Property developer Pembangunan Jaya Ancol, which is owned by the Jakarta administration, has arranged a strategic plan to develop its recreation business in the bay to the north of the city over the next seven years to meet growing demand.

Since it owns 552 hectares of land beside Jakarta Bay that is home to the city’s oldest theme park, the company now hopes to develop a new recreation business on an island that is to be created off the coast, which would be named “K Islet”.

It would be one of the 17 artificial islands that would be part of the biggest reclamation project in the city’s history and so far the most controversial.

Although the proposed K Islet is one of five that Jakarta Governor Basuki “Ahok” Tjahaja Purnama granted reclamation permits for, it is also one of two that submitted environmental assessment documents that were found to be flawed. Subsequently, the government imposed a temporary moratorium on the entire reclamation project to look into its environmental, legal and social ramifications.

Regardless, Jaya Ancol wants to build a number of projects on K Islet, namely a theme park, apartments, condominiums and hotels (condotels), a shopping mall, attractions and a convention hall.

To demands from the high-end market, the firm would also build a new beachfront hotel overlooking Jakarta Bay under the control of its theme park unit, Taman Impian Jaya Ancol.

“The recreation business unit is our backbone. The development plan is expected to increase our revenue and profit growth,” president director C. Paul Tehusijarana said on Thursday. The recreation unit controlled three-quarters of Jaya Ancol’s total gross revenues (EBITDA) of Rp 561.9 billion (US$42.35 million) last year.

With new project developments, the company would aim for a 39 percent compound annual growth rate (CAGR) per year and 16 percent CAGR in net profits compared to last year, so that it is expected to see its revenues and net profits reach Rp 3.7 trillion and Rp 1 trillion, respectively, in 2023.

As part of the expansion, Jaya Ancol recently opened the 3.5-kilometer-long Ancol Lagoon Beach equipped with various recreational facilities.

The company also plans to expand a number of apartment complexes and office buildings in West Ancol that are near the commercial lane to the Tanjung Priok port, followed with efforts to increase the productivity of a mixed-use area called Carnaval Beach.

Aside of the property projects, Jaya Ancol plans to add some new amusement rides and attractions to its theme park, Dunia Fantasi (Dufan).

As the company expects a rising number of visitors and residents, Jaya Ancol director Arif Nugroho said next year it would start developing a connecting railway that will have two locomotives and several cars. However, total investment needed to build the railway would only be calculated when it draws up its budget in October.

To finance the development, Jaya Ancol expects to raise Rp 300 billion from a bond issuance, which will be divided into three and five-year tenors with annual coupon rates set at 8.1 percent to 8.6 percent and 8.2 percent to 8.7 percent, respectively.

The company has appointed securities firms Mandiri Sekuritas and Indo Premier Securities as underwriters for the bond issuance.

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