SINGAPORE - Courts Asia's wholly-owned subsidiary, PT Courts Retail Indonesia (PTCRI), has acquired the KHI Building in Jakarta, Indonesia, from PT Garwita Sentra Utama for around Rp 97.56 billion (S$9.36 million).
PT Garwita Sentra Utama is a subsidiary of Singapore Exchange-listed Sinarmas Land.
PTCRI, as lessee, has also also mutually agreed with PT Garwita Sentra Utama 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, Indonesia where the Courts Bumi Serpong Damai (BSD) City Megastore is located. As such, PTCRI has to pay a penalty of Rp 38.7 billion and forfeit a security deposit of around Rp 14.38 billion.
The KHI Building has a total gross floor area of approximately 21,800 square meters and a remaining lease period of approximately 24 years.
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."
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 forother potential commercial uses, Courts added.