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The Jakarta Post
The five-star Sahid Jaya hotel is located on the busy Jl. Sudirman in Central Jakarta. (Courtesy of http://www.pthsji.com//-)
Hotel and property firm Sahid Group is not interested in issuing real estate investment trustees (REITs) just yet, as doing so would not be line with the company’s business portfolio.
According to group chairman Hariyadi Sukamdani, REITs are more suitable for property firm operating assets with robust recurring income, such as malls and hospitals, and not for those operating hotel chains with seasonal income.
The group's portfolio is dominated by hotels, totaling 24 hotels, while operating three apartment buildings, Sahid Sahirman Memorial Hospital, and the newly finished Yogya Lifestyle City superblock, which comprises condominiums and a mall.
"Yogya Lifestyle City has just opened and is not ready for REITs yet," Hariyadi told thejakartapost.com at the Finance Ministry after a tax amnesty familiarization event in Jakarta on Thursday.
According to him, REITs are more valued by the assets earned rather than price. Thus, if a REIT’s value is still lower than the asset's price, according to Hariyadi, it is not ready for REITs issuance.
"We have conducted research on this. It is not suitable yet for us to issue REITs. Therefore, we will go with bank loans," he said. (ags)
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