Coffee shops are our favourite go-to place for reasonably-priced and relatively-delicious food. You might be too busy eating your chicken rice to care, but one of the big food and beverages (F&B) companies, K2 F&B Holdings, running quite a few coffee shops and food stalls in Singapore has just offered to buy over a Jurong West coffee shop for a whopping $31 million.
Could Be Highest Amount Paid Since 2015
If the offer were to be accepted by its current owners, this amount would mark one of the highest paid for a coffee shop in a Housing Board estate, with the last helm being a coffee shop in Bukit Batok that was bought over for a similar amount in 2015.
According to K2 F&B chairman and chief executive Winston Chu, it was still too early to discuss any deal on the coffee shop at Blk 496 Jurong West Street 41, which is also known as Coffee United. He added that if the owners were willing to sell, there would definitely be other interested buyers.
He gave an estimate of nine months before a deal was to be finalised, assuming it even went through in the first place.
Despite the interview, he denied commenting on whether or not the offer was truly $31 million, and only spoke generally about the deal.
Coffee United
According to Chinese-language evening paper Shin Min Daily News, Coffee United, which is located near a community club, schools, and other shops, has 13 stalls and stallowners were heard saying that their rental contracts would end in July. From past experiences, the owners would usually renew their contracts a few weeks prior to them expiring.
Perhaps one of the reasons why K2 F&B Holdings wants to acquire the coffee shop is because of its healthy footfall, especially during the night, as well as its prime location.
As of now, K2 operates 14 coffee shops and has more than 40 food stalls in Singapore. They have approximately 400 employees and an annual revenue of about $45 million.
Coffee Shop As Investment?
National University of Singapore Business School Associate Professor Lawrence Loh shared his thoughts about coffee shops being used as an investment, explaining that coffee shops in a neighbourhood were important to supply food and beverages to the public.
They often attract customers from the neighbourhood and “the clientele tend to be older folk who are regular visitors of these coffee shops”.
When asked about what he thought about the offer, he said, “While there is nothing special about Jurong West in particular, there are still regular flows of patrons to the coffee shops there due to convenience and cost considerations.”
Alright, you can go back to eating your chicken rice now.
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