A Mall to be Built by Rembang Beach

Tempo Interactive, Tuesday, 02 February, 2010 | 21:02 WIB

TEMPO Interactive, Rembang:The Rembang government will build a four-storey mall at the Kartini Beach Recreational Park parking lot. “We are now planning the design,” said Hari Susanto, the Rembang branch of Regional Development Planning Agency chief, yesterday. The mall construction will need a 3.000 meter square area. The main building will be located on the east side of the parking lot and some parts of the tourism site. “The mall can attract tourists from inside and outside of the city,” Hari said.

The mall was initially intended to be located at a terminal, but Kartini Beach was chosen because it is located strategically by the beach and near the Java northern coast road. It can also support Rembang’s development. “We have potential investors,” Hari said. The problem is that the mall is also close to a traditional market, so the vendors are rejecting the plan. “We hope the regency government cancels the plan,” said Edi Purwanto, a vendor. The mall would also lead to less people going to the traditional market. According to Edi, sales have gone down in the past two years. He only earns Rp 400.000 in one week. “It will be difficult for traditional market sellers to compete with the mall,” said Karli, the Rembang Market Seller Association board member.

BANDELAN AMARUDIN

Low Cost Flats to be Built in Yogya

Wednesday, 25 February, 2009 | 11:47 WIB 

TEMPO Interactive, YOGYAKARTA:The government of the Special Region of Yogyakarta will build 192 low cost flats in Pringwulung village in Sleman, Yogyakarta, this year. 

The cost for constructing homes for low-income earners is estimated to reach Rp24 billion. 

“The concept is to build a twin block, able to accommodate 192 flats,” said Cipta Karya Housing Development Directorate General chief, Edy Priyatna, yesterday (24/2). 

According to Edy, each flat will be 27 square meters in size, with two bedrooms, one bathroom, and a kitchen. 

The bidding process will be carried out in the near future. 

BERNADA RURIT

Bekasi, Tangerang get ‘rusunami’

The Jakarta Post, BEKASI, TANGERANG | Thu, 02/12/2009 12:00 PM  

State-owned housing company Perumnas has started building four towers of subsidized, low-cost apartments (rusunami) in Bekasi, the company’s director said Wednesday. 

Center Point Apartment will occupy 1.4 hectares of land near the Jakarta-Cikampek tollgate, said Perumnas marketing director Tedy Robinson.

“We expect to complete construction of the first tower by the end of this year,” Tedy said, as quoted by Antara news agency. 

Each of the four towers will comprise 16 levels with 870 units of type-22 and type-36 apartments, which will be sold at Rp 88 million and Rp 144 million, respectively. 

Even though the apartments will be sold at low prices, he said, Perumnas would provide facilities similar to high-class apartments.

“We will build a swimming pool, hospital, shopping center and playgrounds, as well as a café and restaurant in the area.”     

He said the strategic location of Center Point Apartment had attracted many customers, with 80 percent of the units to be constructed in phase one already sold.

The apartments are located across from Bekasi Mitra Keluarga Hospital and next to the Islamic Center building and Pondok Gede boarding house for pilgrims, he said.

Tedy said the Bekasi administration supported the construction by issuing a building permit.

A Tangerang official said the administration supported the government’s program to build subsidized, low-cost apartments by building two towers in the region.

The construction of the two towers, located in Cireundeu Ciputat Timur in South Tangerang, is pressing ahead, said Muhammad Hidayat, the head of the Integrated Agency of Service and Licensing (BP2T).  

Hidayat said the Tangerang administration issued a permit on the construction and another permit on spatial planning for the two towers.

“In building the apartments, we have complied with the regulation on water reservoir areas,” he said.    

He said that the construction was responsible so long as it complied with of the analysis of environmental impact (Amdal).

The development of low-cost apartments in Bekasi and Tangerang are part of the central government’s plan to construct 1,000 towers, or 600,000 units, of subsidized apartments nationwide within the next four to five years.

The apartments are sold at a maximum price of Rp 144 million per unit to people earning less than Rp 4.5 million per month.

Half of the towers will be built in Greater Jakarta, 30 percent in cities throughout Java and the remaining 20 percent in urban areas outside Java.

