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Focus Issue: A look at Jakarta's luxury apartment market
Indonesia has quite a substantial market for luxury apartments
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ndonesia has quite a substantial market for luxury apartments. More and more projects targeted toward 'ultra-high net worth individuals' (UNHW) are coming out, such as the St. Regis, the Raffles Residence and the Anandamaya Residences.
Luxury apartments in Jakarta's golden triangle go for more than Rp 50 million per square meter. An individual can thus end up spending more than Rp 20 billion just to get an apartment in areas such as Kuningan, South Jakarta. This price doesn't include the usual 40 percent tax rates.
Then there are also special apartments filled with imported interior features, managed by renowned international operators and priced at more than Rp 75 million per square meter. Some even go up to Rp 125 million or Rp 200 million per square meter.
It is no surprise, then, that only UNHWs can afford these properties.
'For a UNHW, a luxury apartment is not only meant as a place to stay, but also as a status symbol, for prestige and for collection purposes,' Hendra Hartono, CEO of Leads Property Indonesia, was quoted in kompas.com as saying.
Another consideration UNHWs often take into account when purchasing a luxury apartment is the popularity of the neighbors.
'If the neighbor next door isn't well known or less popular, then they will reconsider. That is why luxury apartments must have a strong relationship with these moneyed classes,' Hendra said.
UNHWs are also reluctant to make purchases of an apartment if the design, the building materials, the management quality and the location aren't up to their standards.
Luxury apartment standards
The St. Regis Jakarta is one example of a building that boasts the standards of luxury apartments.
'The Residences at The St. Regis Jakarta set a brand-new standard when it comes to luxury residences in Jakarta,' according to the Rajawali Property Group.
Its CEO, Shirley Tan, even went so far as to say that The Residences at The St. Regis Jakarta is a premium residence that offers the perfection in services associated with The St. Regis brand.
'Jakarta is indeed currently filled with a number of luxury residences that are above hotel quality, but only a few of them offer the kind of perfect services associated with The St. Regis name,' Shirley said.
The Residences at The St. Regis Jakarta is located in a tower separate but next to The St. Regis Jakarta. The building consists of 164 apartments with luxurious exteriors and interiors.
Each apartment offers a warm atmosphere and a majestic view of the capital.
The residences come in three different forms. The Sky Residence has three bedrooms and ranges from 355 to 373 square meters. The Sky Villa has four bedrooms and is 750 square meters in size. Finally, the Sky Palace comes at more than 1,250 square meters.
Residents can enjoy exclusive concierge services, multi-purpose rooms, wine rooms, swimming pools, lounges, libraries, fitness centers and special parking facilities.
Apartment owners can also enjoy classic St. Regis services at their doorstep. This includes butler services and access to restaurants at The St. Regis Jakarta hotel itself.
Meanwhile, another building that touts itself as containing luxury apartments is the Anandamaya Residences.
This flagship property of PT Astra International, which is being handled by PT Brahmayasa Bahtera, has reportedly sold more than 90 percent of its residences since being launched in August 2014.
According to the head of residence development at Astra's property division, Wibowo Muljono, as reported in Bisnis.com, prices for each unit ranged from Rp 68 million to Rp 100 million per square meter.
Wibowo explained that these prices have gone up an average of 26 to 27 percent since the original launch date and are inclusive of taxes. The project is estimated to be done by 2018.
The residence itself consists of three towers built on top of 1.6 hectares of land, two of which are premium class, with one being a luxury class. These three will have a total of 509 residential units.
The luxury class apartments will vary between 216 and 360 square meters. The other two will range from 120 to 172 square meters. The apartment building is located in the World Trade Center area on Jl. Jendral Sudirman, right next to the Astra Tower, which is also currently in development.
The rich will always be in the property business
Wealthy individuals, whether in Indonesia or abroad, will almost certainly have some sort of business in property.
'Rich people around the world can be successful because they invest in the property sector,' Panangian Simanungkalit, the executive director of the Center for the Study of Property in Indonesia (PSPI), said as quoted in kompas.com.
As long as there is positive economic growth and strong demographics, the needs of property will always be on the rise. This is why property, especially homes, is an essential need.
The property business is also an investment that has the least amount of risk, whether from a business risk, an interest risk, an inflation risk, a liquidity risk, or a market risk.
Who are some well-known individuals investing in the property sector? They include Microsoft founder Bill Gates, who has purchased the Four Seasons Hotel Atlanta from Host Hotels & Resorts.
Aside from this acquisition, Gates has also shown interest in other international properties. In October 2013, he purchased 6 percent worth of shares at US$156 million from Spanish construction company Fomento de Construcciones y Contratas SA.
In December of the same year, Gates added another property to his portfolio, with the purchase of the Four Seasons Punta Mita Resort priced at $200 million from Strategic Hotels & Resorts.
Gates has also spent $18 million to purchase a horse track at Rancho Santa Fe in California in September 2014.
But what of the rich in Indonesia? The Hartono Family, on behalf of Robert and Michael from the Djarum Group organization, is the richest in the nation. Their portfolio includes the World Trade Center, Mangga Dua, the BCA Tower multifunctional building, Hotel Indonesia Kempinski, the Kempinski Residence and the Grand Indonesia Shopping Town.
Anthoni Salim from the Salim Group shook the property sector with Casa Domain and PIK Tower in Pantai Indah Kapuk. Eka Tjipta Widjaja, with Sinarmas Land, is the developer with the biggest assets in Indonesia. Eka's masterwork is BSD City.
