NAM ordered to pay Groningen home owners compensation now

DutchNews, January 23, 2018

A condemned and shored-up cafe in Zeerijp. Photo: Graham Dockery

Gas production company NAM has been ordered by judges in Leeuwarden to immediately start compensating home owners in Groningen for the loss of value caused by the earthquakes. 

NAM had said it is only willing to pay the difference once the property has been sold but the appeal court judges agreed with an earlier court ruling which said compensation should be paid now. 

Research bureau Atlas voor Gemeenten said last year that between 2012 and 2017 homes in the earthquake zone in Groningen have fallen in value by an average of 2.2% because the region’s reputation has been damaged. 

The researchers focused their attention on areas in which at least 20% of the homes were damaged by earthquakes and found that homes that were not physically damaged also went down in value. 

Homes in Loppersum, a centre of many of the quakes, lost an average of 8% of their value, while homes in the city of Groningen are now between 0.9% and 2.9% cheaper. 

A foundation representing 4,000 home owners said it now wanted to get round the table with NAM as soon as possible to start fleshing out the compensation deal. ‘Four years after we started legal action, it is about time,’ chairman Lolke Weegenaar told broadcaster NOS.

Related Article:

Minister tells big firms to stop using Groningen gas by 2020

More homes, hotels built in empty offices

DutchNews, March 10, 2016

A quarter of the office space in Amsterdam and Eindhoven would have been left empty if efforts had not been made to turn it into hotels and homes, property advisory group JLL said on Thursday. 

However, by redeveloping empty offices as homes, the vacancy rate has been cut to around 15%, JLL said in the Financieele Dagblad.

In 2006, some two million square metres of office space was leased to new tenants but by last year this had fallen to 1.2 million square metres. By demolishing old properties and transforming others into housing, developers were able to keep the take-up at over two million square metres, for the first time since the economic crisis, JLL said. 

On average, around 15% of office property in the Netherlands is empty.  Fewer offices are needed because companies are working in smaller spaces as more workers are allowed to work from home.

Billionaire Sy to Build Micro Cities Around His Philippine Malls

Jakarta Globe, Ian Sayson, Apr 01, 2015

Filipino residents paint homes as an AirAsia plane flies over at a housing project
in Paranaque city, south of Manila, Philippines, on March 25, 2015. Growth in the
 Philippine economy is set to pick up in 2015 as government expenditure
expands and both private consumption and investment remain strong, says a
new Asian Development Bank report. (EPA Photo/Francis R. Malasig)

Billionaire Henry Sy, the richest person in the Philippines, will start to develop apartments, offices and hotels around his shopping malls to maximize the value of property holdings in the face of similar moves by competitors.

Fifteen of 50 shopping malls now owned by Sy’s SM Prime Holdings are on land large enough for high-density, mixed-used development, executive vice president Jeffrey Lim, 53, said in an interview in Manila on Monday. Depending on demand, five so-called townships will be built in two years and about 10 more over five years, he said.

The townships will be part SM Prime’s 500-billion-peso ($11 billion) expansion from now through 2019, Lim said. They will pit the largest Philippine mall developer against Ayala Land and Megaworld, the biggest builders of mixed-used projects. Ayala and Megaworld have been building townships for several years, capitalizing on the rising office-space needs of outsourcing companies, while higher remittances from Filipinos abroad have fueled home purchases.

“SM Prime has plenty of resources around its malls, and these will become expensive parking lots if they don’t do this,” said Richard Laneda, an analyst at COL Financial Group, who has a buy rating on the company’s stock. “If they don’t do this, the market will go to the other developers.”

Publicly-held Philippine builders’ push for townships in and out of Manila boosted their capital spending to a record 331 billion pesos, according to broker Savills. Congestion in Metro Manila is driving demand in these micro-districts, it said.

‘On their toes’

Remittances climbed 5.8 percent to a record $24.3 billion last year. Money transfers from Filipinos living and working overseas account for about 10 percent of the nation’s economy, the World Bank estimates.

“The live-work-play lifestyle in these townships have resulted into a lot of success for some major developers,” Michael McCullough, Manila-based managing director at KMC MAG Group, the local associate of Savills, said in mid-March.

SM Prime “has to be on their toes to continue to have the upper hand,” said Allan Yu, first vice president at Manila- based Metropolitan Bank & Trust. He helps manage  about $7.5 billion, including SM Prime shares. “They have to upgrade their existing assets, not just expand their portfolio.”

