Apartment life becoming popular

Burhanuddin Abe, Contributor The Jakarta Post, Jakarta

Living in an apartment has become the choice of many, from ordinary people, celebrities to prominent businesspeople. This trend has spurred developers to quickly build apartments. Meanwhile, banks are no longer hesitant in extending home loans.

Consumer demand coupled with developers' acumen and bank involvement has seen the apartment market boom. Even Bank Rakyat Indonesia (BRI), which has conventionally extended home loans only for landed property, now finances apartment buyers.

"Apartment development is enjoying huge growth and is a market with much potential," said BRI consumer director A. Toni Soetirto recently after signing a cooperation agreement in Jakarta between BRI and the Pikko Group, the developer of three apartment buildings, namely Sahid Sudirman Residence, Hampton`s Park and Maple Park.

A similar opinion was also voiced by Siswanto Widjaja, property consultant of Procon Indah. The Property Market Review for the third quarter of 2007 and Outlook 2008 reveal optimistic indications that there will be robust growth in the property business, especially in office buildings and condominiums.

The huge potential of the market, said Siswanto, can be seen in the fact that the number of apartments and condominiums keep surging. This year there will be about 56,895 units, including 13,093 condominiums. "There will be a 12 percent increase in the condominium market in 2008," he said.

He stated further that the general election would have an impact on the condominium market, with investments expected to decrease by about 40 percent. He also said there would be fewer new units coming on the market in 2008 compared to 2007, take up would be less, but the occupancy level would remain stable. Demands are projected to be stable up to mid-2008 and slow down thereafter. Current low interest deposit rates offered by banks and attractive mortgage rates for housing creates demand. "The prices of prime projects will increase slightly," Siswanto said.

In almost in every strategic corner of Jakarta there is an apartment project, each with its own unique design and concept. New apartment blocks include Pakubuwono Residence in South Jakarta, Palladian Park in North Jakarta and Casablanca Mansion in South Jakarta. Indonesia Property Watch has recorded that East Jakarta has the fewest apartment projects as currently there is only one, Patria Park, which is being developed by PT Pembangunan Perumahan (PP). In total 12,104 apartment units will be completed this year.

Tight competition is occurring in the middle income segment for apartment purchases. In South Jakarta one can find the Thamrin Residence, The 18th Rasuna Residence, Jakarta Residences, Casablanca Mansion, Latumenten City, Mediterranian Garden and Hollywood Residence, which are being marketed for between Rp 8 million and Rp 12 million per square meter.

Many marketers are of the opinion that the low and middle income segment are making the most demands for apartments in Jakarta. In this sector, developer Agung Podomoro rules the roost in that the company is doing brisk business. Some of the developer's projects are Sudirman Park, Thamrin Residence, Jakarta Residences, Latumenten City and Mediterranian Garden.

All these projects are experiencing stiff competition with the projects of other developers, for example the reputable The 18th Rasuna Residence belonging to Bakrieland Development and Palladian Park owned by PT PP, which is working with Bank Mayapada, a relative newcomer to this business.

However, the competition is also tough in the premium market with the emergence of new projects recently. Agung Podomoro, for instance, has three major projects, namely The Peak, Pakubuwono Residence and Senayan City. Then there is the Gapura Prima Group with The Bellezza and Bellagio Mansion, Djarum Group with its Grand Indonesia, Dharmala Intiland has The Regatta, Tan Kian together with Tommy Winata have Pacific Place, Tommy Winata with Mahaka have The Capital Residence in the Sudirman Central Business District. Premium property developers place a price tag of between Rp 10 million and Rp 17 million per square meter, with Regatta, The Peak and Pacific Place commanding the highest prices.

Currently there is a "hot" project under construction, Kemang Village. This mixed use 12-hectare project in the exclusive Kemang area, South Jakarta, will have various first-class property products: apartments, a star-rated hotel, an international school, a hospital and a luxury mall. Many call it a superblock as almost everything will be available.

Yes, superblocks apparently can be a suitable choice for living in Jakarta. Superblocks are believed to be able to reduce traffic as residents will have everything within reach and have no need to venture far. Some superblocks, each with a different variant, can be found in the Sudirman Central Business District and Mega Kuningan. Other megaprojects are worth trillions of rupiah, such as Central Park (developed by Agung Podomoro), Gandaria City (Pakuwon Group), Grand Indonesia (Djarum) and Rasuna Bakrie Area (Bakrie Group).

The concept of a superblock is something that is focused and integrated. It should measure between seven and 20 hectares consisting of condominiums, townhouses, hotel, plaza or mall, health centers, hospital, school, offices, recreation centers, food courts and places of worship.

According to landscape architect Nirwono Joga, the development of superblocks is a logical answer to the city's problems, such as limited land space, environmental degradation and worsening traffic. Kompas daily, in its Nov. 8, 2007 edition, said superblocks were a great idea that could make a metropolitan city more comfortable and efficient to live in.

The concept of an integrated superblock is beneficial to our city as it maximizes the use of land at a balanced capacity. This means not all land in the city needs to be developed as there should be balance between developed and open, green areas.

"However, the city administration and developers must consistently abide by the spatial regulations by not developing areas that are designated as open, green spaces, such as cemeteries, sports fields, natural or man-made lakes and mangrove forests. All must adhere to the principle of environmental preservation," Nirwono said.