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Chinese investment in RI real estate dries up as property crisis hits home
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A housing complex in Jakarta is pictured on Aug. 4, 2021, close to the border with a neighboring province. (AFP/Bay Ismoyo)
C
hinese investors have been scaling back their investments in the Indonesian property sector as the East Asian giant’s developers face a property market crisis at home.
Colliers head of capital markets Steve Atherton said Chinese companies had either been cornered into divesting from their projects abroad or had simply discontinued their projects in many countries over a lack of funding. This trend included Indonesia, he said.
Some developers have received instructions from their Chinese parent companies to abandon property projects in overseas.
“We’re not seeing a lot of new, fresh mainland China capital coming into the property sector [in Indonesia] for the moment,” said Atherton in a press briefing on Wednesday.
He said that in the past five or six years, Chinese developers had been responsible for a significant quantity of investment in the Indonesian property sector, in addition to private investors and entrepreneurs who had entered the market.
These developers bought plots of land for residential clusters and, to a certain extent, bought plots for high-rise buildings in industrial and central business district areas, said Atherton.
However, that has completely changed as a result of ongoing financial pressures on the Chinese companies and their subsidiaries.