The Public Housing Ministry has estimated that Jakarta will be home to around 51,000 subsidized apartment units by the end of this year.

To encourage more developers to take part in the projects, the government has offered incentives such as tax breaks and subsidies.

Budget hotels may buck property trend

Benget Besalicto Tnb. , THE JAKARTA POST, JAKARTA | Thu, 02/12/2009 11:24 AM  

Slowing up: Three towers are under construction in Central Jakarta. Weaker demand and high interest rates are slowing down growth in the property sector this year, delaying start-up dates for planned building sites. (JP/Ricky Yudhistira)

Contrary to the slowing growth of the property industry as a whole, the budget hotels market is predicted to increase by 30 percent this year. 

That is because travellers will turn from the up market hotels to the mid market ones to cut costs during the economic crisis, said Djodi Trisusanto, a property analyst, who specializes in the hotel sector, with Jones Lang Lasalle Hotels. 

He said Wednesday that there have been a number of hotel groups starting to catch up with the rising demand for budget hotels.

“The Holiday Inn, for example, has set up Holiday Inn Express. Even the budget aircraft operator Air Asia has turned to the rising market by establishing the Tune Hotel in Malaysia. A number of Indonesian hotel groups have also set up  budget hotels.

“Among them, is Formula One. The other one is the Santika Hotel Group, which will set up Amaris hotels in several towns of Indonesia,” said Djodi, who is also the vice president of Jones Lang Lasalle.

He said that Air Asia and the Santika Hotel group will also join together to build budget hotels in Bali. 

“Both of them have bought landsites for hotel construction in Bali,” he noted.

According to him, the economic crisis has forced companies to cut their costs, including their traveling costs, causing them to turn to two or three star hotels instead of five star hotels as they did previously.

“During the last few months the five star hotels have seen their occupancy rate dropping by around 15 percent. 

“As the global economic crisis starts to bite into the Indonesian economy, I expect (these rates) to decrease significantly this year,’ he said on the sideline of a media briefing on the 2009 property outlook.

Despite the economic crisis, the companies will still need to travel for their businesses. But they will do so using two or three star hotels instead of five star hotels. 

“It happens not only in Indonesia. It’s been growing in China, countries of Europe, and America,” he noted.

“Frequency of business traveling will not be affected significantly as firms still need it for their businesses. But they will use budget hotels instead of luxury ones. Some flight companies have even increased the frequencies of flight schedules. Cathay Pacific, for example, has increased its flight frequency to Bali,” he added.

Meanwhile, Anton Sitorus, another analyst at the consultant company, predicted that overall, the growth in the property market would slow this year, with signs of a slow down already  detected in the  final quarter of last year.

The economy is predicted this year to grow by 4.7 percent, slower than  the 6.2 percent estimated for 2008.

“Due to the global economic crisis, the property market is facing slower business activities, and weaker demand, in addition to the still high interest rates. As a result, developers have had to cancel a number of property projects this year,” he said.

But he noted that the cancelled ones were those being planned, not the ones already under construction.

“For example, the ones planned to start in February this year will be rescheduled to later this year or even next year.

“But as far as we know there are no projects under construction which will be cancelled or rescheduled,” Anton said.

He said that with the economy slowing down and interest rates increasing, most people will tend to put their money into banks, instead of buying property.

RI among Asia-Pacific's top expansion destinations

The Jakarta Post, Jakarta | Thu, 06/26/2008 10:39 AM

Indonesia remains attractive to expansion-minded multi-national firms despite global fallout from the U.S.' sub-prime crisis, a survey reveals.

According to a report by global real estate management firm Jones Lang LaSalle, of 15 nations surveyed in the Asia-Pacific region, Indonesia ranks sixth in a list of top destinations for business expansions -- ahead of Malaysia, Australia, Cambodia, Japan, Korea, Thailand and Hong Kong.

China topped the list, followed by India, Vietnam, the Philippines and Singapore.

Eighty-three percent of the multi-nationals said they would increase or maintain their current growth rates in the region, while 28 percent accelerated the growth of their operations in the region in this year's second quarter, the report shows. 

