Kimly unit enters into joint venture to run coffeeshop at Hougang

CATALIST-listed coffeeshop consolidator Kimly announced on Thursday that its wholly-owned subsidiary Kimly Makan Place has entered into a joint venture (JV) agreement to run a coffeeshop at Hougang.

Kimly Makan Place will manage the coffeeshop located at Block 134 Lorong Ah Soo with private company Jin Xin Yuan.

The total fees to be paid by Kimly Makan Place comprise S$147,000 for a 49 per cent stake in the JV company - Jin Yuan 134 Food House - and a S$588,000 lease assignment fee, which was arrived at on a willing buyer willing seller basis, taking into consideration various factors such as the market rent for comparable leases based on location, size and current rent paid.

The aggregate consideration of S$735,000 has paid in cash through the utilisation of the net proceeds from the company's initial public offering, said Kimly.

Jin Xin Yuan will hold the remaining 51 per cent of shares for S$152,900.

The joint venture is in line with the group's strategy to expand its network of food outlets in Singapore, and to establish new outlets and stalls when strategic locations become available.

"The group will able to diversify and expand its revenue stream through additional and recurrent rental streams, which mitigates the uncertainties in the private-leasing category," it said.

It added that it is looking to strengthen its presence in the market by opening more food stalls under its food retail division, which is complemented by its newly expanded central kitchen. It will continue to explore opportunities to acquire and operate more strategically-located coffee shops in mature estates with established footfalls.

Shares of Kimly ended Thursday at 33.5 Singapore cents, up half a cent or 1.5 per cent.