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Jakarta Post

Property: Limited space, traffic prompt developers to embrace mixed-use concept

GOING UP: Several apartment towers and office buildings are located in one area in Kuningan, South Jakarta

Sudibyo M. Wiradji (The Jakarta Post)
Jakarta
Wed, March 21, 2018

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Property: Limited space, traffic prompt developers to embrace mixed-use concept

GOING UP: Several apartment towers and office buildings are located in one area in Kuningan, South Jakarta.(JP/Arief Suhardiman)

Integrated vertical buildings allow a city to have more open spaces.

Rapid population growth and a sharp jump in the number of motorized vehicles, coupled with the absence of an adequate public transportation system, remain a tough challenge for the increasingly urbanized Jakarta as land becoming scarce – clearly marked by population density, lack of green spaces and highly congested roads.

According to the Central Statistics Agency (BPS) Jakarta’s population in 2017 stood at 10.37 million people, compared to 10.28 million in 2016 and 10.18 million in 2015. This means, the capital welcomes an additional 269 people per day or 11 people per hour.

The population growth is followed by an unchecked number of motorized vehicles, which has exacerbated the city’s conditions.

According to data released by the Jakarta Police’s traffic unit in 2015, the number of motorized vehicles in the capital reached more than 17 million, more than 13 million of which were motorcycles and more than 3 million private cars.

The data also shows that Jakarta and its surrounding areas receive an additional 5,500 and 6,000 units of motorized vehicles per day, comprising between 4,000 and 4,500 units of motorcycles and 1,600 private cars. This means the number of motorized vehicles sees an increase of 12 percent per year.

The sharp surge has placed a heavy burden on the capital’s available roads as the city only sees a 0.01 percent growth of roads per year, which is highly imbalanced when compared to the 12 percent increase of motorized vehicles per year.

Ongoing efforts to improve Jakarta’s public transportation system by developing an Mass Rapid Transit (MRT) and light rail transit (LRT) is expected to ease congestion, but delays in developing the projects, which were actually designed in the 1990s, have been blamed for worsening traffic conditions.

So, chronic congestion is business as usual in the capital, with road users forced to struggle through pollution and traffic to reach their places of work in the morning and their homes in the evening.

Increasingly limited space and road congestion have prompted property developers to be creative. Adopting mixed-use development is considered the most feasible strategy in developing housing estate projects.

Live-work-play

Under the concept, a vertical building, for example, could have more than one function, including as an apartment tower, office, restaurant, and shopping and entertainment centers. With the integrated building built vertically, more open spaces are available in the city.

This means that most of the necessary amenities are within reach and residents are free from the trap of traffic jams and air pollution as less motorized vehicles are used.

Several other countries have been adopting the concept since 1920.

“The idea is combining offices, housing and other activities in a nearby area or even in the same building,” said a property developer who preferred to remain anonymous.

“The mixed-use building concept has also been adopted in parallel with the growing lifestyle that appreciates efficiency and being practical,” the developer said.

In Singapore, Japan, Hong Kong, the United States and several other countries, the mixed-use concept has been adopted in property projects as an integral part of their transit-oriented development (TOD).

With housing estates being integrated into an office building, shopping center and transportation network, residents can fulfill their need for “live-work-play”.

The ongoing infrastructure development in Jakarta, especially the MRT and LRT, have been seen by several companies as providing market opportunities for their own projects.

Construction firm PT Totalindo Eka Persada Tbk (TOPS), for example, has spread its wings to include property in its portfolio. It has signed a memorandum of understanding (MoU) with PD Pembangunan Sarana Jaya to develop an apartment project with a TOD concept on 1.8 hectares of land in Lebak Bulus, South Jakarta. The project, which has an estimated investment of Rp 3 trillion (US$218 million), is expected to start in the middle or by the end of 2018.

Other property developers have also taken advantage of the growing trend in mixed-use development, which attracts millennial or those that highly appreciate efficiency and practicality.

Property developer PT Jaya Real Property Tbk (JRP) is developing the 930-unit Breeze Tower, with a targeted handover in February 2019. The developer also topped off its mixed-use project, Bintaro Plaza Residence (BPR), on 29-ha of land in Pondok Aren, South Tangerang, Banten, in early 2018.

The project also adopts the TOD concept by integrating a transportation network, namely the Pondok Ranji train station.

Local diversified conglomerate CT Corp, which is owned by businessman Chairul Tanjung through its subsidiary, Trans Property, plans to develop 10 mixed-use projects in Bintaro in South Jakarta and Sidoarjo and Surabaya in East Java until the end of 2018.

Each project will be built on 4 to 5 ha of land, with an investment of some Rp 3 trillion each. On top of an apartment, the project will also include the construction of offices, a Transmart Mall, a theme park and other facilities.

Trans Property signed an MoU with the London School of Public Relations (LSPR) on the purchase of one office tower during a ground breaking ceremony on March 11. The tower will be used as a campus, with a capacity of 7,000 students.

Property Developer giant Sinar Mas Land has announced its plan to develop a mixed-use and TOD project on a 25-ha estate in BSD City, Banten. An apartment will be developed close to Cisauk railway station and include a bus terminal.

The developer, through PT Bumi Serpong Damai (BSDE), has also teamed up with a Japanese consortium led by Mitsubishi Corporation – which is engaged in automotive, commodity and property businesses – to develop premium mixed-use projects in BSD City with an estimated investment of $260 million.

BSDE and the consortium have established a joint venture called PT BSD Diamond Development, which will develop projects on 19 ha to accommodate 1,00 units of landed houses and shops. Other partners participating in the project art Hanshin Electric Railway Corporation, Nishi-Nippon Railroad Corporation and Keikyu Corporation.

The promising market for vertical residences under the mixed-use concept has also prompted other overseas property developers to develop their projects in Indonesia. Sydney-based property developer Crown Group, for example, plans to develop three mixed-use projects in North Jakarta and Surabaya.

Partnering with PT Ancol Pembangunan Jaya Ancol Tbk, Crown Group, founded by Indonesia-born Iwan Sunito, will build an apartment worth Rp 5 trillion, comprising between 2,000 and 3,000 units on 2 ha of land. The project kicked off in early 2018 and is expected to be completed in three years. Two additional projects will also be located in Jakarta and Surabaya.

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