While residential property will remain the backbone of Sinar Mas Land, one of the country'€™s largest property developers, the company foresees industrial estates among its businesses that might enjoy significant growth this year.

Sinar Mas Land director Dhony Rahajoe said on Monday that his company expected the property business to perform better this year than last year, when the presidential election led to investment uncertainty and project holdups that constrained the industry.

'€œResidential property will remain our top sector and is expected to post significant growth this year, but industrial estates are also showing promising growth,'€ Dhony said.

The property conglomerate is the holding company for two listed Indonesian developers, Bumi Serpong Damai (BSD), which has the country'€™s largest township in Tangerang, as well as Duta Pertiwi, which operates shopping centers under the brand ITC.

'€œThere is high investment atmosphere for industrial estates, especially now there is a law stipulating factories can only be established in an industrial estate with specific waste management,'€ he said, referring to a law on industrial estates introduced in 2009.

Sinar Mas Land, which is listed on the Singapore Stock Exchange (SGX), currently operates three industrial estates, namely Karawang International Industrial City (KIIC) in Karawang, West Java; Greenland International Industrial Center (GIIC) Deltamas in Bekasi, West Java; as well as the 7-hectare BSD Technopark in Tangerang, Banten.

KIIC, according to Sinar Mas Land'€™s official website, is a joint venture with ITOCHU Corporation Japan, developed on 1,200 hectares of land. According to a previous announcement by ITOCHU, the joint venture is expected to develop an additional 200 hectares of land, which would be delivered in '€œ2014 or thereafter'€.

'€œWe are planning to expand KIIC this year by around 150 to 200 hectares because now its nearly full,'€ Dhony added.

GIIC, meanwhile, encompasses a total land area of about 1,000 hectares, divided into two zones, one around 400 hectares and the other 600 hectares. The industrial estate also includes the 200-hectare China-Indonesia Economic & Trade Cooperation Zone (KITIC) dedicated to investors from China for their Indonesian operations. Sinar Mas Land has developed the Bekasi estate in cooperation with another Japan-based firm, Sojitz Corporation.

Vivin Harsanto, head of advisory at Jones Lang Lasalle (JLL), previously said that the industrial estate sector would be the investors'€™ favorite this year, along with residential property.

She said that Greater Jakarta'€™s logistics and industrial sector was expected to show promising growth this year, with entries from foreign players hoping to develop their businesses in Indonesia and improving infrastructure availability.

JLL documentation shows that 300 hectares of new supply in the industrial property market is expected to complete this year, in addition to the current 11,500 ha of supply, with a sales rate of around 74 percent.

Another property specialist, Colliers, documented that industrial estates in Bekasi and Karawang, where Sinar Mas Land'€™s two top industrial estates are located, were marketed at higher prices compared to other locations in Greater Jakarta through last year at US$223.5 and $185 per square meter respectively.

Further, Colliers data also showed that GIIC recorded the most transactions in 2014 after Modern Cikande in Serang, Banten.

Sinar Mas Land currently has around 10,000 hectares of land banked across the nation, most located within BSD.

Sinar Mas Land, according to its 2014 first nine-month financials published on the SGX website, recorded decreased revenue of 23.7 percent to $642.4 million '€œdue to the absence of S$317.3 million in sales of land parcels to joint ventures and associated companies for further development'€. The company registered a 39.2 percent decline year-on-year in net profit of $140.81 million.

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