Growing landbank

SM Prime has gained 37 percent over the last year, exceeding the 30 percent gain in Megaworld and the 29 percent advance in Ayala Land. The Philippine Stock Exchange Index has added 24 percent in that period and the Bloomberg Asia Pacific Real Estate Index 24 percent.

Net income will climb 19 percent this year to 21.87 billion pesos, according to median of 13 analyst estimates compiled by Bloomberg.

The company’s landbank stands at 900 hectares, Lim said. Before Sy pooled his property assets into SM Prime in 2013, the mall builder’s landbank was about 120 hectares, Lim said.

Sy, who is 90, has an estimated net worth of $13.4 billion, according to the Bloomberg Billionaires Index. He migrated to the Philippines from China in 1936 and started selling rice, sardines and soap in his father’s Manila store. He opened a shoe store in 1948 and eventually built his business empire in the 1980s by opening malls.

Manila reclamation

SM Prime plans to spend 70 billion pesos this year to build malls and homes. After constructing three to four malls a year, SM Prime has said it plans to open as many as five in 2015. It plans to start five new residential projects this year and expand existing developments if there is demand.

As part of its strategy for 2015, SM Prime aims to sell as many as 14,000 homes valued at about about 3 million pesos each, Lim said. There is not a supply glut in that portion of the market, he said. The company gets about a third of revenue from home sales.

For the longer term, the company has applied to reclaim 600 hectares of land along Manila Bay and spend about 100 billion pesos to turn the property into a master planned integrated and mixed-use community. The development is adjacent to the group’s Mall of Asia complex and the strip of four integrated casino resorts that will make up Pagcor Entertainment City.

That plan, which has won permission from the city governments of Pasay and Paranaque, will be among the single biggest contiguous developments in Manila if approved by the nation’s economic planning agency.

“A number of our malls have excess land, and these are just there untouched,” Lim said. “Our thrust is to maximize the synergies of integrated development. Building lifestyle cities will maximize the potential of our properties.”

Bloomberg

Bali Legislator Says Island of the Gods Is Being Overrun by Property Sharks

Jakarta Globe, Made Arya Kencana& Antara, August 02, 2010

Denpasar. Bali’s booming property market is being overrun by rogue developers who are forging land titles in order to stake bogus claims to high-yield land investments, a prominent local legislator said on Monday.

“These people are cashing in on Bali being a famous island that holds strategic future value,” Made Arjaya said.

He said that of greater concern for Bali’s burgeoning property market was that those involved in illegal practices were being awarded land ownership through the courts, raising more questions about the country’s endemically corrupt and embattled judiciary.

Arjaya, a former official for provincially held assets and a member of the Indonesian Democratic Party of Struggle (PDI-P), called on the police to investigate the land disputes and shine a light on the organized groups that he said were behind the land grabs.

The legislator said he became aware of the frauds through lawyer HK Kosasih, who also represents Bali property developer Edy Sukaton Saputra.

In January 1996, Margasrikaton Dwi Pratama, a company that Edy served on as a director, won an auction for a parcel of state-owned land. The auction was organized and conducted by the National Land Agency (BPN).

Margasrikaton was awarded a contract and title deed to develop a 230,450-square-meter lot in Badung district’s Ungasan village. But that is where the good times ended for the company.

Shortly after being handed the title, another group, led by Bali native I Wayan Tama, claimed it was in possession of the authentic land titles, despite the BPN running an auction for land that was clearly state-owned.

The wrangling continued up until November 2005, when the Supreme Court in Jakarta ruled in favor of Tama and his associates.

“What makes absolutely no sense is why the Supreme Court approved their claim based on patently falsified documents,” Arjaya said.

He added that a criminal investigation of the case would undoubtedly lead to similar cases being uncovered both in Bali and elsewhere in the country.

The legislator said there were large plots of state land across Bali vulnerable to similar takeovers, including a combined 11 hectares in Pecatu village, Badung, which is the site of a planned tourist resort and is currently embroiled in a dispute between the provincial administration and a local developer.

The Garuda Wisnu Kencana park in South Kuta, the site of a planned commercial and tourist center, has been abandoned due to a similar dispute.

“We risk allowing those two strategic assets to be taken over by rogue investors,” Arjaya said.

Two RI projects win Fiabci awards

Andi Haswidi, The Jakarta Post, Nusa Dua | Sat, 05/29/2010 10:53 AM

The International Real Estate Federation (Fiabci) has chosen 12 winners and 12 runners up from 54 nominees as recipients of the most prestigious award in the property industry, the Fiabci’s Prix d’Excellence Awards.

