Lingerie manufacturer Classita Holdings Bhd is considering a foray into property investment to capitalize on increasing demand. The decision to diversify comes on the heels of the company’s acquisition of 18 retail shop lots in Kajang for RM17 million from Paris Dynasty Land Sdn Bhd earlier this year.
Classita aims to bolster its financial performance by venturing into the property sector, anticipating a positive impact on its bottom line. The move is expected to contribute significantly to the company’s net profits and asset allocation in the future.
Currently, Classita operates a lingerie manufacturing business that has experienced a revenue decline, alongside a property development segment that has been operating at a loss. The company intends to maintain its existing operations while expanding into property investment.
The proposed diversification plan focuses on the Kajang retail shoplots acquired from Paris Dynasty Land, with development expected to be completed by the first quarter of 2025. The favorable acquisition price of RM17 million, equivalent to RM526 per sq ft, was deemed attractive based on an internal valuation assessment.
Paris Dynasty Land, owned by Goh Eugene through Hera Trading Sdn Bhd, is the developer behind the Kajang shoplots. Details regarding Goh’s involvement in the transaction were not disclosed in the company’s filing.
Classita plans to fund a portion of the purchase price using internally generated funds, with the remainder financed through proceeds from a rights issue completed in July 2023. The company’s shares closed unchanged at 6.5 sen, valuing the firm at RM74.41 million.
Industry experts view Classita’s strategic move into property investment as a prudent diversification strategy amidst evolving market dynamics. The synergy between its core business and the property sector could potentially drive growth and enhance shareholder value over time.
With the property market showing resilience and promising returns, Classita’s expansion into this segment aligns with broader industry trends where companies seek to leverage diverse revenue streams for sustainable growth.
As Classita embarks on this new venture, careful strategic planning and execution will be crucial to ensure a successful transition and maximize the potential synergies between its existing operations and the property investment business.
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