Having an immature market means that Indonesia’s market does not yet provide a reliable exit strategy for investors. For example, the Indonesian government encourages Foreign Direct Investment (FDI), which means that if you are a businessman, it expects you to build and own your factory.

However, as a professional businessman, you know that this FDI might be too risky because you are not familiar with the country's laws and regulations. Alternatively, you may decide that your investment will be safer if you can rent the factory. However, since Indonesia still operates its real estate market in a traditional way, it means that you might have issues with raising the necessary capital.

This is when real estate investment trusts (REITs) can be one of the solutions. Traditionally, a developer will use his own money as equity and take out loans as debt to fund a project.

This method heavily depends on the strength of the developer's finances, which we know are limited. With REITs, the developer can use investors’ money to crowdfund the project and own the factory indirectly. However, REITs in Indonesia are inefficient, experience double taxation and do not align with modern REIT models.

REITs are in a stagnant condition. The first REIT was established in 2007 with Ciptadana Asset Management as its investment manager, with Solo Grand Mall and Hotel Padjajaran Suites as its first and second underlying assets. Since then, there has been no increase in the number of REITs in Indonesia.

In 2019, Sinarmas Asset Management introduced Plaza Indonesia and FX Sudirman as its underlying assets. However, since then there are still only four properties under a REIT management scheme.