Kimly unit to buy coffee shop property at Serangoon for $13.2m

SINGAPORE – Coffee shop operator Kimly’s wholly owned subsidiary, Choh Dee (S204) Food House, has exercised the option to purchase a coffee shop property at Serangoon from Lee Quan Enterprises for about $13.2 million.

Lee Quan Enterprises is a private company incorporated in Singapore in 2010. It has an issued and paid-up share capital of $100,000 comprising 100,000 ordinary shares.

The property is a two-storey Housing & Development Board (HDB) shophouse unit at Block 204 Serangoon Central. It comprises a coffee shop on the first level and a three-room HDB flat on the second level.

The property has a strata floor area of 358 sq m. It has 60 years left on its lease, which commenced on Oct 1, 1994.

The book value of the coffee shop property is $14 million, which includes a stamp duty of $890,000. Based on an independent valuation report commissioned by Kimly, the market value of the property was $13.7 million as at June 7.

Kimly said the proposed acquisition is in line with the group’s strategy to expand its network of food outlets in Singapore, as well as establish new food outlets and food stalls “as and when suitable strategic locations become available”.

“The group expects to strengthen its presence in the market by opening more food stalls under its food retail division, which is complemented by its central kitchen,” it said.

It added that it will continue to explore opportunities to acquire and/or operate more strategically-located coffeeshops in mature estates with established footfall.

The consideration will be funded by way of cash and using the company’s internal resources.

The proposed acquisition is subject to the coffee shop property being sold with a condition of tenancy ending on Aug 31, 2025, which will be transferred upon completion; as well as with the written approval of HDB and other relevant authorities.

Choh Dee (S204) or Lee Quan Enterprises has the option to rescind within a seven-day notice period if HDB approval is not obtained by Sept 10, 2024. In this case, all monies paid by Choh Dee (S204) to Lee Quan Enterprises shall be refunded without any interest or deductions, with neither party having any further claims or demand against the other.

The acquisition is expected to be completed on or around Dec 10, 2024, or the date four weeks after the HDB unconditional approval has been granted for the sale and purchase of the coffeeshop property, whichever is later.

The proposed acquisition is not expected to have any significant impact on the group’s financial performance for the current financial year.

Shares of Kimly closed at $0.32, up 1.6 per cent on June 10, before the announcement.

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