Regatta the Icon, a collaboration between home developers PT Intiland and PT Global Eka Buana, emerged as the winner of the Bali Congress Award, a category made especially for the 61st Fiabci World Congress, held in Nusa Dua, Bali, from Thursday to Friday.

Another project in Indonesia, the Jakarta Garden City by PT Mitra Sindo Sukses, was named the second-best low-rise residential complex in the world in this year’s accolade.

The Regatta is a property development that includes 10 apartment towers with an aqua park, hotel and a serviced apartment, located on an 11-hectare plot at Pantai Mutiara beach in Ancol, North Jakarta.

The structure was designed by Tom Wright of Atkins, an architecture design consultant based in Epsom, United Kingdom, that is famous for global landmark buildings such as the Burj al Arab in Dubai.

President of the Fiabci Prix d’Excellence Awards 2010, Yeow Thit Sang, said the purpose of the awards was to encourage property developers to continue innovating while maintaining high standards.

“Indeed, the quality of the projects submitted prior to the competition was of a very high standard,” Yeow said.

One fact that stood out was that the environmental assessment category counted for more this year, up to 25 percent from 20 percent last year.

Johannes Tulung, head of the environmental issues at the Indonesia Real Estate Association said that the winners had been selected in a transparent process where each judge on the panal evaluated each project independently.

“It means that we don’t know who the other judges are. I was assigned to evaluate a project without knowing who the other judges were,” he said.

The winning projects were from 11 countries. Asia contributed the most nominations with 40 projects from eight countries, followed by Europe with 11 projects from two countries, and the United States with two projects.

The independent judges are real estate industry professionals from 18 countries. Among them were presidents of a number of Fiabci chapters in different areas, former Fiabci presidents and reputable property professionals such as architects, surveyors, appraisers and developers.

The committee chairman of the 61st Fiabci World Congress Bali, Pingki Elka Pangestu, said Indonesia had had a large number of properties evaluated for the esteemed accolade.

Some of those constructions, Pingki said, were of excellent quality, boasting world-class designs and building material.

“I also believe that the Prix d’Excellence is an effective way to improve consumers’ confidence in getting the best products,” Pingki concluded.

Government mulls allowing expatriates to own houses

Ridwan Max Sijabat, THE JAKARTA POST, LAMONGAN 

Green housing: President Susilo Bambang Yudhoyono plants a Sawo Kecik tree Tuesday at a park in the Graha Indah housing complex in Tambakrigading village, Tikung district, Lamongan, East Java. First Lady Ani Yudhoyono, several ministers and the Indonesian Military and National Police chiefs were also invited to plant various trees, after the President inaugurated the opening of some 114,000 units of healthy simple houses (RSH) in the area. JP/Ridwan Max Sijabat

Expatriates, investors in particular, living in Indonesia will no longer have to spend much money to rent luxury residences in the country. 

President Susilo Bambang Yudhoyono said Tuesday he would ask the National Land Agency (BPN), the home minister and the state minister for people's housing affairs to conduct an in-depth study into granting expats home ownership rights. 

"The government has no objection to this, provided it will benefit the people and make the country's climate more conducive to foreign investment," Yudhoyono said at the launch of 114,000 units of healthy simple houses (RSH) in Lamongan, East Java. 

The event also featured a dialogue with housing developers and homeowners, in which the Indonesian Real Estate Association (REI) raised the issue of home ownership for expatriates. 

Currently, expats in Indonesia are not allowed to own homes. 

A 1996 government regulation states they may only have house utility rights for 20 years, which may be extended for another 20 and 25 years consecutively. 

REI chairman Teguh Satria called on the government to revise the regulation to grant expatriates a 70-year home ownership right, in an effort to make the country more competitive and conducive to foreign investment. 

"This way, Indonesia will be able to compete with Singapore," he said. 

"If the government regulation is revised to allow expats to own homes, the prices of our apartments and other properties will rise sharply," he said. 

"Thus many foreign investors will not be interested in luxury residences and apartments, because they have the right to only use them for 20 years, and afterward they have to resell them or return them to the government." 

The REI also lauded the government's attention to its program to develop affordable homes for low-income people, in the hope the government would continue granting subsidies for the project. 

"SBY is the only president who has officiated three housing complexes built under the 100,000-house program, and we expect him to continue supporting the program in the coming years," Teguh said. 

