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ublicly listed property developer PT Pakuwon Jati Tbk plans to build a new shopping, hotel and apartment complex in Surabaya to meet rising demand in the country’s second-largest city, an executive at the company says.

Minarto, one of the company’s directors, said in Jakarta on Friday that Pakuwon had allocated Rp 500 billion (US$59 million) in capital expenditure to finance the new project.

He said the new tower, called Tanjungan Plaza 5, was scheduled for completion by 2013. The new building, which comprises a hotel, shopping mall and apartments would be located within the company’s 7.4-hectare Tajungan City superblock complex.

Minarto said that at present the superblock complex comprised several buildings, including Tunjungan Plaza 1, Tunjungan Plaza 2, Tunjungan Plaza 3, Tunjungan Plaza 4, Mandiri Tower, Condominium Regency and Sheraton Hotel.

“The Tunjungan Plaza 5, which will be built on a 8,000-square meter area with 50 floors, will comprise a shopping center, four-star hotel and condominiums,” he added. He said that the new building would be designed by global architectural firm Aedas, which designed Marina Bay Sands in
Singapore.

“The Tunjungan Plaza 5 construction project will begin around September or October this
year with a total investment of Rp 500 billion. But we’re not going to spend it all at once. This year
we will allocate Rp 375 billion to finance the first stage of the project,” Minarto told reporters following the company’s shareholders meeting.

He also cited revenue from the pre-construction sales which would be launched in September this year in addition to the company’s own funds that would be used to partly finance the new project.

Minarto said the expansion plan was prompted by high-demand for mall store units.

“There are nearly 100 brands, mostly foreign high-end brands, on our waiting list, that want to open their businesses at Tanjungan Plaza 4. But the occupancy rate has reached 98 percent, so the new plaza will be able to accommodate them,” Minarto said, adding that Tunjungan Plaza 5 would connect to Tunjungan Plaza 4.

Minarto said that the company’s total revenue had risen 76 percent to Rp 1.23 trillion in 2010 from
Rp 697.4 billion in 2009. Pakuwon Jati’s net profit increased by 86.6 percent to Rp 273.6 billion in 2010 from Rp 146.6 billion in 2009, he added.

According to Minarto, the company is targeting a 10 percent revenue increase this year.

Shareholders agreed in the meeting to the management’s proposal to not pay dividends for the 2010 financial results, as all earnings would be used to finance the company’s expansion projects.

Pakuwon Jati, which was established in 1982, operates several superblocks, including Pakuwon City in Surabaya and Gandaria City in Jakarta. (swd)