H

otel conglomerate, the Sahid Group, and high-rise property developer, the Pikko Group, announced on Wednesday a partnership to construct the tallest office building in Jakarta, with a total investment of Rp 1.5 trillion (US$163 million).

The tower, to be called the Sahid Sudirman Center, will begin construction late in May, said Hariyadi Sukamdani, vice president of the Sahid Group, which owns the publicly listed PT Hotel Sahid Jaya (SHID).

“The construction will take two years to complete,” Hariyadi told reporters.

“We are only providing the land and securing permits. Pikko will finance and build the tower.”

The 258-meter office building will have 52 stories with an additional four-level basement. The tower alone will take up 132,000 square meters in land area.

The Sahid Group, however, has prepared a 190,000-square-meter gross plot of land located in its SHID City complex in the prestigious Sudirman central business district. The immediate surroundings contain the Sahid Jaya Hotel, Sahid Sudirman Residence and Istana Sahid Apartments.

The Sahid Group will own a third of the total area — about 44,000 square meters — while Pikko will own the remaining area, according to Hariyadi.

“We will lease our part, while Pikko will sell space in the remaining area. The leasing arrangement will be included into the Sahid Group’s recurring income,” Hariyadi said.

The Pikko Group’s owner, Nio Yanthony, said his company would use internal cash and presale income to support the construction of the Sahid Sudirman Center. “We have already begun the presale.”

Office space at the Sahid Sudirman Center will be sold at around $3,000 per square meter and will be leased at around $20 per square meter per month, according to Nio.

The office space, he added, would be suitable for various companies, including banks and securities firms.

Indonesia has seen soaring demand for office space as the rapidly growing economy in recent years has boosted business growth, especially against the backdrop of the lowest-ever benchmark interest rate, easing costs for corporate expansion, property consulting firm Jones Lang LaSalle-Procon has said.

Banks, insurance, securities, manufacturing, consumer goods, oil and gas and mining firms currently require more office space in Indonesia, according to the consulting firm.

The Sahid Group conglomerate would continue its expansion in the property and hotel industries after its recent entry into the office building business, Hariyadi said.

The group would be opening a shopping center in Kuta, Bali, in June, he added.

The mall, called the Sahid Kuta Lifestyle resort, will be integrated with the company’s hotel, to be launched in November.

“The Sahid Group has invested about Rp 700 billion for the mall and hotel. Later this year, we will also enter Semarang, Padang and Surabaya,” Hariyadi explained.

The 46-year-old company is also planning to build a hotel in Yogyakarta with an investment of Rp 430 billion, and in Surabaya with Rp 230 billion.

— JP/Raras Cahyafitri