Regarding on the housing subsidy, the President pointed out the government's limited capability and said it had allocated Rp 2.5 trillion in subsidies to develop affordable houses for low-ranking civil servants, servicemen and police personnel this year, with bigger amounts of the state budget allocated for the development of education, health and infrastructure projects. 

Yudhoyono also asked Indonesian Military chief Gen. Djoko Santoso and National Police chief Gen. Bambang Hendarso, both present at Tuesday's event, to raise housing deposits for servicemen, because the monthly wages of low-ranking soldiers and police personnel had increased more than twofold to Rp 1.7 million from Rp 700,000. 

During the ceremony, the President also witnessed the handover by state insurance company PT Jamsostek of Rp 174.7 billion in housing loan assistance for 25,000 workers in East Java through state-owned Bank Tabungan Negara (BTN).

Old Town project moves at snail’s pace

Agnes Winarti, THE JAKARTA POST, JAKARTA | Mon, 02/16/2009 11:33 AM 

 

A 2,800-square-meter reddish-brown building stands tall on the corner of Jl. Kali Besar Timur in the Old Town, West Jakarta, despite the bruises brought by aging.

 

Peeping inside, one is captivated  by rays of sunlight passing through its vast space, as most of the building’s roof has vanished. A huge tree has been the building’s sole occupant over the past 30 years.

“Please see the sign. You can not enter without the owner’s permission,” Rohadi, the building’s keeper  told a group of curious youngsters who were just about to step inside.

“I am planning to renovate the roof soon. For safety reasons, I do not permit visitors to enter,” Ella Ubaidi, owner of the two-story building, said on Saturday.

Another roofless building next to Ella’s houses a small group of the homeless people, who have built shelters made of plywood inside.

There are some 50 category A   (over 50-years-old, of historical value and having a rare architectural design) and B (over 50-years-old) buildings in the Old Town area, but only two are undergoing renovation.

Some 70 percent of the buildings are owned by state enterprises, including Bank Mandiri and the Indonesian Trade Center.

Teguh Atmoko, an architecture and spatial planning adviser of the Jakarta Old Town association, told The Jakarta Post that heritage building conservation could cost up to Rp 5 million (US$425) per square meter (sqm).

Restoration of old buildings requires special, construction materials, which are costly.

In order to attract building owners to invest in the conservation, Teguh and Ella said the administration must build the basic infrastructure and ensure safety, public order, sanitation and orderly transportation in the area.

”I am aware that it is not the time to look for who’s to blame. But the basic infrastructure is clearly not sufficient. Illegal parking, unruly public transport, the smelly canal, wandering bums and thugs are all problems,” Ella said.

“The administration has focused only on cosmetic appearance, such as installing lamps and planting trees, while we [owners] expect social and economic improvement of the area,” she added.

Teguh said integrated policy to revitalize Old Town was important. For example, he said, the Kali Besar river had not been dredged for years, but the administration had began restoring it embankment.

“The pavement stones along Jl. Pintu Besar were constructed higher than the buildings along the street. The administration never consulted with the experts in the conservation team,” he said.    

Teguh added that the ownership of some 30 percent of the buildings was in dispute. 

Last year, Teguh completed a guideline for the function of buildings in Old Town. The guideline proposed the ground floor of the buildings be used for commercial purposes such as restaurants and shops, while the upper level be used for hotels and residences. 

Ella said she had appointed a keeper to clean her property, which decades ago functioned as a warehouse for tea products.

“There are still a lot of things to be done to revitalize the Old Town. We are moving towards that, slowly,” Teguh said.

 

“It is still better than not moving at all, though,” he added.

Budget hotels may buck property trend

Benget Besalicto Tnb. , THE JAKARTA POST, JAKARTA | Thu, 02/12/2009 11:24 AM  

Slowing up: Three towers are under construction in Central Jakarta. Weaker demand and high interest rates are slowing down growth in the property sector this year, delaying start-up dates for planned building sites. (JP/Ricky Yudhistira)

Contrary to the slowing growth of the property industry as a whole, the budget hotels market is predicted to increase by 30 percent this year. 

That is because travellers will turn from the up market hotels to the mid market ones to cut costs during the economic crisis, said Djodi Trisusanto, a property analyst, who specializes in the hotel sector, with Jones Lang Lasalle Hotels. 

He said Wednesday that there have been a number of hotel groups starting to catch up with the rising demand for budget hotels.

