Govt offers 57 TOD projects: Total sales amounting to Rp50 trillion
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Investor Daily: Pemerintah sodorkan 57 proyek TOD: Total penjualan Rp50 triliun
4 September 2020
Jakarta – Greater Jakarta is continuously flooded by transit-oriented development (TOD) property projects that are integrated with mass transportation. Now, there are at lease dozens of property projects initiated by private developers and around 57 projects initiated by the government. The value of the projects in development reaches at least around Rp66.5 trillion.
“There are 11 TOD projects near stations. The projects are initiated by the government with SOEs (State-Owned Enterprises). Now, there are still 57 locations [available], developers are invited to participate,” Housing Director General of the Public Works and Public Housing (PUPR) Ministry, Khalawi Abdul Hamid said during a virtual discussion in Jakarta recently.
He explained that the TOD concept was revived. The development is one of the solutions for millennials who want to live in the centre of the city. “TOD is great for millennials, even if it is not in the middle of the city, the transportation access is excellent,” Khalawi said.
According to the records of property business observer Panangian Sumanugkalit, there are 30 TOD housing and commercial development projects in Greater Jakarta. The largest market is dominated by SOEs with their subsidiaries in the property sector. Companies with the most projects are PT Adhi Karya Tbk, PTWijaya Kartan Tbk, PT PP Tbk, and PT Waskita Karya Tbk.
“Total sales of the 30 TOD projects is at least Rp50 trillion,” Panangian said to Investor Daily when he was contacted by Investor Daily from Jakarta recently.
He added that, out of the 30 TOD projects, most are owned by PT Adhi Karya Tbk through their subsidiary in the property sector, which is PT Adhi Commuter Property. “This cannot be separated from Adhi Karya’s role in the construction of light-rail transit (LRT) in Greater Jakarta,” he said.
In Investor Daily records, PT Adhi Commuter Property has initiated TOD projects that are integrated with railways and bus stations since 2018. Most of the TOD projects, which are called LRT City, are integrated with LRT. Until 2019, the value of the projects that are constructed by the SOE subsidiary has reached Rp32 trillion.
Projects initiated by PT Adhi Commuter Property include Bekasi-Eastern Green LRT City, Sentul-Royal Sentul Park LRT City, Jaticempaka-Gateway Park LRT City, Ciracas-Urban Signature LRT City, Green Avenue-Beaksi LRT City, CIsauk Point-Cisauk LRT City, OasePark-Ciputat LRT City, MTH 27-Cikoko LRT City, Orchid Premiere-Teber LRT City, Cibubur, Bogor Raya, Cilejit, and Sentul LRT City.
PT Adhi Commuter Property Marketing Director, Indra Syahruzza said that the prospect of TOD housing in 2020 was excellent. Mass transportation is improving, such as MRT, LRT, and high-speed trains, “So, citizens realise the benefits of housing that are near or even integrated with mass transportation, such as the housing products of LRT City,” he said during a press conference received by Investor Daily some time ago.
Regarding public interest in TOD projects, he mentioned that apartment sales in MT Haryono-The Premiere MTH LRT City had passed 70%. “Apartment sales has surpassed 70% since it was marketed in October 2019,” Indra Syahruzza said.
Another SOE subsidiary that is intensively constructing TOD projects in Greater Jakarta is PT Wijaya Karya Realty with projects worth Rp5.8 trillion. The projects are Tamansari Urban Sky in Bekasi, Tamansari Urban Suites in Bekasi and Tamansari Savega in Jakarta, Tamansari Equine in Jakarta, and Soekarno-Hatta Airport Integrated Building (retail area).
Must have a keen eye
Meanwhile, Panangian said that developers presume that TOD had its own benefits compared to regular projects, especially when property sales is supressed amid the Covid-19 pandemic. The presumption that TOD projects are the solution to fulfill the housing demand of citizens in Greater Jakarta is acceptable, as long as they are affordably priced at around Rp300 million to Rp500 million. “However, the price has long passed that. So, TOD is no longer a solution, it is a business problem,” Panangian affirmed.
According to him, property developers of TOD projects must focus on adjusting their design to meet the target market that they are aiming at. If developers do not have a keen eye in analysing and studying market demand, TOD projects that have been constructed can miss their target, which leads to the lack of occupants or the TOD projects being sold. “This means that there can be an oversupply as rent and selling prices have passed the purchasing power of the market,” Panangian said.
Besides SOE developers and SOE subsidiaries, a company that work on projects related to transportation infrastructure is PT Intiland Development Tbk (Intiland). The developer is constructing seven property projects along the Jakarta MRT corridor that are worth at least Rp14.2 trillion. Three of the projects are scheduled to be handed over from 2020 to 2022.
One of Intiland’s project is SQ Res apartment project in South Quarter in South Jakarta worth Rp2 trillion. The apartment compliments the office buildings that have been previously constructed. This project is located near Lebak Bulus LRT Station. Hence, to smooth out the construction of the project, Intiland is allocating around Rp1.2 trillion to Rp1.5 trillion for capital expenditure in 2020.
“Most [of the capital expenditure] will be utilised for new developments, such as Fifty Seven Promenade, SQ Res, and several other existing projects, including the development of a new cluster in Talaga Bestari housing,” PT Intiland Development Tbk Capital and Investment Management Director Archied Noto Pradono said during a virtual public disclosure in Jakarta recently.
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