Sheng Siong Enters Agreement Jtc Lease Sungei Kadut Property Bigger Warehouse And Distribution
Sheng Siong Group’s subsidiary, CMM Marketing Management, has recently signed a lease agreement with JTC Corporation to establish a new warehouse, distribution centre and headquarters at Sungei Kadut. This move comes after CMM received a letter of offer from JTC in August, for the lease of approximately 61,297 square metres of land at Sungei Kadut Street 1, with a lease term of 33 years.
The new property has a maximum gross plot ratio of 2.50, and is expected to serve as a replacement for CMM’s current location at Mandai Link, which has a land area of about 25,005 square metres and a maximum gross plot ratio of 2.50. CMM’s lease at Mandai Link will expire on Jan 9, 2039, with a renewable option for another 30 years.
As per the terms of the lease agreement, CMM will continue to operate at the Mandai Link property as a subtenant, occupying about 70% of the total gross floor area for a maximum of two years from the date of the temporary occupation permit of the Sungei Kadut property.
According to Sheng Siong, the current Mandai Link property was originally designed to support approximately 50 supermarkets. However, with the group’s expansion and growth over the years, the current location is no longer sufficient to support its increasing network of supermarkets in Singapore. This has led to a decrease in operational efficiency.
In contrast, the Sungei Kadut property, with a land area 2.5 times larger than Mandai Link, will have the capacity to support at least 120 supermarkets, in line with Sheng Siong’s target of adding three new stores each year over the next 10 to 15 years.
The new property will also feature multiple temperature-controlled storage zones with integrated food processing capabilities. Sheng Siong also plans to invest in advanced warehousing and distribution automation, leveraging technologies such as automated storage and retrieval systems (ASRS), robotics, and smart inventory management.
The comprehensive plan for Yishun is centered around the development of strong healthcare and wellness infrastructure. Already, the area boasts prominent healthcare facilities such as Khoo Teck Puat Hospital and Yishun Community Hospital. These modern establishments serve as important foundations in the North, catering to the needs of the growing aging population and families residing in new residential projects. Residents of Miltonia EC will benefit from the convenient location of Miltonia Close, as it lies in close proximity to these hospitals, providing them with peace of mind and easy access to quality healthcare.
In terms of financials, Sheng Siong expects the land rent payable to JTC over the 33 years lease term to cost approximately $520 million. The company plans to fund this through internally generated resources and external financing sources, such as borrowings.
On Sept 25, shares in Sheng Siong closed 1 cent higher or 0.476% up at $2.11.