“The Holiday Inn, for example, has set up Holiday Inn Express. Even the budget aircraft operator Air Asia has turned to the rising market by establishing the Tune Hotel in Malaysia. A number of Indonesian hotel groups have also set up  budget hotels.

“Among them, is Formula One. The other one is the Santika Hotel Group, which will set up Amaris hotels in several towns of Indonesia,” said Djodi, who is also the vice president of Jones Lang Lasalle.

He said that Air Asia and the Santika Hotel group will also join together to build budget hotels in Bali. 

“Both of them have bought landsites for hotel construction in Bali,” he noted.

According to him, the economic crisis has forced companies to cut their costs, including their traveling costs, causing them to turn to two or three star hotels instead of five star hotels as they did previously.

“During the last few months the five star hotels have seen their occupancy rate dropping by around 15 percent. 

“As the global economic crisis starts to bite into the Indonesian economy, I expect (these rates) to decrease significantly this year,’ he said on the sideline of a media briefing on the 2009 property outlook.

Despite the economic crisis, the companies will still need to travel for their businesses. But they will do so using two or three star hotels instead of five star hotels. 

“It happens not only in Indonesia. It’s been growing in China, countries of Europe, and America,” he noted.

“Frequency of business traveling will not be affected significantly as firms still need it for their businesses. But they will use budget hotels instead of luxury ones. Some flight companies have even increased the frequencies of flight schedules. Cathay Pacific, for example, has increased its flight frequency to Bali,” he added.

Meanwhile, Anton Sitorus, another analyst at the consultant company, predicted that overall, the growth in the property market would slow this year, with signs of a slow down already  detected in the  final quarter of last year.

The economy is predicted this year to grow by 4.7 percent, slower than  the 6.2 percent estimated for 2008.

“Due to the global economic crisis, the property market is facing slower business activities, and weaker demand, in addition to the still high interest rates. As a result, developers have had to cancel a number of property projects this year,” he said.

But he noted that the cancelled ones were those being planned, not the ones already under construction.

“For example, the ones planned to start in February this year will be rescheduled to later this year or even next year.

“But as far as we know there are no projects under construction which will be cancelled or rescheduled,” Anton said.

He said that with the economy slowing down and interest rates increasing, most people will tend to put their money into banks, instead of buying property.

Condos Canceled As Demand Dries Up

The Jakarta Globe, Dian Ariffahmi, January 20, 2009

 

Indonesia is facing a gloomy outlook in its condominium business as some property companies defer their apartment projects and return their customers’ money as demand slows, a property analyst said on Monday.

 

“The tight monetary policy [high interest rates and tighter loan approvals] has impacted on project cash flow and turned off prospective buyers,” Utami Prastiana, a property analyst from Procon Indah, said in Jakarta, adding that further delays were likely to affect the sector until mid-2009.

 

One Park Residences, which has been developed in Kebayoran Baru by PT Gandaria Permai, a subsidiary company of PT Intiland Development Tbk, has delayed its condominium project and is going to return condo buyers’ money with interest soon, he said.

 

Utami said there were two other developers which had also canceled their projects because of the crisis, but refused to name them.

 

The Rp 300 billion ($27 million) residence projects, which was previously planned to be launched in the fourth quarter last year, was canceled due to the increasing price of project materials and a lack of demand from buyers, he said.

 

“In the fourth quarter last year the country’s rate for the amount of presold condominiums declined only slightly from 0.4 percent from its previous quarter of 95.6 percent to 95.2 percent,” Utami said.

 

The declining rate, she said, would continue into the first quarter this year, and likely to balloon to between 3 to 10 percent.

 

“Condo buyers are in a wait-and-see mode and prefer to keep their plans on hold until the interest rate goes back to normal or at least decreases from the current rate,” Utami said.

 

Procon’s 2008 report stated that 8,000 new condominiums were sold in Jakarta in 2008 from a supply of 8,400. The number sharply declined from the previous year’s report which saw around 12,000 units produced and sold in the same year.

 

In 2009, projected annual net supply of around 10,000 units will have a net take up of only 6,600. About 6,100 of those units are in mostly in less preferable locations such as on the borders of Jakarta, Utami said.

 

“Developers and buyers will be more rational in their investment decisions, therefore a few projects may not be completed on time,” he said.

