Pakuwon Jati business development director Ivy Wong said that the incentives could provide a good opportunity for the company to expand its market in luxury houses.

“These incentives present a good opportunity for us to focus on projects that fall under the incentives’ category,” she said during a public exposé in Jakarta on July 25.

Due to limited space, she said, the company would focus on developing high-rise residential projects in Jakarta. As for luxury landed houses, the company would focus development on its existing townships in Surabaya, East Java, Ivy said.

However, she said the company would conduct studies before starting the luxury housing projects to determine where it should build them, while continuing to add more land to its 445.4-hectare land bank.

The Finance Ministry recently issued a new tax policy for the property sector in which it increased the minimum taxable sales of property subject to luxury goods tax (PPnBM) to Rp 30 billion (US$2.12 million) from Rp 20 billion for houses and Rp 10 billion for apartments.

The ministry later followed this with more incentives when it announced on Tuesday that it would also lower the tax rates for houses and apartments priced above Rp 30 billion from 5 to only 1 percent.

The Finance Ministry’s fiscal policy head, Suahasil Nazara, said last week that the incentives were part of the government’s effort to boost demand for the luxury property industry that had been slumping for the last few years.

Moreover, he said, the incentive would hopefully boost the lower segments of the market that could, in turn, bolster other related industries such as construction, transportation and warehousing, which could bode well for the country’s economy.

The company’s finance director, Minarto Basuki, said it had set aside Rp 1 trillion this year from its internal cash to expand its land bank anywhere around Jakarta and Surabaya, as long as there was an opportunity to do so.

Ivy said the company would also continue to develop its ongoing projects, like the retail space expansions in Tunjungan Plaza and Pakuwon Mall in Surabaya.

Pakuwon Jati president director Stefanus Ridwan said that the company was also planning to start construction of a 3.6-ha superblock in Bekasi, West Java, worth Rp 2 trillion that would consist of four apartment towers, a mall and two hotel towers, as soon as it received the permit.

The superblock, he continued, could hopefully be a transit-oriented development because of its proximity to the LRT, just like the Blok M Plaza in South Jakarta, which was connected directly to the MRT.

As the company still had several ongoing projects, Ivy said it was aiming for the same marketing sales projection as last year: Rp 2.2 trillion. It was also aiming for high single-digit growth revenue this year, she said.

Minarto predicted that its revenue stream would be similar to last year’s as 52 percent of its total revenue came from the recurring income it received from hotel, retail and office space rentals, while the rest came from office, condo and landed house sales.

As of the first quarter of this year, the company’s revenue rose by 3.88 percent year-on-year (yoy) to Rp 1.71 trillion, 51.82 percent of which came from recurring income. It also booked a profit of Rp 720.96 billion, up by 28.09 percent yoy during the period.

Popular

Labubu dolls ride China soft-power wave

Indonesian islanders lose ground as islets put on sale

A democratic reckoning for global development finance