P

roperty developers faced constrained business during the first half of the year, with marketing sales lagging behind target on the back of domestic economic slowdown and regulatory uncertainties.

Ciputra Development, part of major property developer Ciputra Group, booked only Rp 4.3 trillion (US$322.04 million) in sales during the first half of 2014, 40 percent of its full-year target of Rp 10.96 trillion. The figure represents a 28 percent increase from the same period last year.

'€œMost of our [first-half] sales came from apartment sales in Jakarta and office sales in Surabaya,'€ Ciputra corporate secretary Tulus Santoso told The Jakarta Post over the phone.

Ciputra, along with its two listed subsidiaries Ciputra Property and Ciputra Surya, had initially aimed to launch 12 projects this year, with land already acquired. However, the launching of the projects may be postponed as a result of the volatile market and weak economy, according to Tulus.

The firm'€™s two subsidiaries have stated their intention to review their full-year targets, especially Ciputra Property, which saw sales constrained on poor offices sales, its revenue backbone.

Agung Podomoro Land (APL), meanwhile, said that it could not yet disclose its half-year result. However, a company official said that the figure had yet to reach half of the company'€™s annual target of Rp 6 to Rp 6.5 trillion.

APL investor relations head Wibisono told reporters recently that his company had no plans to revise the target for the time being, however, despite its pre-sales suffering from weak demand.

The company, which operates Central Park mall and Pullman Hotel in Jakarta, expects to see progress from its Podomoro Park residential high-rise project in East Jakarta, according to Wibisono.

The developers'€™ first-half marketing sales resonated with recent findings by property consultant Jones Lang Lasalle (JLL), which showed how overall property demand in Greater Jakarta had slipped amid the country'€™s slowing economy, the rupiah'€™s depreciation and competition for available supply.

Residential sales faced the deepest plunge, with sales slipping by nearly 70 percent on a quarterly basis and 16 percent year-on-year.

The drop was also triggered by uncertainties in tax regulations that had been circulating since the start of the year, according to JLL head advisor Vivin Harsanto.

The government recently lowered the threshold for properties subject to a 5 percent income tax, from Rp 10 trillion to Rp 5 trillion, and also signed in May a regulation for a 20 percent luxury tax that will be imposed on apartments that have more than 150 square meters in area, or on landed houses with more than 350 square meters.

Other companies, such as Pakuwon Jati and Summarecon Agung, are ahead of others in meeting their target, having reaped more than half of their full-year marketing sales as of June.

'€œPakuwon managed to outperform other players thanks to its high recurring-income contribution, which accounts for half of the company'€™s sales,'€ Thendra Crisnanda from BNI Securities said in a report.

Pakuwon has a fixed income to counter slowdown from leasing that helped it perform better than other property developers, having pocketed Rp 2 trillion as of June,more than 58 percent of its Rp 3.4 trillion marketing sales target for the full year.