Analysts warn 'rusuna' may face delay or termination

Mariani Dewi ,  The Jakarta Post ,   Jakarta  |  Fri, 11/14/2008 11:13 AM   

Property analysts have warned that buyers of state-subsidized apartments (rusuna) could see the construction of their units delayed or stopped if the current economic uncertainty causes developers to lose their commitment. 

However, the housing association and government pledged the continuation of the projects. 

Anton Situros, research head at Jones Lang LaSalle property consultancy, cautioned buyers to expect a delay in the delivery of their units, or at the very worst, no delivery at all. 

He said most property developers were likely to reschedule their project completion dates, and subsidized housing developers even more so. 

"In the current uncertainty, developers are consolidating their projects. They may cancel those still at the planning stage. The apartments that are already launched may be completed, but could face a delay of a year or two," he said. 

"For big developers, the rusuna projects are showcase projects for CSR. I don't think they will make them a top priority," he said, citing the relatively low profit margin from such projects. 

The subsidized housing projects began last year and are targeting 1,000 apartments to house 350,000 low- to middle-income families. Apartment prices are capped at Rp 144 million (US$12,200). 

Wira Agus, a senior manager at consulting firm PT Property Advisory Indonesia, said the risk existed but had not been observed yet, with the impact from the economic turmoil only starting to be felt in October. 

To date, he said, the ongoing projects were still running, albeit at a slower rate. 

"In the current condition, developers may slow down the pace of construction," he said. 

"Delays of a month or two are common in Jakarta. The possibility of cancellations is what we have to worry about." 

Agus said around half of big developers received funding from banks or investors, with the money usually disbursed in stages as construction progresses. 

"Developers receive the full payment from buyers in advance and may pace their spending. Those nearing completion may be safe, but buyers with units still in the early stages of construction may have to watch out," he added. 

However, Indonesian Developers Association chairman Teguh Satria stressed that developers of sold-out subsidized housings were working at full tilt to complete the units. 

"As long as the units are sold out and buyers' bank loans are approved, developers will continue with the construction. Around 70 percent of projects are financed by loans, so developers don't want to delay, because they need the income to pay back the bank loans," Teguh said. 

Bernaldy, head of the rusuna division at the Public Housing Ministry's Formal Housing Unit, said the government was trying to reduce the financial burden on developers. 

"We value engineering. We let them minimize their designs within safety margins. The Jakarta administration has also agreed to halve the retribution fee," he said. 

Bernaldy confirmed the projects still had many takers. 

"No developer has pulled out of the subsidized housing project. There are some who have not started, but that's because of the paperwork," he said. 

He was optimistic the country was still on schedule to build 1,000 towers by 2011 as promised.

Global recession overshadows property market

The Jakarta Post, Jakarta | Mon, 11/10/2008 11:13 AM 

 

Indonesia's property sector is already feeling the pinch from the global economic downturn as demand is slowing at a time when interest rate adjustments have become a necessity for developers to keep business going, a property consultant says.

 

PT Colliers International Indonesia said over the weekend in its latest survey that the slowdown had already been evident since the end of the third quarter, in particular in Jakarta and surrounding areas, hat it continues to be felt in the fourth quarter and most likely will continue to impact into next year.

 

Bank Indonesia's benchmark interest rate currently stands at 9.5 percent, with cumulative inflation already hitting double digits in the first ten months of the year.

 

Colliers' report comes just days after a similar survey by another property consultant, PT Procon Indah, which focused on the Greater Jakarta market and said that the industry is heading for a slowdown due to increases in interest rates and the effects of inflation on prices of materials and rental costs.

 

Colliers said the industrial sector in the Greater Jakarta area, for example, had already experienced lower transaction levels in the third quarter compared to the previous quarter as export-oriented companies cut back on their investment plans amid slowing demand.

 

Average rental rates in central business districts (CBD) rose in the same period slightly from Rp 87,268 per square meter per month to Rp 88,117 per square meter.

 

The total supply for CBD office stock is now reported to be 3.9 million square meters, up from 3.71 million square meters last quarter, while occupancy rates decreased slightly down to 88.76 percent from 89.62 percent previously.

 

Supply for strata title apartments grew by 3 percent in the second quarter and 0.91 percent in quarter three. On the demand side however, out of 77,277 apartment units under construction, only 65 percent were already taken up and net absorption for apartments in the third quarter reached 459 units, declining from 551 in quarter two.

 

"With the current total units being built equivalent to about half of the total existing units and anticipating additional supply from new projects over the next two years, the apartment market will be very tough in the future," the survey says.

