Foreign developers keen on Indonesia's property market

A number of foreign developers have laid eyes on Indonesia’s property market owing to the country’s massive population and economic growth of 5.5% - the highest of South East Asia.

It has been reported, investors from China, Korea, Malaysia and Singapore have expressed interests in extending property businesses to Indonesia. The property project types they are interested in, vary from residential projects including apartments to commercial projects, such as shopping centres and industrial estates.

For example, the Singaporean based Pacific Star Holdings Pte Ltd., intends to manage one property project in the Sudirman Central Business District (SCBD) in Jakarta and another one in Bali.

This is as they cited data from the United States Trade Department, highlighting that Indonesia quarters the world’s fourth-most populous country with 253.60million people, as the reason for investing towards the country’s property sector. It selected Jakarta as the project site, owing to the city’s profitable nature for property development.

Metland developing three new commercial and residential projects this year

Beautiful Botanical Gardens in Bogor, near where the first mall of Cileungsi will be built

Property developer, Metland (officially Metropolitan Land), are to commence construction of three new commercial and residential projects throughout Indonesia this year.

Announced at the company’s press release, one of the projects prepared is to be a commercial and apartment complex within West Jakarta, marketed as Metland West City. It is due to launch by the end of 2014. Following the company’s yearly shareholder’s meeting in the Jakarta capital on Monday, the investment value of Metland West City is still to be determined.

Metland West City will be developed across 60hectares, with around half to be allotted to commercial development.

The latest developments in Indonesia

Property developer, The Blacksteel Group, has announced plans to construct projects worth $300million in various Indonesian cities until 2018. The Lippo Group stated the company will concentrate on developing property within remote areas.

One project is the development of Lombok City Center (LCC), a mall in Mataram, the capital of the island. Funds of the project are from a variety of sources combined from money from investor’s, internal cash and bank loans and money from investors. The LCC is expected to be completed by 2016 with investment for the project estimated at approximately Rp1trillion ($86million). The Lippo group claim LCC will boost the image of West Nusa Tenggara to transform to a modern province providing bright investment prospects.

Furthermore, LCC is assumed to open employment opportunities in the region, aid in propelling consumer purchasing power and boost the regional economy. Representatives from Lippo have also claimed Blacksteel intends to develop property projects in areas that big developers have not yet engaged with; concentrating on second and third tier Indonesian cities. This is with Blacksteel plans to construct 17 malls over the next five years.

Higher wages together with steady economic growth over recent years has given greater purchasing power to consumers of Indonesia’s Eastern provinces.

The company is currently developing the Ambon City Center (Maluku province) and Ponorogo City Center (East Java) malls.

Blacksteel is independent of the Lippo Group.

Cushman and Wakefield's worldwide retail report - Brought to you first by Commercial People

A global retail report from Cushman and Wakefield today, showed global trends continue to stay positive for shopping centre development. Crucial additions to supply are expected between now and 2016 within major emerging markets such as Brazil, China, India, Indonesia and Russia.

Signaling well for the property industry are the remarkable increase in ultra-high net worth individuals worldwide and improving global economic fundamentals, plus stronger consumer confidence. Global GDP is assumed to grow at a 3.4% rate, the highest since 2011. Household spending will contribute significantly to GDP gains, lead by spending in the U.S., E.U. and China. China is still assumed to record a global best at a 4.5% rise in consumer spending during this year, which will rise further to 5.1% next year.