The survey company's CEO for regional business lines and corporate solutions John Forrest said emerging markets in Asia were the world's bright spots for growth at the moment. 

Asian countries were less affected by the sub-prime turmoil, with the property sector remaining bright, he said. 

"We're still seeing strong demand for space. However, an uncertain economic environment is forcing corporations to find smarter ways to manage their growth," Forrest said. 

Demands for commercial office spaces in Jakarta's commercial business district continued to grow, with the occupancy rate in the first quarter of this year rising 24 percent, the report shows. 

The growth was due mostly to tenant expansions, the company said. 

New office buildings in Sudirman and Kuningan in South Jakarta accounted for the bulk of leasing activity, mainly involving banking, oil-and-gas and services companies. 

Jones Lang LaSalle surveyed 30 senior corporate real-estate executives from leading multi-nationals in Asia-Pacific in the second quarter of this year. 

The survey covered three sectors -- financial services, technology and consumer goods. 

Among the three, the financial services sector was predicted to be the most aggressive this year based on data showing that 44 percent of the companies added growth plans in the first quarter of this year, and 33 percent predicted higher growth by the end of this year. 

The consumer goods sector, on the other hand, showed mixed responses, with one third of the companies saying they would expand their growth plans, another third saying they would downsize their businesses and the rest expecting to maintain their current expansion rates. 

Companies in this sector will likely look to initiate operations in the region to take advantage of promising new markets or shift current operations within it to search for lower-cost destinations. (dia)

Summarecon to build 30,000 homes in Bekasi

The Jakarta Post, Sat, 04/26/2008 12:02

Publicly listed construction firm PT Summarecon Agung is set to expand its property business by building 30,000 houses for middle and upper-income families in West Bekasi.

President director Johannes Mardjuki said after a shareholder meeting Friday the company was optimistic the houses would sell out as the company already had experience in property projects in Jakarta and Tangerang.

The houses will be built at an investment of some Rp 275 billion (US$29.8 million), he added.

Johannes also said the company was in the process of building a 300-room hotel near Kelapa Gading Mall in North Jakarta, which was expected to start operating in the middle of 2009.

The company is also planning to construct eight levels of Plaza Summarecon Serpong office building in Serpong, Tangerang, for operation in 2008.

"The company has allocated Rp 100 billion from internal cash for the hotel's development and Rp 45 billion for the office in Serpong," he said.

Following higher demand for houses, apartments and shop-houses in Kelapa Gading and Serpong, the company recorded sales of Rp 1.03 trillion last year, up by 6 percent from Rp 965.25 billion in 2006.

Sales in the two areas accounted for 66 percent of the company's total sales last year.

"Demand for houses has increased following stronger public purchasing power and favorable interest rates," said Johannes. (JP/rff)

Lippo to spend $1.2 billion on massive property project

The Jakarta Post, Jakarta   |  Fri, 04/04/2008 1:18 AM  

The country's largest integrated property developer, Lippo Group, plans to build a residential project worth US$1.2 billion in the Puri Indah Central Business District, Jakarta. 

Late last year, Lippo launched Kemang Village, an integrated city project in South Jakarta worth $880 million. 

The housing project, St. Moritz Penthouses and Residences, will be built on 120,000 square meters of land with eight boundaries stretching approximately 2.5 kilometers. 

The firm said the project would also include the erection of "Jakarta's tallest office building with 65 stories, which will be reserved for Top 500 Fortune Companies". 

"The project development will be divided into three phases, with the first stage to include the development of the first three apartment towers and shopping malls," Lippo corporate communications manager Danang Kemayan Jati said Thursday. 

He said the first phase would commence in the third quarter of 2008 for completion by 2010. The other residential towers and the main facilities are scheduled for completion by the second quarter of 2011. 

"We will build 2,600 residential units and expect to have at least 13,000 people living in this new township," Lippo director Michael Riady told reporters at the press conference. 

The township will be equipped with upmarket infrastructure such as tap water facilities and a wastewater recycling system. 

Other facilities will include shopping malls, an international standard hospital, an international school, a country club, a five-star hotel managed by The Aryaduta, a spa, cinema and fitness center, a wedding chapel, a heliport and a 6,000 square meter convention center. 

