Property leads allocating capital expenditure

Indonesia’s economy boom has had a positive impact upon the property sector, with numerous property developers assigning considerable funds towards capital expenditure (capex), used to expand business, develop new projects or to procure land.

One of the country’s major real estate developers, PT Bumi Serpong Damai Tbk, has this year assigned Rp3trillion (US$25.6billion), towards capex for finance infrastructure development and land acquisition projects.

Additionally, the developer also intends to develop property projects in Serpong, Tangerang plus other areas. The funds are also planned to be used as working capital.

By 19^th June, PT Bumi Serpong Damai Tbk recorded Rp28.017trillion market capitalisation. They are currently working on a number of projects, such as the AEON shopping mall and Saveria Apartment in Serpong, the Grand City housing estate in Balikpapan in East Kalimantan and Indonesia International Expo and Convention Center (IIEC).

Similarly, PT Lippo Karawaci Tbk, another major property developer assigned Rp7.4trillion towards capex, this year. The company made use of the capital to extend business and to finance numerous shopping centre and hospital projects in various different cities.

The developer, with Rp23.645 market capitalization, has just completed a St. Moritz Rp3.5trillion residential project in Makassar, South Sulawesi.

The project is a mixed-use location consisting of an apartment block, a 227,000 square metre shopping centre, a 51 floor tower, a 210 room hotel, a 250 bedroom hospital, a school, a ten room cinema, entertainment centre and multipurpose hall.

Another lead in property, PT Summarecon Agung Tbk, has also spent a great amount on capex. Based in Kelapa Gading, North Jakarta, Rp1.5trillion was assigned towards capex, in which part will be used to develop the Movenpick Hotel in Bali, acquiring new land for current as well as future projects.

The developer, reporting a market capitalisation of Rp16.590trillion, has continued its business expansions by debuting new products, including the Spring Lake apartments in Bekasi of West Java.

PT Pakuwon Jati Tbk and PT Ciputra Development Tbk have also assigned ample funds to their capex.

PT Pakuwon Jati Tbk, this year assigned Rp1.8trillion from internal funds, in which some Rp40million will be used in acquiring land.

Based in Surabaya, the company has a market capitalisation of Rp16.952trillion. Two projects are currently being developed - the Bella Tower apartments and Grand Pakuwon residential project, upon a 128 hectare plot of land under its Kota Kasablanka plan.

The Grand Pakuwon residential project has just begun construction of 250 houses. Within the area, one house occupies approximately 200 square metres of land. The houses will be sold from RP3billion per unit and above.

PT Ciputra Development Tbk this year assigned Rp2trillion to its capex. The company, with Rp15.089trillion market capitalisation, is holding PT Ciputra Property Tbk as well as PT Ciputra Surya Tbk.

At present, Ciputra Development’s subsidiary company, Ciputra Property, is working on several projects – within Bengkulu, Cirebon in West Java, Yogyakarta in Central Java, plus the Ciputra World 2 in Jakarta, the Citradream Hotel in Bintaro and Serpong in Banten. This is as well as the Ciputra International of Jakarta and the Ciputra Beach Resort of Tabanan, Bali.

Ciputra Development’s other holding company, Ciputra Surya, are currently constructing the CitraLand Bagya City in Medan, North Sumatra; CitraLand Green Lake in Surabaya, East Java, as well as other projects in Jayapura, Papua.

In the meantime, entering the second quarter of the year so far, Jakarta recorded the highest property prices of Indonesia, before Surabaya, East Java.

The property price average, particularly for apartments, is Rp24.6million per square metre with a 13% yearly price change. This is as property in Surabaya is approximately Rp21million per square metre with approximately 8% yearly price change. 

High property prices are also to be found in

Manado, North Sulawesi

Tangerang, Banten

Depok, West Java

Semarang, Central Java

Bekasi

Balikpapan, East Kalimantan

Bogor, West Java

Samarinda, capital of East Kalimantan

Kendari, Southeast Sulawesi

Medan, North Sumatra