TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Analysis: Property pre-sales growth accelerates to 46% yoy in Q3

In the third quarter of this year aggregate pre-sales, excluding PT Lippo Karawaci, grew by only 11 percent quarter-to-quarter (qtq), but surged by 46 percent year-on-year (yoy)

Renaldy Effendy (The Jakarta Post)
Jakarta
Thu, October 19, 2017

Share This Article

Change Size

Analysis: Property pre-sales growth accelerates to 46% yoy in Q3

In the third quarter of this year aggregate pre-sales, excluding PT Lippo Karawaci, grew by only 11 percent quarter-to-quarter (qtq), but surged by 46 percent year-on-year (yoy). The latter compared to a 4 percent decline yoy in the second quarter.

As a result, from January to September pre-sales reached Rp 15.1 trillion (US$1.12 billion), up 11 percent yoy, accounting for 56 percent of management full-year targets for 2017.

Major property developer PT Ciputra Development (CTRA) came out as the best performer with a strong 73 percent yoy increase, followed by PT Bumi Serpong Damai (BSDE) (up 48 percent yoy) and PT Pakuwon Jati (PWON) (up 28 percent yoy).

We reiterate our overweight view on the property sector on the back of an expected recovery in 2018, which will be further supported by a low-interest rate environment. Our top picks are CTRA and BSDE, while we also see risk caused by political uncertainty.

Ciputra booked Rp 1.41 trillion in pre-sales (up 162 percent month-on-month and 189 percent yoy) in September, mostly driven by sales of its new Northwest Hills project (Rp 1.1 billion in pre-sales booked) in the Surabaya area in East Java.

The project offers attractive price ranges for houses (around Rp 8 million per square meter with a take up rate of 54 percent, or equal to 417 units sold) and shop houses (around Rp 2 billion per unit with a take up rate of 99 percent, or equal to 271 units sold).

Its pre-sales in the third quarter settled at Rp 2.31 trillion (up 33 percent qtq and 73 percent yoy), while as of September its pre-sales were valued at Rp 5.25 trillion (up 22 percent yoy), representing 62 percent of the company’s internal target for 2017. This figure compares to 61 percent of its 2016 target achieved during the first nine months of last year.

The major contributing area has shifted to Greater Surabaya (up 35 percent versus 28 percent in the January-September period of 2016) from Greater Jakarta (22 percent versus 39 percent in the January-September period of 2016).

Pakuwon posted Rp 582 billion of pre-sales in the third quarter (up 6 percent qtq and up 28 percent yoy), mostly from condominiums (70 percent), followed by landed houses (25 percent) and office space (5 percent). As such, its pre-sales in the first nine months amounted to Rp 1.79 trillion (up 11 percent yoy), 68 percent of the management’s full-year target for 2017. That compares with 70 percent share of pre-sales booked in the three quarters of 2016 of its whole-year target.

Year to date, the company has not yet launched new projects, but it plans to roll out a high-rise project on top of its Pakuwon Mall in Surabaya called La Viz. The new project targets the middle-to-upper market segment with an average selling price exceeding Rp 30 million per square meter.

Another key developer, PT Jaya Real Property, recorded Rp 625 billion in pre-sales in the July-September period (up 30 percent qtq and 14 percent yoy). This translates into overall pre-sales of Rp 1.6 trillion in the first nine months (flat yoy), representing 66 percent of the company’s full-year internal target.

In its latest projects, Jaya offers relatively smaller houses with a lower pricing point per unit, which could be used as a proxy for the middle-to-lower market (less than Rp 1 billion per unit). Overall, the non-premium area (non-Bintaro) recorded strong double-digit growth (20 to 30 percent yoy), in contrast to a 17 percent yoy drop seen in the premium area (Bintaro, including Graha Raya).

Meanwhile, PT Summarecon Agung’s pre-sales in September amounted to Rp 147 billion (down 52 percent mom and 27 percent yoy), mostly driven by low-rise residential sales (47 percent) in Bekasi and the Serpong area.

This brought its third-quarter pre-sales to Rp 545 billion (down 45 percent qtq, but up 12 percent yoy) and its accumulative nine-month pre-sales to Rp 1.99 trillion (down 10 percent yoy), 57 percent of the company’s full year internal target (against the 73 percent share of 2016 full year target seen as of September last year).

Summarecon is set to introduce in October two new clusters, namely Verdi and Vivaldi, in its new residential area in Serpong, Symphonia, with a total development area of approximately 200 hectares. Units offered are considerably smaller (72 to 144 square meters) with average selling prices ranging from Rp 1.1 billion to Rp 2.4 billion per unit and it expects to generate around Rp 300 billion from their pre-sales.

Bumi Serpong, meanwhile, recorded Rp 2.3 trillion in pre-sales in the third quarter (up 35 percent qtq and up 48 percent yoy), mostly deriving from land sales to a Chinese developer. Hence, its nine-month pre-sales reached Rp 4.8 trillion (up 17 percent yoy), accounting for 66 percent of the management’s target for 2017, similar to what it achieved as of September last year (66 percent of 2016 full-year target).

The company is positive about achieving its full-year pre-sales target after launching a year-end discount program to support its fourth-quarter pre-sales.
_____________________________

The writer is a research analyst at PT Bahana Sekuritas


{

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.