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BSD records strong sales despite property slowdown
Property developer Bumi Serpong Damai (BSD) has pocketed Rp 5 trillion (US$415 million) in marketing sales during the first nine months of the year, or around 83 percent of the companyâs annual target, in contrast to other developers that recorded dwindling sales amid tightened mortgage regulations and an economic slowdown
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Property developer Bumi Serpong Damai (BSD) has pocketed Rp 5 trillion (US$415 million) in marketing sales during the first nine months of the year, or around 83 percent of the company's annual target, in contrast to other developers that recorded dwindling sales amid tightened mortgage regulations and an economic slowdown.
The company was close to achieving its annual marketing-sales target of Rp 6 trillion with strong sales between January and September, mostly supported by the company's flagship BSD City in Tangerang, Banten, it said in a statement published on Tuesday.
'We are optimistic that we can meet our target by the end of the year. BSD City will still be our main sales generator, followed by other new projects both in and outside Java,' Hermawan Wijaya, BSD's director and corporate secretary, said in the statement.
According to the statement, BSD City contributed Rp 3.75 trillion or 75 percent to the first nine months' marketing sales. The company's Grand Balikpapan City project in East Kalimantan was the second largest contributor with Rp 300 billion, or around 6 percent of the total figure.
To meet the annual target, Hermawan said the BSD had partnered with multinational developer Hongkong Land to develop a 68-hectare premium area in BSD City, starting in August.
'We also have Rp 1.2 trillion unused capital expenditure [capex] funds out of a total Rp 3 trillion [that was allocated] for this year, which can be used to develop other projects,' Hermawan said.
With the first nine months' figure, the company is ahead of other developers in meeting its annual net sales target.
The country's publicly listed developers ' such as Agung Podomoro Land, Intiland and Pakuwon Jati ' saw their third-quarter marketing sales fall below their targets.
Ciputra Surya, part of giant developer Ciputra Development, has decided to trim down its marketing sales target by around 18 percent to Rp 1.8 trillion, from an initial target of Rp 2.2 trillion.
The nation's property industry has been under pressure from rising interest rates and Bank Indonesia's (BI) loan-to-value regulation, which contains a stricter down payment mechanism ' leading to lower purchasing power among potential buyers.
The regulation, which was introduced last October, requires a minimum down payment of 30 percent of a property's value for first-time buyers for landed houses and apartments covering more than 70 square meters.
'BSD recapitulated a better sales performance compared to other developers, probably because of its well-known name and strong business portfolio. Hence, investors are still highly interested in purchasing the developer's property despite the slowdown in the industry,' MNC Securities analyst Reza Nugraha said.
Despite having inched closer to its annual target, BSD's first nine months' figure is actually 23.45 percent lower than the Rp 6.48 trillion generated in the same period last year. Last year, BSD booked inorganic marketing sales from joint ventures with Hongkong Land, Japan's Aeon Mall and Dyandra, which contributed to a 72 percent jump in its overall marketing sales of Rp 7.35 trillion last year.
While the residential segment remained the main sales generator between January and September this year, contributing 41 percent to the total marketing sales figure, residential sales plunged by 40.76 percent year-on-year to Rp 2.02 trillion in the third quarter.
'JP/Anggi M. Lubis
