IQPlus - Fitch Ratings has assigned Indonesia-based property developer PT Alam Sutera Realty Tbk's (ASRI, B+/Stable) USD225m 9% notes due 2019 a final 'B+' rating, with a Recovery Rating of .RR4.. The notes are issued by Alam Synergy Pte Ltd and guaranteed by ASRI and certain subsidiaries.

The notes are rated at the same level as ASRI.s senior unsecured debt rating as they represent direct, unconditional, unsecured and unsubordinated obligations of the company. The rating action follows the receipt of documents conforming to information already received. The final rating is in line with the expected rating assigned on 7 January 2014.

Proceeds from the notes will be used to finance the tender offer for its 2017 USD150m notes, project development and construction, redemption of any remaining 2017 notes in 2015 and for general corporate purposes.

The ratings reflect ASRI.s small scale, project concentration and inherent volatility in the property developments. Historically, more than 50% of marketing sales derived from ASRI.s mature township in Serpong, a satellite city in the western part of Greater Jakarta.

Fitch expects the company to gradually achieve a more diversified project mix as ASRI.s second township project at Pasar Kemis develops. Management estimates Pasar Kemis will account for about 43% of total marketing sales in 2013 (2012: 18%).

2014 will be particularly challenging for property developments aimed at middle- and high-income buyers, such as ASRI.s Serpong project, with stricter mortgage regulation and the upcoming general election dampening investors. buying sentiment.

Fitch expects the higher presales at ASRI.s Pasar Kemis and steady recurring income from shopping malls and cultural parks to make up for the lower presales at Serpong.

The ratings also recognize ASRI.s low-cost, large land bank inventory, strategic development locations, and track record of successful project executions. ASRI is one of the pioneers in developing large-scale townships in Serpong, which is now a popular alternative to other areas in Greater Jakarta.

Fitch believes ASRI will be able to leverage on its success story at Serpong for future project launches, as it recently demonstrated with the higher-than-expected sales for project launches in Pasar Kemis.