TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Astra launches property arm as diversification continues

Indonesia’s diversified conglomerate Astra International sees long-term growth in the property sector amid pressure ongoing pressure on its commodities-related units

Prima Wirayani (The Jakarta Post)
Jakarta
Thu, October 27, 2016

Share This Article

Change Size

Astra launches property arm as diversification continues

I

ndonesia’s diversified conglomerate Astra International sees long-term growth in the property sector amid pressure ongoing pressure on its commodities-related units.

The country’s third-largest company by market value on Wednesday launched its property arm Astra Property, its seventh business line, after a weak commodities sector hit its heavy equipment and finance units hard.

Astra Property believes in the long-term potential of the sector, although it is not sure about short-term growth.

“It’s why we have business lines that can fill in for each other so that we can expect more stable revenue” for the group, Astra Property chief David Iman Santosa said. “Astra’s decision to enter the sector is really for the long term.”

Last year, Astra International’s net revenues fell as all of its top three revenue contributors — automotive, financial services and heavy equipment and mining — saw income contraction.

This year, just as its core automotive business starts to show signs of recovery, steep drops in finance as well as heavy equipment and mining business lines — which are all connected to commodities loans and businesses — caused Astra International to suffer a 12 percent decline in net profits to Rp 7.1 trillion (US$546.7 million) in the first half of this year, compared to the same period a year ago.

In boosting its new property arm, Astra International has allocated around 10 percent of its Rp 13.7 trillion ($1 billion) capital expenditure this year to Astra Property, Menara Astra director Herawati Prasetyo said.

Menara Astra will be the holding company that operates under Astra Property and will parent four subsidiaries, PT Brahmayasa Bahtera, PT Samadista Karya, PT Astra Land Indonesia and PT Astra Modern Land.

Astra International is not a newcomer to the property sector as it has operated several property construction projects since 2014. “We already have several joint ventures,” Herawati said.

Astra International’s existing property projects include leased office building Menara Astra and three Anandamaya apartment towers sitting on a 2.4-hectare plot in the busy Sudirman area of Central Jakarta, a township project on a 70-hectare plot in East Jakarta and a residential complex on Jl. TB Simatupang in South Jakarta.

The Rp 8 trillion Menara Astra is being developed by Brahmayasa Bahtera, which is a joint venture company between Astra and London-listed property group Hong Kong Land, and construction is expected to be complete in early 2018.

Meanwhile, more than 91 percent of 509 luxury apartment units in Anandamaya have been sold while the occupancy of the office building will become known after it starts operations.

The Rp 26-trillion township project in East Jakarta will be run by Astra Modern Land, a joint venture between PT Astra Land Indonesia and PT Mitra Sindo Makmur, a subsidiary of publicly listed property developer PT Modern Realty.

{

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.