According to the director, Lippo is financing 100 percent of this mega-construction with internal funding and presales income. 

Michael said the project had a good prospects because about 45 percent of medium- to high-income young professional Indonesians prefer to live in apartments for efficiency. 

He said people from the upper classes preferred to live in the middle of the town, to get everything they needed in one location and to avoid traffic jams. 

The location is a valuable benefit of the construction, because it is on the intersection of Jakarta Ring Road, which will allow residents to commute easily in four directions on the freeways, he said. 

Michael also said future business centers would spread throughout all of Jakarta and would not be located only in the city center. 

According to Danang, Lippo will start preselling the apartments and penthouses next week. 

"We are optimistic about selling between 80 and 90 percent of the residential units in the first three towers this year," he told The Jakarta Post. 

Prices for the units range from $90,000 for a two-bedroom suite to more than $300,000 for a five-bedroom one. The limited and exclusive St. Moritz Penthouses will carry a price tag of more than $1 million for the best views and up to eight bedrooms. 

The first tower, the St. Moritz, will have only four units per floor equipped with private elevators. The second tower, the St. Tropez, which will be beside the five-star hotel, will have only six units per floor. The third tower, the Monaco, which is across from the school, will be suitable for families.(rff)

Bank to fund low-cost housing

The Jakarta Post

JAKARTA: State-owned bank Tabungan Negara has approved financial proposals for the development of four low-cost apartment buildings in Jakarta, Antara reported Monday.

The four apartment buildings are to be built in Pulogebang and Cawang, both in East Jakarta, and West Jakarta's Cengkareng and Daan Mogot areas.

"We have approved four out of 63 proposals submitted to the bank," president director Iqbal Latanro said.

Iqbal said the bank would allocate Rp 1 trillion for the construction of the buildings from the Rp 10.04 trillion allocated to it in 2008 by the government.

"However, we have to wait for instructions from the Public Housing Ministry as to when we can start providing credit to apartment owners," he said.

The central administration plans to develop several low-cost apartment buildings in Jakarta to provide proper housing for evicted squatters.

Bakrieland to offer Rp 500b in bonds

JAKARTA (The Jakarta Post) : Publicly listed property developer PT Bakrieland Development plans to issue Rp 500 billion (around US$53.2 million) in bonds.

"Some Rp 150 billion of the bonds, Series A, will be offered with a maturity of three years with an interest rate between 11.35 and 12 percent.

"The remaining Rp 350 billion, Series B, will be available with a five-year maturity profile and an interest rate of between 11.95 and 12.95 percent," president director Hiramsyah Sambudhy Thaib told a press conference Wednesday.

He said the book building period would take place from Jan. 23 to Feb. 5, with the bonds to be officially listed at the Jakarta Stock Exchange on March 3.

He said around Rp 350 billion of the proceeds would be allocated to finance several projects, mainly in the development of residential properties such as apartments and office buildings. (tin)

Ciputra plans new Rp 7t project

The Jakarta Post, Jakarta

Publicly listed property company PT Ciputra Property plans to invest Rp 7 trillion (US$747.36 million) on an integrated shopping mall, hotel and apartment project in Jakarta.

President director Candra Ciputra said Tuesday the project would underline the reputation of the Ciputra Group as one of the country's main property companies.

"The total investment for the project is realistic as we have in our possession some Rp 2 trillion in internal cash, and assets worth Rp 8 trillion," said Candra during a groundbreaking ceremony for the project.

He said the firm would only seek Rp 230 billion in loans for the development.

The project, dubbed "Ciputra World", is expected to be completed in 2010, with the company spending some $300 million for the first phase of construction.

Located on Jl. Prof. Dr. Satrio in South Jakarta, the project is expected to be wrapped up in three phases.

According to the firm's director, Artadinata Djangkar, some Rp 400 billion will be spent this year on the development.

"Through an initial public offering back in November last year, our company raised 2.1 trillion in proceeds. Some Rp 1.6 trillion of that will be used to finance the project," he said.

As a result of the new project, the company expects to triple its revenue to some Rp 750 billion this year, up from Rp 280 billion last year and Rp 268.87 billion in 2006, he said.

