KUALA LUMPUR: Senheng New Retail Bhd has proposed to acquire land together with the buildings erected, which is currently being used as a central distribution centre (CDC) for RM75.8mil cash.
In a filing with Bursa Malaysian, Senheng said its wholly owned subsidiary, Senheng Electric (KL) Sdn Bhd (Senheng KL) entered into a sale and purchase agreement with SDM Assets III Sdn Bhd for the proposed acquisition.
The acquisition involves a piece of freehold industrial land located in Klang, Selangor together with a single-storey warehouse facility with three-storey office space inclusive of ancillary buildings and external structure erected thereon, which is currently being rented by Senheng KL from the vendor and used as the CDC for Senheng and its subsidiaries.
Senheng said the acquisition will result in significant annual gross rental savings of RM4.2mil for the group.
The CDC, purpose-built by SDM and tenanted by Senheng since 2020, is integral to the group’s supply chain management, optimising logistics and enhancing customer experience.
“The CDC is a key enabler of Senheng’s omnichannel shopping experience, enabling us to seamlessly serve our online and offline customers throughout Malaysia, while ensuring timely product deliveries and diverse offerings within our physical stores,” executive chairman Lim Kim Heng said in a statement.
He added that the CDC acquisition strengthened its operational reliability, complementing its ongoing Territory Champion store expansion and upgrade strategy.
“It also supports our latest online-merge-offline (OMO) initiative that provides online customers personalised service by sales personnel from across the country, as well as seamless delivery and in-store pick up options.
The CDC encompasses a built-up area of 200,035 square feet, comprising a warehouse, offices, and ancillary buildings on a 6.6-acre freehold industrial land.
To finance the RM75.8 milm CDC acquisition, Senheng will procure bank borrowings of RM45.8mil and reallocate RM30mil from its initial public offer (IPO) initially designated for its Territory Champion expansion strategy. The acquisition is expected to complete in the fourth quarter of 2023.
As at June 30, the group had an unutilised allocation of RM117.7mil from its IPO proceeds for the Territory Champion strategy.
After reallocating the RM30mil, which was initially intended for store acquisitions, the unutilised allocation will be adjusted to RM87.7mil.