JAKARTA– PT Bakrieland Development Tbk (IDX: ELTY), controlled by billionaire Aburizal Bakrie team up with China’ Construction First Group Corp. (CCFG) has plan to build a US$350 million residential and commercial complex in Jakarta.
Last year, the two parties announced to build property project areas in Surabaya and Jakarta with an estimated construction cost ceiling of $1 billion. Both parties are targeting the first construction to be realized in 2019.
According to the president director, Ambono Janurianto, the projects’ financing would be met from Chinese bank loans. CCFG, a subsidiary of the China Civil Engineering Construction Corporation, will manage and be the guarantor for the credit facility.
“As a partner, Bakrieland Development acts as a land provider and becomes the manager of the property area that we built with the CCFG,” he explained.
Ambono said, the company had set aside 10 hectares of land, which will comprise flats, shopping malls, a hotel and a convention hall. The development, based on a memorandum of understanding signed in 2018, would mark CCFG’ first foray into the country.
“If its a joint venture, the equity participation of Bakrieland would be 30 percent. The consequence of that scheme is that the funds, the engineering, procurement, construction and commissioning and equipment have to be provided by China,” he stated.
Recently, the unit of Bakrie Group received sanctions from the IDX for not submitting financial statements for the 2018 financial year, and has not paid the late reporting penalty. The bourse has temporarily stop the ELTY shares trading and gave an additional fine of Rp150 million.
Bakrieland has plans for the cultivation of new projects in the future and preparing to work on ten projects at once. The developer said that it would prioritize residential projects with a medium market in the short term.
One of the nine projects that Bakrieland will work on is the continued development of the Sentra Timur Residence Jakarta apartment in East Jakarta. The company aimed to develop five towers and two thousand apartment units within the next five years. The company had completed the construction the phase I with a total of six towers consisting of 2,357 units.
In addition, Bakrieland is also preparing itself for the development of six other housing projects. The housing projects include the Nirwana Hills township project in Bogor, Jungleland Village housing development project in Sentul, the Fusion 2 project in Bogor, the Bumi Tirta Pakuan development project in Bogor, the Kahuripan Nirwana project in Sidoarjo, and the Rasuna Park project in Jakarta.
“The three projects that will come as a recreational park concept are the J Bound outdoor recreation park in Bogor, a playground in the Junglefest kelaura tourist area in Bogor, and the Krakatoa Nirwana Resort tourist area in Lampung,” he added.
Bakrieland, listed on the Indonesia Stock Exchange (IDX) with a total market capitalization of Rp2.1 trillion rupiah ($146.85 million), has some well-known properties, including Bakrie Tower and Epiwalk Office Suites in South Jakarta.
Josua Pardede, an economist at PT Bank Permata Tbk (IDX: BNLI) rated that Indonesia’ growing economy, combined with urbanization and young population, offered attractive opportunities for property developers. There are approximately 80 million Indonesians aged 40 or under, according to one estimate.