"Our revenue is mainly from leasing apartment units, mall outlets and hotel chains. Our average annual growth revenue is around 6 percent. But this year we're expecting more revenue from this new project," said Artadinata.

Ciputra World, which will be built on 5.5 hectares of land, will consist of a six-floor shopping mall, 290 apartments, a 200-room hotel, with 80 luxury apartments on its top floors, as well as office space and a five-story parking lot.

"One hundred and fifty of the apartment units are for leasing, and 140 units for selling. The price tag for will be around Rp 2 billion each," said Artadinata.

Ciputra Property owns Ciputra Mall & Hotel in West Jakarta and Semarang, and Apartment Somerset Grand Citra in South Jakarta.

The company recorded a profit of Rp 41.47 billion last year, up by 21.6 percent from Rp 34.09 billion in 2006.

Around 51.05 percent of the company's shares are owned by PT Ciputra Development, 0.01 percent by PT Ciputra Graha Mitra and 48.94 percent by the public. (nkn)

Tangerang plans satellite city

TANGERANG (Jakarta Post) : The Tangerang regency administration is planning to transform three coastal districts in the northern part of the regency into a new satellite city which is expected to boost the regency's revenue.

"We have commenced the plan by revising the spatial layout and the master plan to develop Kosambi, Teluk Naga and Sukadiri districts into a new business center in the northern part of the regency," the head of the regency's planning body, Benyamin Davnie, said over the weekend.

He said the administration will build residential housing complexes, industry and service areas, trading and shopping centers and hotels, apartments and recreational resorts on eight hectares of land along the coast.

However, he said the construction of the new satellite city would need Rp 20 trillion (US$2.1 billion) in investment, including the construction of an export-import sea port, infrastructure and other supporting facilities.

"If we rely merely on the regency budget, such a plan is only a dream and therefore we are offering the plan and the development concepts to some foreign and domestic investors," he said.

Benyamin said several local companies as well as foreign investors from the Netherlands, Japan, Malaysia and Singapore had indicated an interest in the project.

Despite infrastructure, CBD still good property investment

The Jakarta Post

Andhika Suryadharma, Analys,

For the average Indonesian, prices of land in the Jakarta CBD already seem sky-high. However, they are relatively cheap compared to other CBDs in the region, and there is potential yet to be unleashed.

We are at the start of 2008, a year most market analysts regard as likely to be a turbulent one. With a slow-down in the world's major economies forthcoming, emerging markets may become a safe haven. So why not invest in emerging market property?

To get a feel for the land situation in Jakarta from an international perspective, consider property prices in the CBDs of other major Asian cities.

According to the latest Asian property report from Jones Lang LaSalle, Tokyo's CBD holds the most expensive price per square meter among Asian countries, going for as much as US$34,000 (approximately Rp 310 million) per square meter.

Among cities in developing countries, the report puts the price of CBD land in Chengdu at $1,380, Delhi at $7,426, Bangkok at $2,513 and Makati City at $1,655.

Where does Jakarta fit in? Jakarta CBD is the cheapest of them all, at $1,340 (approximately Rp 12 million) per square meter.

Last year, the CBD in Jakarta experienced only a 3.1 percent year-on-year increase in prices, below Bangkok, which experienced a 3.5 percent gain, Delhi (72 percent) and Makati City (19 percent).

It is interesting to note that land in the CBDs of the latter two cities has a higher capital value than land in Jakarta, while Indonesia ranks higher than both the Philippines and India in GDP per capita (based on recent ADB data). This raises some questions about what factors determine the property value of CBDs.

Location, certainly, is among the main factors. The closer an area is to the center of day-to-day activity, the more expensive it becomes. However, that alone does not determine the price of capital value.

There are also factors such as supporting facilities, which involve accessibility to the CBD area. Examples are the CBD areas in Singapore and Hong Kong; one reason those areas are among the most expensive in the world today is the transportation facilities they offer.

You can easily reach the CBD in both cities using a variety of transportation modes, including Mass Rapid Transportation, buses, taxis, and even by bicycle or on foot. It is comfortable to get to your office by foot in Hong Kong, and it is also safe.

