Source : Straits Times – 12 Sep 2009
LOCAL supermarket chain Sheng Siong is on an expansion drive with its recent purchase of five wet markets for $25.55 million. It bought them from mainboard-listed Heeton, a boutique property developer.
The wet markets are at Choa Chu Kang Street 62, Choa Chu Kang Avenue 1, Serangoon Avenue 3, Bukit Batok West Avenue 8 and Fajar Road.
The deal looks set to mark another expansion phase for Sheng Siong, a homegrown chain which has been growing in leaps and bounds. It
is not clear what changes, if any, will be made. A Sheng Siong spokesman told The Straits Times: ‘Our company has not made a formal announcement to staff on its plans for the wet markets yet.’ Plans will be announced soon, when the deal is completed, she added.
Sheng Siong has seen phenomenal growth since it started with one outlet in Ang Mo Kio Avenue 3 in 1985. It now owns and operates 22 supermarket outlets, clocking a turnover of $667 million last year. It is opening its 23rd outlet in Punggol soon. Sheng Siong recently announced that it would build a customised distribution centre to better serve the needs of the outlets.
For Heeton, the wet market business has brought in steady rental yields and good cashflow. However, its wet market revenue as a proportion of total revenue is small as it expanded aggressively in the property development business over the years. It has developed the exclusive The Lumos condo at Leonie Hill. With the sale of the wet markets, the business will be focused on boutique property development.
Heeton said the funds will allow it to beef up its land bank and to develop more projects.
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