Selasa, 01/01/2008

Be Cautious of Overheating
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Be Cautious of Overheating

THE NATIONAL PROPERTY industry sees 2007 as the year of sunrise. Some say this is a blessed year, considering the Chinese conviction that 9 (2+0+0+7) is a lucky number. Will the luck still accompany us in 2008? Remember! The sum is not 9 anymore, but 0 (2+0+0+8).

Regardless the faith saying numbers could provide you with luck or misfortune, most national developers look into 2008 with vigorous optimism. It is undeniable that some publicly-listed property companies have seen either significant drop of sales or losses this year.

PT Jakarta Setiabudi International Tbk, PT Suryamas Dutamakmur Tbk and PT Hotel Sahid Jaya, to mention some, recorded losses of IDR24.18 billion, IDR3.51 billion, and IDR9.96 billion respectively. In the meantime, PT Duta Pertiwi Tbk (Sinar Mas Group) saw its asset decline from IDR4.66 trillion to IDR4.53 trillion during the period June 2006-June 2007.

However, some publicly-listed property companies enjoyed gains and drastic increase in their assets. For Ciputra Group, the asset of its subsidiary PT Ciputra Development Tbk rose from IDR4.29 trillion in June 2006 to IDR5.29 trillion in the same month of this year, while Bakrie’s property arm PT Bakrieland Development saw its asset climbing from IDR2.3 trillion in the first semester of 2006 to IDR5.29 trillion in the first semester of 2007.

In the same period PT Pakuwon Jati Tbk (Pakuwon Group) witnessed its asset soaring from IDR1.69 trillion to IDR3.13 trillion, whilst the figures for PT Summarecon Agung Tbk was from IDR1.98 trillion to IDR2.5 trillion. In the meantime PT Jaya Real Property Tbk recorded a rise from IDR1.59 trillion to IDR1.82 trillion. Such asset positions could be used as reliable measurement to see the weight in the business competition map or the prospect of a property company.

But, they could serve as a strong backup for future business expansion. An important development took place during 2007, when Ciputra made a suIDRrising strong come back after badly hit by the economic crisis in 1997. The property mogul focused on running projects abroad, such as in Vietnam, India, Malaysia, and the Middle East region.

The property tycoon is said to be less interested in developing projects in Indonesia. But it is not entirely true. In the second half of 2007, Ciputra Group simultaneously re-launched two superblock projects namely Ciputra World in Jakarta and Surabaya with total investment of approximately IDR7 trillion. Jakarta’s Ciputra World, formerly Grand Mall Ciputra, is actually a project that had been halted for 10 ten years.

As the economic crisis hit Indonesia and other Asian countries at the end of 1997, the project was effectively postponed. It is sure that the resurgence of Ciputra in the national property industry will change the property business competition map, considering the fact that other competitors like Lippo Group, which was successful in issuing the REIT units in Singapore, Agung Podomoro Group, Pakuwon Group, Bakrie Group, Duta Anggada Group, Gapura Prima Group, and other property giants have not provided signals to stop the development of their property projects.

In fact, it is expected that in 2008 the property groups will be more enthusiastic to develop new property projects, not only in Jakarta but also in other areas. A newly emerging trend shows that almost all big developers are obsessed to build fully furnished superblocks, develop a city within a city. Such mixed used properties are more saleable compared to apartments, office buildings or shopping centers built in different locations.

In the future, the property project development in Jakarta is probably focused on superblocks that are well connected with city’s infrastructures, such as roads, busways, and monorails. Although the market is predicted to still have a capacity to absorb the property projects launched in the next one to two years, oversupply will still become a serious threat to the property industry. At this point, the government should be quick in anticipating any developments in the property market by, among other things, issuing a new directive allowing foreigners to buy property in Indonesia.

The long-awaited policy should not be as far-reaching as what the Singaporean and Malaysian governments have implemented. Indeed, such a regulation should have been in place before the industry is trapped in the overheating cycle leading to the second property crash. Allowing foreign investors to buy property in Indonesia is not a nationalism-related issue. Nationalism is the creed or ideology that has created and preserved a country’s sovereignty.

The question is that could foreigners purchasing a condominium unit in Jakarta be categorized as those who threat the sovereignty of Indonesia? The answer is absolutely no. It is just like Indonesians who buy condominiums in Singapore. Until today, they have never been accused of endangering the sovereignty of the country. Instead, the Government of Singapore is grateful to Indonesians who bring in sizeable foreign exchange to the country. (Deddy H. Pakpahan)