Another factor is tenants. Most of the high-ranking CBD areas are filled with major financial institutions and multinational companies. In Hong Kong, for example, major banks and brokerages line the Hong Kong area where the stock exchange resides. The more exclusive the area becomes, the higher the value of the land.

So what is the Jakarta CBD lacking? The tenants here are prestigious enough; it's the facilities that fall short. In terms of transportation, the busway is a good start but obviously it's not enough; a city railway system is also needed to build a transportation system accessible to everyone, in which safety for commuters is a priority.

Apart from that, there are also risks in obtaining land. Besides the difficulties in land clearance, the licensing of land ownership has been an issue, given the many reported cases in which more than one certificate is issued for a single piece of land. Hence there is the need to reduce regulatory uncertainty in order to make investments in CBD property less risky.

So, all in all, is land in Jakarta a good investment? We would say yes. Obviously a lot needs to be done, and this will need time. Transportation facilities should be upgraded, clogged traffic should be relieved and land ownership uncertainties should be minimized.

But land here is still cheap relative to the region, and with economic growth at above 6 percent and reforms underway, Jakarta should eventually catch up with other Asian cities in terms of capital values.

The writer is an equity analyst at PT Bahana Securities.

All buildings to self-audit energy efficiency: New law

The Jakarta Post, Jakarta

With an aim of securing energy supplies, the government is drafting a regulation on energy conservation that is expected to push commercial and industrial building management to start saving energy voluntarily, an official said.

The head of the energy conservation sub-directorate at the Energy and Mineral Resources Ministry, Indarti, said Tuesday the draft mandated an energy manager to audit total energy usage for all buildings and report it to the ministry every six months.

"An energy manager must know total energy waste for the building. The ministry will scrutinize it and give recommendations so buildings and plants can save energy without decreasing productivity."

The recommendations will vary with buildings' energy infrastructure in terms of cost implications, she added.

Indarti said the ministry wouldn't require reports from buildings that used only a small amount of energy.

The draft is expected to be completed next year, she said.

At present, energy audit responsibilities fall wholly on government. So far this year the ministry has examined energy usage at 68 buildings and 132 plants. Next year, when the energy audit budget drops to Rp 4 billion (US$431,732) from a current Rp 22 billion, it will examine only 16 buildings and 28 plants.

Tunggul Sirait of the Indonesian Electricity Society said the government would set up a national energy board to promote energy conservation. It will be chaired by President Susilo Bambang Yudhoyono and include representatives from industry and universities, as well as technological experts, he said.

The board is mandated by a 2007 national energy law -- Law 30 -- intended to provide a framework for conservation and renewable energy.

Conservation, according to managing director of electricity management company PT Schneider Indonesia Eddy Tjahja, was the most efficient way to ensure that energy would be there when needed.

"We can save by up to 35 percent of total energy consumption if we use electricity efficiently," he said.

Some industries, including textiles and hospitality, say they have been using special devices and monitoring their utility bills to help conserve energy since electricity costs went up in 2006. (adt)

Jamsostek to build more flats on Batam

SUMENEP, East Java (Jakarta Post): State insurance company PT Jamsostek is planning to develop 100 more low-cost apartments for workers on industrial estates on Batam Island, Riau Islands province, in the next five years.

"Housing is urgently needed in Batam since hundreds of thousands of low-income workers have occupied illegal huts which have raised serious problems for the Batam authorities," Jamsostek president Hotbonar Sinaga said here Saturday.

The construction of the new apartments will start next year.

So far Jamsostek has built two apartment blocks to accommodate some 6,000 workers on the island.

Sinaga said the government has agreed to issue a special regulation on the housing project, worth Rp 300 billion (US$32.37. Jamsostek will put aside Rp 100 billion from its 2007 and 2008 profits to finance the project.

He added that the apartments will be built on 60 hectares of land near the Muka Kuning industrial zone on the island. --JP

Builder, government offer subsidized homes

The Jakarta Post, Jakarta

Developer PT Perdana Gapuraprima launched the sale Monday of apartments in two towers to be built in Kebagusan, South Jakarta, 30 percent of which will be eligible for government subsidies under the housing-for-the-poor scheme.

