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BSD eyes big bucks in commercial segment
All smiles: Bumi Serpong Damai director Hermawan Wijaya (center) poses with Sinarmas Land director Igneszj Kemalawarta (left) and Presidential Office managing director Dhony Rahajoe on the sidelines of the Sinarmas Land Outlook 2017 event in Jakarta on Tuesday
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span class="caption">All smiles: Bumi Serpong Damai director Hermawan Wijaya (center) poses with Sinarmas Land director Igneszj Kemalawarta (left) and Presidential Office managing director Dhony Rahajoe on the sidelines of the Sinarmas Land Outlook 2017 event in Jakarta on Tuesday. (Antara/Audy Alwi)
Major real-estate developer Bumi Serpong Damai (BSD) is eyeing double-digit top-line growth this year to around Rp 7 trillion (US$523 million), by jacking up sales in the commercial segment.
The company — under diversified conglomerate Sinar Mas Group — set a revenue projection of around Rp 6.2 trillion to Rp 6.5 trillion in 2016, while expecting its net profit to be around Rp 1.6 trillion to Rp 2.3 trillion.
“An increase of 10 to 15 percent in revenue is possible — likewise for our net profit,” BSD director Hermawan Wijaya said Tuesday.
Bumi Serpong, he added, aimed to boost marketing sales from the commercial segment, such as office buildings, apartments, condominiums and shop houses, because sales in the residential segment — primarily targeting affluent customers — had been stagnant over recent years.
Hermawan explained that although demand for landed houses under Rp 1 billion remained high, the market segment was very sensitive to interest rate rises. Hence, the company decided to shift its focus to commercial property.
“In 2016, it was hard to sell houses above Rp 2 billion to Rp 3 billion. It was different from 2012 to 2013 where people queued [to buy houses in that price range],” Hermawan said.
This year, Bumi Serpong projects a 15.6 percent surge in marketing sales to Rp 7.23 trillion. In the commercial sector, it aims to secure Rp 2.85 trillion of marketing sales, a big jump from Rp 1.67 trillion in 2016. In the residential sector, the firm has set a lower target of Rp 3.5 trillion, from Rp 4 trillion in the previous year.
Bumi Serpong has readied three projects to cater to the commercial market. First is The Elements in Kuningan, South Jakarta, which comprises two condominium towers. Some of the apartments will be sold, while others will be leased to book recurring income.
The Elements, which was launched in the third quarter of 2015, has an estimated gross development value of Rp 1.3 trillion. It offers two-and three-bedroom apartments with prices starting at Rp 43 million per square meter.
The company claims 111 apartments have been sold in the past two years with Rp 445 billion in presales. It aims for Rp 250 billion in marketing sales this year.
Another project that Bumi Serpong is preparing for the commercial sector is the Southgate TB Simatupang project, located in Tanjung Barat, Lenteng Agung, South Jakarta, on 5.4 hectares. It will be a mixed-used development that includes retail malls, offices, serviced apartments, hotels and condominiums. The starting price is Rp 26 million per square meter.
Outside of Jakarta, Bumi Serpong is building another mixed-used development in Surabaya called Klaska Residence. The company is confident it will boost sales from the project due to its proximity to numerous universities such as Pelita Harapan University, Airlangga University and Dr. Soetomo University.
For 2017, Bumi Serpong has allocated Rp 3 trillion to Rp 4 trillion in capital expenditure (capex) for land acquisition, infrastructure development and investment in office buildings and malls.
The capex will also be used for developing residential sectors, which still account for more than 60 percent of the company’s revenue. New clusters that will be developed soon include residential areas in Nava Park, BSD City, Grand Wisata in Bekasi and Grand City in Balikpapan.
To boost sales for residential areas, Bumi Serpong plans to add more infrastructure for residents by inviting more educational institutions to BSD City, Tangerang.
Sinarmas Land managing director Dhony Rahajoe told The Jakarta Post that Walden Global Services (WGS) — a cloud and mobility solutions company based in Bandung — will start operating in February at The Breeze, BSD City.
