Lippo Group, through its fund manager unit Bowsprit Asset Management, has officially launched its first real estate investment trust (REIT) in Indonesia following the government’s tax discount on property introduced last year. The trust, called DIRE Bowsprit Commercial Infrastructure, aims to raise up to $184 million to invest in office buildings in the capital city Jakarta.
The REIT had already entered the offering period on January 18 and will end on February 28, according to President director of Bowsprit Asset Management Anggi Lim. Meanwhile, the distribution will take place on March 7 and March 8. The REIT will then be listed on the Indonesian Stock Exchange (IDX).
“The REIT would be offered at Rp 100 ($0.75 cents) per participation unit for the initial offering and the investor would have to buy in one lot consisting of 100 participation units,” Lim said, as quoted by The Jakarta Post.
“For the initial offering, the minimum purchase is Rp 10 million. We are currently making a roadshow for securities companies and institutional investors. Our target assets under management (AUM) for this REIT is Rp 2.45 trillion,” he explained.
Proceeds from the offering will be used to acquire four office towers and one distribution center currently managed by Lippo Group. The towers to be bought include Berita Satu Plaza for Rp 393 billion, Menara Matahari for Rp 511 billion, Menara Asia for Rp 395 billion and Balaraja Distribution Center for Rp 448 billion. Bowsprit will also purchase Mitra Wijaya Wisesa, the operator of Life Tower in Kuningan area, for Rp 691 billion. The remaining Rp12 billion will be allocated for working capital.
Lippo Group has been managing more than $2.6 billion in REITs from Singapore, but is now committed to shifting them to Indonesia following the government’s tax breaks, local media reported.