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ajor property developer PT Bumi Serpong Damai (BSD) says that it is looking to expand its business portfolio to Surabaya, with plans to develop 200 hectares of land into an industrial estate in the provincial capital of East Java.

BSD corporate secretary Hermawan Wijaya told reporters on Monday that the company had acquired 400 ha of land in the country'€™s second-largest city.

He said that of the company'€™s total land acquisition in Surabaya, the largest piece '€” around 200 ha '€” was located in Benowo.

'€œWe are planning to develop the plot of land into an industrial estate,'€ he said.

'€œHowever, we have not yet determined when we will start developing and marketing the area. For the remainder of this year, townships will remain our expansion focus and next year, we plan to focus on land acquisition.'€

Currently, BSD'€™s flagship township in South Tangerang, Banten, dominates the company'€™s revenue.

BSD, which is part of Sinarmas Land, booked Rp 3 trillion (US$256.70 million) in marketing sales as of July, having secured nearly half its targeted revenue of Rp 6 trillion.

Hermawan said that BSD City contributed around 70 percent of the total marketing sales generated during the first half of the year.

BSD generated net profits of Rp 2.56 trillion in the first six months, up by 67.24 percent year-on-year (y-o-y), which Hermawan attributed to stock market investment rather than the company'€™s actual sales performance.

The company'€™s revenue, meanwhile, fell by 17.24 percent y-o-y to Rp 2.42 trillion in the first six months of the year.

About 82 percent of BSD'€™s first-half revenue was derived from sales, while rentals and hotels contributed the remainder.

Of the total sales, 38 percent was in residential, 30 percent was in land sales, and the rest was in the developer'€™s commercial units.

'€œIt was no surprise that our sales slumped. The declining revenue was the result of inorganic income that we booked last year from joint ventures,'€ he explained.

'€œWe had a significant boost in inorganic marketing sales from joint ventures with our strategic partners, Hongkong Land Holdings Ltd., Japan'€™s Aeon Mall and Dyandra.'€

The developer saw its first-half revenue jump by around 81.25 percent y-o-y to Rp 2.9 trillion, boosted by the company'€™s substantial expansion with its joint ventures.

'€œAlso, the government'€™s new mortgage regulation and the elections [this year] also played a part in suppressing our revenue,'€ Hemawan explained.

Property firms have blamed the government'€™s most recent mortgage regulation, as well as the country'€™s macroeconomic conditions and political tension during the elections for their slow business during the first six months of the year.

The biggest pressure came from Bank Indonesia'€™s (BI) loan-to-value (LTV) regulation, which requires first-time home buyers to make a minimum down payment of 30 percent of the value of the house, while the percentage rises for additional houses. Developers argue that the regulation '€” which was introduced late last year to curb speculative buyers in the property market '€” has scared off potential buyers.

Hermawan added, however, that BSD was confident that it could end the year with satisfactory results, given that '€” unlike other developers in the country '€” BSD had already booked half of its marketing sales target for this year.