Case Study: Retail Asset Disposal – Tangerang

Case Study: Retail Asset Disposal – Tangerang

Colliers International Indonesia Capital Markets & Investment Services expert, Adianto Arminta, and our Head of Retail Services, Sander Halsema, were appointed to source potential occupiers to acquire an existing hypermarket building located in Tangerang. This building was built and operated by a pioneer company in the modern retail industry in Indonesia.

Challenge
The property was built under a BOT (build-operate-transfer) structure. At the end of the lease period, the property owner is required to return the building to the landowner.

As the BOT period still has more than 20 years remaining, the property owner planned to transfer the remaining BOT agreement to a new assignee. The process and structure of BOT transfers are quite unique, so it is rare to identify any BOT transfers in the market.

Another challenge that our team encountered in closing the transaction was the Covid-19 pandemic that emerged in the process, which resulted in a more complex negotiation phase for all parties.

The Strategy
We did not see these challenges as disadvantages, but as an opportunity to collaborate and improvise various strategies. Our experts sought prospective assignees who were interested in acquiring an existing, free-standing hypermarket building. Throughout the process, our experts were extensively involved in:

• Sourcing prospective assignees from the retail sector who had expansion plans to grow their business in the JABODETABEK area, especially in Tangerang;
• Approaching other retail sectors such as showrooms, hospital clinics, cinemas and F&B which might require a large area;
• Actively updating all parties including the seller, potential buyer and landlord on the BOT transfer process and licensing arrangements;
• Advising the client regarding the marketing strategy, negotiations and all administrative work until the handover of the building and land.

Result
Adianto Arminta and Sander Halsema successfully managed to source an assignee, a hypermarket chain from U.A.E. (United Arab Emirates) who were looking to expand and open new stores over the next five years in several regions, including one in Tangerang.

Adianto Arminta and Sander Halsema understood that the considerable potential of the assignee might potentially match with our client’s needs. Our expert team succeeded in convincing the assignee to acquire the property and managed to close the transaction during the pandemic situation in Q4 2020.

For more information on our Capital Markets & Investment Services, please click here, or to learn more about our Retail Services, please click here. If you wish to lease, invest or dispose of your retail building, please contact our experts:

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Related Experts

Sander Halsema

Senior Associate Director

Jakarta

Sander joined Colliers International in July 2013 as Head of Marketing for Colliers the Netherlands, based in Amsterdam. After working for Colliers the Netherlands for two years Sander moved to Indonesia to join the Colliers team in Jakarta. Sander is currently heading the Retail Services Department at Colliers International Indonesia.

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Adianto Arminta

Marketing Executive

Jakarta

Adianto is keen on delivering a quality customer service experience in every aspect of a real estate deal. In bringing together sellers, investors, and financing, win-all situations are made possible through a deep understanding of the client, the deal, and the ultimate objective. Within the Investment Services department, Adianto concentrates efforts towards strategic divestment of client properties to fully realize profit potentials. In the acquisition of portfolio assets, Adianto seeks to secure value maximization. Transactions are made possible with assets across Indonesia in sectors such as hospitality, office, industrial, retail, land, residential, etc.

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