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Nico Steel extends property lease for 20 years, to invest S$460,000 in machinery, equipment
NICO Steel has extended its property lease at 51 Loyang Way with JTC Corp for an additional 20 years, and has committed to developing the property and investing S$460,000 in additional machinery and equipment.
Mainboard-listed Nico Steel started its operations at the property in February 2012, with the current lease expiring on Dec 31, 2022. The lease extension starts on Jan 1, 2023 and will expire on Dec 31, 2042.
Under the terms of the lease extension, the company will develop the property to a minimum gross floor area at a gross plot ratio of not less than 0.65, but not more than 2.50.
It will also invest at least S$460,000 in additional machinery and equipment at the property within a three-and-a-half year period that starts from early October 2019.
The Loyang Way property serves as the metals supplier's production cum office premises, and has a net book value of S$1.8 million.
It has a land area of 1,402.5 square metres (sq m) and built-up area of 913 sq m with an actual gross plot ratio of 0.65, the company said in a bourse filing on Friday.
"Nico Steel is a homegrown Singapore company. As we move some of our manufacturing operations overseas for closer proximity to our customers, we are still committed to invest and strengthen our home base, particularly in the area of R&D (research & development) of our innovative metallurgical and material solutions," said Danny Tan, executive chairman and president of Nico Steel.
He added that Singapore will continue to be the group’s headquarters to support its regional operations.
Meanwhile, the group said it has yet to receive notice from Suzhou's city government regarding the acquisition of land for its operations in the Chinese city.
Its Suzhou lease expires in 2051, and Nico Steel said it will continue its operations while deliberating the cost-benefits of moving to the northern region of Jiangsu Province in anticipation of a potential relocation order by the provincial government.
Watch-listed Nico Steel's shares last changed hands on Oct 21, where it traded flat at S$0.003.