Courts Asia acquires building in Jakarta from Sinarmas Land

Singapore

COURTS Asia's wholly-owned subsidiary, PT Courts Retail Indonesia (PTCRI), has acquired the KHI Building in Jakarta, Indonesia, from a subsidiary of Sinarmas Land for around 97.56 billion rupiah (S$9.36 million), as it looks to restructure its store format in the country.

PTCRI, as lessee, has also mutually agreed with PT Garwita Sentra Utama - which is a subsidiary of Singapore Exchange-listed Sinarmas Land - to terminate two existing leases, namely the existing lease of KHI Building where Courts Kota Harapan Indah (KHI) Megastore is located; and the existing lease of a plot of land and building in Tangerang, where the Courts Bumi Serpong Damai (BSD) City Megastore is located. As such, PTCRI has to pay a penalty of 38.7 billion rupiah and forfeit a security deposit of around 14.38 billion rupiah.

The KHI Building has a total gross floor area of about 21,800 square metres and a remaining lease period of about 24 years.

The acquisition was funded by the group's internal resources.

Courts said that the decision to undertake the acquisition and termination of the existing leases was part of the group's ongoing review of its store network and the group's efforts to restructure its store format in Indonesia. It added: "The group decided to close the Courts BSD Megastore as it is historically not profitable and the group does not want to incur the high rental costs over the remaining lease term."

Terminating the existing lease saves the group from "heavy recurring rental and operating costs", the retailer highlighted.

The acquisition of KHI building will give it more flexibility to consider how to restructure the Courts KHI Megastore, such as by optimising or right-sizing the existing store premises for better efficiency, and potentially repurposing the rest of the premises for other potential commercial uses, Courts added.

The counter closed at S$0.154 on Tuesday, up 0.5 Singapore cents.