Senin, 04/02/2008

Prominent Developers Build Low-Cost Condominiums
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Prominent Developers Build Low-Cost Condominiums

DESPITE ITS LABEL as a prominent developer and its achievements in building dozens of apartments in several Indonesian cities, Agung Podomoro Group seems ready to expand its businesses by building low-cost condominiums in Jakarta. Is the Jakarta condominium market saturated already at this time or have the various facilities from the government encouraged them to build low-cost condominiums? Property business players in Indonesia acknowledge the extraordinary magnetic power of Trihatma K. Haliman in the years after Indonesia was hit by a severe economic crisis. His shrewdness in expanding the businesses of his Agung Podomoro Group is no longer doubtful. Any projects launched by the group sell well like peanuts. Possibly, peanuts are even less popular as compared with Trihatma’s property projects. “We know every inch of land in Jakarta,” said Trihatma.

He neither brags nor boasts. He just showed the fact. Aside from having deep knowledge about the map of the Jakarta property market, Agung Podomoro also has a deep understanding of how to promote its image as the most leading player in the property sector. A good example is the building of the low-cost condominium of Gading Nias Residences by PT Tiara Metropolitan Jaya (Agung Podomoro Group) whose ground breaking took place on February 2008.

State Minister of Housing Affairs Mohammad Yusuf Asya’ri and Jakarta Governor Fauzi Bowo officiated at the ground breaking ceremony. A full-page advertisement on the event, in a white and black format, appeared on a Jakarta-based most leading daily newspaper. The ad was intentionally printed in black and white because it was directed to low-income buyers. Also, prizes for such buyers were not like those given to buyers of luxurious condominium units that were offered by Agung Podomoro Group.

Prizes for buyers of the low-cost units were TV sets and motorcycles whose numbers were not comparable to the 6,000 condominium units offered. Regardless of all else, compared with other developers who had built low-cost condominiums before it, Agung Podomoro Group has succeeded to position itself as the leader in such projects in Jakarta. As a matter of fact, before Agung Podomoro offered its ‘low-cost condominium units’ to the public, and after President Soesilo Bambang Yudhoyono declared the program of developing low-class apartments on April 5, 2007, as many as 78 such apartments were under construction and had been built in Jakarta, Bogor, Depok, Tangerang and Bekasi.

Data at the State Ministry of Housing Affairs showed that 35 of the 78 buildings were under construction, 24 had been built, 24 were located in Marunda and 3 in Parung Panjang, while the remaining 16 apartments were in the process of detailed engineering design, permit processing, and land clearance processing, and they were located in Pulo Gebang, Cipayung, Kebagusan, Kemayoran and Kebon Jeruk. According to PT Tiara Metropolitan Jaya, Gading Nias Residences that is being built on four hectares of land in Kelapang Gading will comprise 14 towers that have 6,097 units, combined.

Nine condos will be built in the first phase, and the project is slated for completion in 2010. The apartments will be of several types namely type 21, 24.5 and 35, which are sold at Rp88 million-Rp144 million per unit. The market segments targeted are city dwellers with monthly income of Rp1.5 million-Rp3 million. Also, Agung Podomoro Group is said to have plans to build low-cost apartments in South Jakarta and that it is in the process of obtaining government permits. In the meantime, the government and a number of private developers have signed cooperation to build 1,000 low-cost apartments in different parts of Indonesia.

Several banks reportedly are ready to finance the projects. Even, Bank Tabungan Negara (Bank BTN) is committed to providing IDR1 trillion as credits for the apartments. The credits to be repaid to the bank are estimated at IDR1.3 million per month per apartment unit with one year of grace period. The credits are paid in the third year. Bank BTN has set a 13.5 percent interest but the government is willing to give subsidies so as to cut it to 10 percent.

Developers can now get special facilities from the government for building low-cost apartments. Example, the Jakarta city government has eased regulations on the permit for the building size coefficient (KLB) of low-cost apartments up to 6.0. This is why the 14 apartments of Gading Nias Residences can be built on only four hectares of land. Many more developers will no doubt build apartments in Kelapa Gading after the completion of the planned the East Canal project that will free the area from flooding.

Moreover, in relation to taxation, low-cost apartment projects are subject to the one-percent Final Income Tax as compared with the 2 percent tax of healthy simple housing projects (RSh) and the 5 percent tax of other buildings. Given the quite attractive facilities and tax rates, it is normal that prominent developers compete with one another to build low-cost apartments, all the more so that demands for houses in Indonesia have not been fully met.

Beside Agung Podomoro Group, other developers are now building low-cost apartments in Jakarta and its surrounds, namely PT Bakrieland Tbk Pulo Gebang in East Jakarta and PT Modernland Realty Tbk in Kota Modern in Tangerang. Last year, Gapura Prima Group built low-cost apartments in South Jakarta. Then, why do developers build low-cost apartments? Trihatma gave an answer that could represent the views of other developers.

During the ground breaking of Gading Nias Residences, Trihatma said that developers not always sought profits. They also wanted to give attention to the welfare of low-income earners in need of decent and quality housing. Trihatma’s remarks, however, do not imply that building low-cost condos can never generate profits since a low-cost condos is normally worth hundreds of billion rupiah. Such projects surely generate profits although they are not always big. For entrepreneurs business is business.

Developers of low-cost apartments still can make profits although they are not as big as those from medium-sized condominiums, whose market is now saturated. Will low-cost condominiums units all fall into the hands of low-income earners? Speculators could buy them all considering that at this time there is no clear regulation that limit people in how many low-cost apartment units they can buy. (Deddy H. Pakpahan)