 

The occupancy rate for retail space is expected to decline in the fourth quarter, with shopping centers adjusting their rental rates to meet market conditions.

 

Still, retail space supply is set to increase from 3.21 million square meters in 2007 to 3.31 million square meters.

 

Meanwhile, the hotel occupancy rate nation-wide increased by 0.82 percent from the second quarter, with the five-star category dominating the market at 47.5 percent.

 

The survey reports that in the last quarter of the year hotel occupancy rates in Bali will fare better than most cities in the country -- including Jakarta and Surabaya -- due to the large local tourist potential. (dis)

Property sector heads for slowdown

The Jakarta Post, Jakarta | Wed, 11/05/2008 10:36 AM 

 

The property business in Jakarta and surrounding areas is heading for a slowdown next year due to increases in interest rates, inflation, prices of materials and rental costs, according to a property consulting company.

 

"The impacts of the global economic crisis will likely affect the domestic property sector and indications of a slowdown in supply and demand in Jakarta and its surrounding areas have already been noted since October," said head of marketing and communications at PT Procon Indah, Dini Priadi, on Tuesday.

 

On the supply side, she said, high interest rates, inflation and prices of materials had discouraged developers from continuing their projects.

 

Hendra Hartono, Procon chief business development executive, said only developers that mobilized financial resources on pre-sale payments and cash flows or on strong commitments from would-be tenants would continue their projects.

 

Dini said that the public's low purchasing power in the country, affected by high interest rates, slower economic growth and high inflation, would hurt the sector on the demand side next year.

 

Key Bank Indonesia interest rate currently stands at 9.5 percent, with accumulative inflation already hitting double digits in the first ten months of the year.

 

Meanwhile, Indonesia's economic growth target has also been adjusted in response to the global economic downturn. The government's revised 2008 state budget lowered the assumption on targeted growth for this year end to 6.46 percent, from the previous 6.8 percent.

 

Next year, the economy is earmarked in the 2009 state budget to grow by 6 percent.

 

The high interest rate, for example, has pushed the mortgage rate up to 17 percent, which will not be so attractive for potential buyers, according to Procon in its third quarterly Jakarta property market review and 2009 outlook.

 

The report says the rupiah's depreciation against the U.S. dollar also pushed up construction costs, which will affect the new supply of properties.

 

Meanwhile, the rupiah's depreciation has also boosted the cost of U.S. dollar-denominated property rentals, which will affect occupation rates of properties.

 

The value of the rupiah depreciated from Rp 9,330 against the dollar on Sept. 24 to Rp 10,850 by Tuesday.

 

While the outlook is a bit gloomy in the coming year, the property sector did fairly well in this year's third quarter, the report shows.

 

It says cumulative supply of office space at Jakarta's central business district (CBD) rose to 3.81 million square meters as of September from 3.63 million square meters as of June, while the cumulative demand increased to 3.29 million square meters from 3.21 million square meters.

 

The cumulative supply of rental apartments increased to 35,000 units from 34,460 units and the cumulative demand to 25,200 units from 24,000 units. (dis)

Summarecon to build 30,000 homes in Bekasi

The Jakarta Post, Sat, 04/26/2008 12:02

Publicly listed construction firm PT Summarecon Agung is set to expand its property business by building 30,000 houses for middle and upper-income families in West Bekasi.

President director Johannes Mardjuki said after a shareholder meeting Friday the company was optimistic the houses would sell out as the company already had experience in property projects in Jakarta and Tangerang.

The houses will be built at an investment of some Rp 275 billion (US$29.8 million), he added.

Johannes also said the company was in the process of building a 300-room hotel near Kelapa Gading Mall in North Jakarta, which was expected to start operating in the middle of 2009.

The company is also planning to construct eight levels of Plaza Summarecon Serpong office building in Serpong, Tangerang, for operation in 2008.

"The company has allocated Rp 100 billion from internal cash for the hotel's development and Rp 45 billion for the office in Serpong," he said.

Following higher demand for houses, apartments and shop-houses in Kelapa Gading and Serpong, the company recorded sales of Rp 1.03 trillion last year, up by 6 percent from Rp 965.25 billion in 2006.

Sales in the two areas accounted for 66 percent of the company's total sales last year.

"Demand for houses has increased following stronger public purchasing power and favorable interest rates," said Johannes. (JP/rff)

Authorities threatens to seal 8 unsafe parking buildings

JAKARTA (Jakarta Post): The Jakarta property management and control agency said on Tuesday it had found eight out of 22 parking buildings it recently checked unsafe.

