengthen internal fundamentals rather than as a short-term windfall. Businesses should prioritise improving operational efficiency and inventory management, renego tiating supplier terms and refining pricing strategies, he said. “Firms should also tighten cash flow monitoring and forecasting systems while investing in product differentiation and value-driven positioning.” Exploring new markets, parti cularly those where Malaysian quality standards command stronger recognition, could help reduce reliance on price-based competition, Azizan said.

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 but only if they take proactive steps. “This means restructuring cost bases, locking in better supplier terms and investing in systems that track margins more closely.” MSMEs still operate reactively without strong procurement strategies, digital tools or cost discipline, so the advantages of a stronger currency may slip through the cracks, he said. Export-oriented MSMEs, mean while, face increasing pressure with the stronger ringgit reducing Malaysia’s pricing advantage relative to Vietnam, Indonesia and Thailand, key regional competitors which continue to attract global buyers based on cost. “MSMEs that compete purely on price, or without strong branding, sufficient scale, or long-term buyer

SEZ facilitation mechanisms, this en vironment 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 invest ment 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

“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 invest ment 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 con strained. “As companies regionalise supply chains and rebalance production closer to end markets, demand shifts towards ready industrial locations with connectivity, utilities, and exec PETALING JAYA: Malaysian businesses may see some relief in their cost structures as the ringgit strengthens, particularly those reliant on imported inputs, said RichWorks X founder Datuk Wira Dr Azizan Osman ( pic ). He said a stronger ringgit appears helpful, particularly for MSMEs that depend on imported materials, machinery, ingredients or digital tools. “In theory, a stronger currency reduces raw material and equipment costs, which should improve margins for many F&B operators, retailers, manufacturers, clinics and service providers that rely on software subscriptions, equipment, or platforms from abroad,” Azizan told SunBiz . Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

‘Stronger ringgit could ease cost pressure on Malaysian MSMEs’

stronger ringgit doesn’t automatically lead to higher consumer spending as Malaysian households are still cautious due to cost-of living concerns, inflation effects and high debt commitments. “So MSMEs may not ex perience significant demand uplift unless they offer com pelling value, convenience, or differentiation.”

However, he cautioned that many of these busi nesses do not have long term supplier contracts, strong cost-tracking systems or sufficient working capital to bulk-purchase or hedge foreign exchange gains. “So while their cost base may improve slightly, they’re often unable to fully capture or sustain these benefits.” At the same time, Azizan

The stronger ringgit is creating a clear divide within the Malaysian MSME landscape and this divide is growing more visible in how businesses respond operationally. Azizan said there’s potential for improved cash flow stability and a more optimistic earnings outlook,

said, domestic operating costs including wages, rental, logistics and regulatory compliance continue to rise. “The net result is that currency appreciation offsets existing cost pressures, rather than meaningfully boosting profitability.” On the demand side, he said, a