"There are a range of prices, starting at Rp 96 million (US$10,322)," said president director Rudy Margono, adding that some of the apartments cost more than Rp 300 million.

Thirty percent of the apartments in each tower are priced at less than Rp 144, with eligible buyers entitled to receive a down-payment grant of up to Rp 7 million from the government and an interest subsidy of up to 5 percent on installments, said Public Housing Minister Muhammad Yusuf Asy'ari during a press conference.

"The subsidy scheme is only applicable to people in the middle and lower-income brackets," said Asy'ari, referring to the relevant government regulation, which was issued in April 2007.

Under the regulation, the government provides financial help to purchasers of low-cost apartments in a bid to encourage developers to build a total of 1,000 apartment towers for middle and low-income buyers. The government has allocated Rp 50 trillion (around US$5.4 billion) to finance the three-year scheme.

According to Asy'ari, there are three groups of potential purchasers who are eligible for assistance. The first consists of those with monthly salaries of between Rp 3.5 and Rp 4.5 million, the second, those with monthly salaries of between Rp 2.5 and Rp 3.5 million, and the third, those with salaries of Rp 1.2 to Rp 2.5 million.

Members of the first group who purchase apartments costing Rp 144 million will receive a grant of Rp 5 million for the down payment, and a subsidy of 2.5 percent on the cost of installment interest over four years.

"The buyers are not allowed to resell the subsidized apartments for profit," said Asy'ari, adding that the government was still working on a monitoring mechanism.

The new apartment development, called Kebagusan City, which is located on Jl. Baung, Kebagusan Raya, South Jakarta, marks the second stage of the 1,000 low-cost apartment tower project being promoted by the government, following the sale of apartments located in 52 towers during the first-phase earlier this year.

The construction of the two new towers, which will contain some 1,600 apartments, will start next month and is due for completion by the end of 2008.

"Besides these two towers, we will build 15 others over the next five years", said Perdana Gapuraprima corporate finance director Arvin F. Iskandar. (JP/ind)

Flats culturally suited for Indonesian people

Jakarta (ANTARA News) - Vice President Jusuf Kalla has refuted the opinion that flats are culturally not suited for Indonesian people, saying shrinking land space and increasing demand for housing required the development of flats in big cities.

"Many people have said that flats are culturally not suited for Indonesians. I think this is not true," the vice president said when opening a national working meeting of the Indonesian Developers` Association (Aperti) here on Thursday.

To support his argument, the vice president pointed at the traditional `rumah gadang` (big house) in West Sumatra and the `rumah panjang` (long house) tribal house in Kalimantan.

Kalla said rumah gadang and rumah panjang were basically flats in other forms. Each of these typically traditional houses was home to many families.

"The difference between rumah gadang or rumah panjang and flats is that the former are built in horizontal direction while the latter are built vertically, one storey on another," the vice president said adding that the concept of both kinds of dwelling was the same, namely houses for large numbers of communal families.

Kalla said that in order to overcome the problems of shrinking land space and increasing demand for housing, the only correct choice was to develop flats.

On the occasion, the vice president also promised to develop flats on the land that was once the site of Kemayoran airport.

He said the former airport site would be developed as a people`s housing complex through a flat development program.

"Kemayoran should be made a flat development center next year. It is wrong for people to divide it into lots of land illegally," he said.

He said flat development in a big city like Jakarta was a must. Horizontal houses could no longer be developed in big cities.

The vice president also called on Aperti to help develop flats. The development of low-cost houses so far by Aperti had gained significant recognition. Flats in big cities were also classified as modest houses.

Modest houses would continue to grow in line with the development of the people`s economy, he said.

"If people early in their life-time need small houses, now with higher welfare levels, they want bigger ones," Kalla said.

Indonesia`s Duta Graha eyes construction projects in middle east construction

Jakarta (ANTARA News/Asia Pulse) - Construction company PT Duta Graha Indah said it is bidding for an office building project in Bahrain and an apartment project in Ryadh.

The contract value of the office building project in Bahrain alone is estimated at around Rp500 billion (US$55.5 million), Duta Graha Finance Director Laurensius Teguh said. "We are taking part in the tenders for the two projects.

