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Keppel Land shifts focus to residential projects
Singapore-based Keppel Land Limited will shift its business focus in Indonesia to residential projects amid a decline in demand for commercial properties in Southeast Asiaâs largest economy, the companyâs top executive said
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ingapore-based Keppel Land Limited will shift its business focus in Indonesia to residential projects amid a decline in demand for commercial properties in Southeast Asia's largest economy, the company's top executive said.
Keppel Land's president for the Indonesia area, Sam Moon Thong, said in Jakarta that his company wanted to tap into the growing demand for houses from the growing middle class, especially in Greater Jakarta, which includes the surrounding areas of Bogor, Depok, Tangerang and Bekasi.
'Our focus is on the mushrooming numbers of middle to upper class people in Greater Jakarta,' he said after a topping-off celebration of the company's office tower in South Jakarta on Tuesday.
The ceremony was attended by top-ranking officials, included Investment Coordinating Board (BKPM) head Franky Sibarani and Singapore Ambassador to Indonesia Anil Kumar Nayar.
According to a statement by the company, Keppel Land, which first entered Indonesia in 1989, estimates there will be a significant increase in the demand for dwellings in Jakarta and its surroundings because of a larger population.
Greater Jakarta's population was expected to grow from 30 million people last year to 35 million by 2020, while Jakarta's population itself would increase from the 10.2 million it was last year to around 12.5 million by 2020.
The property arm of Singapore's largest multinational conglomerate, Keppel Group, will be developing around 7,000 dwellings in West Jakarta. The projects include West Vista, a high-rise residential building with shop units located along the Jakarta Outer Ring Road, and another ongoing project that is currently in the land acquisition phase. The company also has several plots of land in Bali and Surabaya, East Java, waiting to be developed.
Thong said that the demand for commercial projects has been declining in recent months because of the economic slowdown, but, he said, the market would recover again in the next few months, as the expected faster growth in the economy in the second quarter would result in a rise in the demand for commercial buildings, such as those that offer office spaces.
Keppel Land's newest office building, the International Financial Centre Jakarta Tower Two, targets multinational and local corporations seeking a prestigious business address in Jakarta's central business district. Being located on Jl. Sudirman in South Jakarta, the construction of the 48-story tower, which began in June 2012, is costing around Rp 1.2 trillion (US$86.84 million) and is planned to be completed by the first quarter of next year.
Currently, several tenants, such as Tokio Marine, Grant Thornton and Ithaca Resources, have secured premises in the tower.
BKPM head Franky Sibarani told journalists after the topping-off ceremony that he wanted to see multinational companies have their headquarters in Indonesia.
'BKPM encourages investors to see Indonesia not only as a market, but also as their production bases,' he said, adding that investments in the property sector ranked ninth in terms of size of value with $661 million in investments realized during the first half of this year.
He said the realization amount was 64 percent higher year-on-year and noted that during the last five years, the sector, which includes industrial area, housing and offices, expanded by 41 percent annually.
'Investors are highly attracted by Indonesia's property projects. That is proven by the around 430 projects that are being constructed in this first half,' he said.
Franky added that his office supported the growth by shortening the registration process for property investments from 25 days to 11 days with the BKPM's integrated one-stop services (PTSP). (prm)
