SINGAPORE (Jan 15): Courts Asia’s Indonesian subsidiary is acquiring a new property but ending two existing megastore leases as part of the group’s ongoing review of its store network and store format in the country.
In a Tuesday filing, Courts Asia says PT Courts Retail Indonesia Courts (PTCRI) has acquired KHI Megastore in Jakarta for $9.4 million from seller PT Garwita Sentra Utama which is a subsidiary of Singapore Exchange-listed Sinarmas Land.
Concurrently, PTCRI is terminating the existing lease for Courts Kota Harapan Indah (KHI) Megastore which is located in the KHI Building.
KHI Building has a total gross floor area of 21,800 sqm and a remaining lease of 24 years.
Courts Asia says the acquisition will give the group more flexibility to consider how to restructure the Courts KHI Megastore. This includes the option to optimise or right-size the existing store premises for better efficiency as well as repurposing the rest of the premises for other potential commercial uses.
The termination of the Courts KHI Megastore lease will also free up the group from having to deal with heavy recurring rental and operating costs, adds Courts Asia.
Elsewhere in BSD City, PTCRI is also terminating the lease of the plot of land and building at BSD City where Courts Bumi Serpong Damai (BSD) City Megastore is located. This other property is also owned by PT Garwita Sentra Utama.
In respect to the early termination of the leases, PTCRI will pay PT Garwita Sentra Utama a penalty of $3.7 million in cash for Courts KHI Megastore and forfeit the security deposit of $1.38 million, which had been previously provided to the seller under the BSD land and building lease.
As at 4.27pm, shares in Courts Asia are up 0.5 cent at 15 cents.