Hopefully we will emerge as winner and could start work in the two Middle East countries next year," he added.

Alam Sutera sets IPO next month for expansion

The Jakarta Post, Jakarta

Real estate and property company PT Alam Sutera Realty plans an initial public offering next month, expecting to take in Rp 340 billion (US$3.73 million) to help finance its expansion plan.

Corporate secretary Joseph Sanusi Tjong on Monday told a press conference the company would sell 2.99 billion new shares, accounting for 17.65 percent of its stake, at between Rp 105 and Rp 115 each on the Jakarta Stock Exchange.

The company will list the shares, which will be underwritten by PT Ciptadana Securities, on Dec. 18.

"We need Rp 500 billion in investment to build a mall integrated with a theme park in our real estate complex in Serpong, Tangerang, and we will use all the IPO proceeds supported with our internal cash for that project," he said.

President-director Tri Ramadi said the mall and the park will be built together on 22.75 hectares of land. The mall will have 300 outlets to be leased to retailers for a fee of around Rp 200,000 per square meter.

Alam Sutera is now developing residential and commercial property with access to the Jakarta-Merak toll road. It reported earning Rp 182.38 billion from sales in the first eight months of this year, resulting in a net profit of Rp 3.80 billion.

Sales are expected to double for the whole-year 2007, giving the company a net profit of Rp 20.08 billion.

Tjong said the company, supported by additional capital from the IPO, would boost its sales to Rp 625 billion and its net profit to Rp 100.53 billion in 2008.(nkn)

Procon says rising costs may delay property projects

The Jakarta Post, Jakarta

Rising construction costs resulting from the surge in oil prices will likely cause a delay in a number of large property projects in the country's major cities, particularly Jakarta, a property consultant says.

PT Procon Indah chief executive officer Siswanto Widjaja said Thursday that the delays would affect most types of property developments, including office and condominium projects.

"Except for retail outlets, many property projects may be delayed next year," he said, adding that the delays would affect supply over the next three years.

Siswanto said that producers of construction materials, such as cement and steel, had begun to feel the pinch from rising oil prices.

"This will continue next year and result in even bigger increases in prices," he said.

Pertamina raised the prices of fuels for commercial use by about 6 percent to take account of the rise in crude oil prices. With further increases in crude prices, fuel prices for industry will likely increase even more over the coming months. Unlike, the fuels sold to the public and households, fuels for commercial use are not subsidized.

"This phenomenon replicates what happened in 2005, when a similar rise in fuel prices took place. There was an obvious delay in construction activities, the repercussions of which we are now seeing, including in the office building market," Procon Indah strategic advisory senior manager Utami Prastiana said.

Besides surging construction costs, the parliamentary and presidential elections, which will be held in 2009, would also affect the property sector as most developers would take a wait-and-see approach.

However, Utami said that the surging fuel prices and the elections would not really affect the property market next year as both supply and demand during the year would remain stable.

According to Procon's market review, the office building market during the third quarter of this year was quite encouraging with growth in the occupancy rate and sales reaching their highest level in 10 years.

Compared to last year, she said, there had been a 5.5 percent increase in new supply of office space, while the occupancy rate had risen by 4.1 percent.

"The most stunning achievement is the level of demand for office space, which peaked at 133.4 percent in the third quarter compared to the same period last year,"

Utami added that total demand for office space for this year was projected to reach 270,000 square meters, which would represent a 117 percent increase over last year. (amr)

Mimika builds trade center

TIMIKA, Papua (Jakarta Post): The construction of a trade center and bus station on a 16-hectare plot of land has begun in Mimika.

Acting Mimika regent, Atanasius Allo Rafra, said the trade center would be the biggest in Papua province.

"The development of the trade center and bus station is one of the administration's efforts to turn Mimika into an industrial and service center in Papua," he said.

The administration, therefore, was planning to also expand Pomako Port, develop an airport and procure a number of passenger ships, he said.

The development of infrastructure in the regency is expected to attract investors to Mimika by, for example, establishing timber and seafood processing plants that export most of their products, he said.