"Those eight buildings need to be renovated with stronger structures," agency head Hari Sasongko said.

"Otherwise, we'll seal the buildings."

The investigation of 22 parking buildings, most of them in shopping malls, was carried out from Jan. 25 to 30 after an accident that saw a car drive off the Menara Jamsostek building in South Jakarta.

Hari said the buildings that were found unsafe had failed to meet minimum safety requirements set in a 2007 regulation on building structures and geotechnology planning.

The regulation says walls in parking buildings must be strong enough to withstand collisions.

Hari said the control agency had required building managers to propose and submit designs at least one month before commencing renovations.

"Their designs must be approved by an agency-appointed independent team prior to the renovations," he said.

Hari said the eight unsafe buildings included Cempaka Mas International Trade Center, Menteng Prada Apartment and up-scale mall Senayan City, all in Central Jakarta, as well as shopping centers Plaza Semanggi and Pasaraya Grande in South Jakarta.

During the investigation, Hari said the agency found another three parking buildings under renovation and 11 that had met safety standards.

Managers of the 11 parking buildings, however, were still required to submit designs.

The agency said it had conducted safety checks after a number of cars had driven off the side of two parking buildings.

The most recent accident took place last month at the Menara Jamsostek building, South Jakarta, where a 42-year-old chauffeur was killed after backing his car through a steel fence.

Two carpark accidents took place last year at Permata Hijau International Trade Center in Kebayoran Lama, South Jakarta.

A family of three was killed when their vehicle fell from the sixth floor of the carpark and the second accident occurred when a driver lost control and rolled backwards, smashing through the one meter-high wall of the spiral ramp.(mtq)

Industrial estate prices 'to remain stable'

Agustina Wayansari, The Jakarta Post, Jakarta

The price of industrial estates is likely to remain stable in Jakarta and Greater Jakarta this year due to slow demand, recent research shows.

"Considering demand is likely to remain slow this year, prices are expected to remain stable at around Rp 554,000 (approximately US$61.5) per square meter," PT Property Advisory Indonesia (Provis) associate partner Arief Rahardjo told reporters Monday.

Citing Provis' first publicized research results, Arief said industrial property in Jakarta was becoming limited and as a consequence industrial estates in Bekasi, Karawang and Purwakarta may develop new clusters expected to enter the market in 2008.

The report said demand for industrial estates after the 1997 economic crisis had slowed, showing a decline since 2006, and may remain weak this year.

The research also indicated the net purchase of industrial land in Greater Jakarta stood at 130 hectares in 2007, down some 32 percent from the previous year at 192 hectares.

"The demand slowed in 2005 with total purchases amounting to 200 hectares, and then declined to 192 hectares in 2006," said Wira Agus, the senior manager for strategic consultancy at Provis.

Arief said industrial land was generally used by automotive and steel-related industries, while industrial buildings were largely absorbed by the logistics industry.

Arief said transactions involving large industrial plots would also remain low in 2008 due to limited foreign investment, while small-scale demand had room to grow.

From 7,800 hectares of available land in 2007, the report indicated that the market only absorbed about 70 percent or 5,500 hectares.

Arief said local investors were likely to remain the main purchasers of land and buildings, followed by investors from Japan, Germany and France.

According to the report, demand for offices increased in the Greater Jakarta area last year, with demand from the telecommunications, banking, finance and insurance sectors the greatest, especially in terms of lease arrangements.

Managing partner David Cheadle said net purchasing in 2007 reached 203,600 square meters, an increase of 63 percent from 124,908 square meters the previous year.

"Most companies have leased the same buildings for some 12 years and now they want to move to better offices. Some companies may also be looking for new places due to business expansion," said Cheadle, adding that it was the right time for businesses to relocate as there were many Grade A buildings in the market.

As of December 2007, Provis reported that cumulative demand for office properties in the Central Business District (CBD) reached 2.9 million square meters, with an occupancy rate of 85.2 percent.

The report indicated that cumulative supply stood at 3.42 million square meters and the total net take up for CBD offices stood at 203,600 square meters over the year, which is the highest figure since the economic crisis in 1997.

Cheadle said the rental rate was relatively stable in the fourth quarter last year, standing at Rp 129,665 per square meter. He said the rate would most likely increase in 2008 as most landlords had decided to raise base rental and service charges by between 5 and 10 percent.