Indonesia Property Industry Report - H1, 2013

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Indonesia Property Industry Report - H1, 2013

Indonesia’s property industry has been booming in recent years, with rising profits for property companies and soaring property prices throughout 2012. Though faced by the prolonged European debt crisis and global slowdown, Indonesia’s economy grew by 6.2%, coupled with increased foreign direct investment. The country’s positive economic climate in tandem with a growing middle-class have boosted domestic demand and increased developers’ confidence to continuously develop property projects in Indonesia. This has resulted in higher sales of most of the property industry’s sub-sectors as well as higher rental rates, which have increased by an average of 10%-20% during 2012.

The strong economy and improved investors’ sentiment have significantly increased demand for office space in Jakarta’s CBD area, which have shot up office rents and occupancy rate over 95% in 2012. Meanwhile, rising domestic consumption has encouraged retailers to expand their business, leading to higher occupancy levels and rental rates of retail space. The country’s improved tourism sector has also stimulated hotel development projects, ranging from 3-star to 5-star hotels.

Blessed with gains from the favourable economic conditions, property developers performed remarkably well in 2012 with new project launches and higher revenues. The sector is expected to remain firm in 2013 due to stable economic growth, controlled inflation and rising purchasing power. However, a risk to Indonesia’s property sector is the hike in the price of subsidised fuel which will result in a higher central bank interest rate, making it more expensive for Indonesians to buy a mortgage. Nonetheless, forecasters expect property prices to increase along with occupancy rates.

Key Points:

• Capitalising on the rapid economic growth and solid domestic demand, Jakarta’s CBD office market continued to expand with occupancy rates above 95% in Q1/2013.

• With conducive economic conditions and rising domestic demand, new apartment and retail projects are expected to enter the market in 2013. The average rental rates and occupancy rates are also expected to increase.

• Given the limited stock of industrial land, land prices have increased by 10.5% quarter on quarter alone in Q1/2013 with occupancy rates rising slightly to 65.9%.

• According to a survey by Bank Indonesia, housing prices in 14 major cities grew by 11% year on year and 4.8% quarter on quarter in Q1/2013 on the back of stable economic growth, controlled inflation and rising middle-income segment.

Table of Contents

1. Industry profile
1.1 Sector overview
1.1.1. Asia-Pacific
1.1.2. Indonesia
1.2 Residential sector
1.2.1. Strata-title apartments
1.2.2. Lease and serviced apartments
1.2.3. Housing
1.3 Industrial sector
1.4 Office sector
1.5 Retail sector
1.6 Hotel sector

2. Market trends and outlook
2.1 Economic indicators
2.2 Market outlook
2.3 Property financing

3. Leading players and comparative matrix
3.1 Leading players
3.1.1. PT Lippo Karawaci Tbk
3.1.2. PT Bumi Serpong Damai Tbk
3.1.3. PT Ciputra Development Tbk
3.2 Comparative matrix
3.3 SWOT analysis

4. Tables & charts

Table 1: Asia-Pacific house price index (Q1/2013)
Table 2: Asia-Pacific prime office rents and vacancy rates (Q1/2013)
Table 3: Asia-Pacific prime retail rents in shopping districts (Q1/2013)
Table 4: Indicative industrial and prime luxury residential rents (Q1/2013)
Table 5: List of future apartments for lease in Jakarta (2013–2014)
Table 6: Industrial land price and maintenance costs (Q1/2013)
Table 7: Office buildings under construction in the CBD and non-CBD areas
Table 8: Indonesia’s macroeconomic indicators (2008–2012)
Table 9: Projection of future condominium supply (2012–2014)
Table 10: Lippo Karawaci financial highlights (2008–Q1/2013)
Table 11: Bumi Serpong Damai financial highlights (2008–Q1/2013)
Table 12: Ciputra financial highlights (2008–Q1/2013)
Table 13: Selected peer comparison of key financial ratios (FY/2012)
Table 14: Forecast valuations of leading players (FY/2013)

Chart 1: Asia-Pacific residential rents (USD/month) (Q1/2012)
Chart 2: Indonesia monetary policy stance / BI rate (Jun 2006–Jun 2013)
Chart 3: GDP per capita in USD (2006–2012)
Chart 4: Composite consumer price index: housing (Jun 2011–Jun 2013)
Chart 5: Distribution of strata-title apartments (Q1/2013)
Chart 6: Average selling price of strata-title apartments based on region
Chart 7: Average rental rates of apartment for lease (Q1/2011–Q1/2013)
Chart 8: Number and value of house built by type in 2011
Chart 9: Average price per unit of house built by province (2009–2011)
Chart 10: Industrial area occupancy and rental rates in Jabobeka (Q1/2009–Q1/2013)
Chart 11: Office space occupancy and rental rates in Jakarta (Q1/2009-Q1/2013)
Chart 12: Retail space occupancy and rental rates in Jabodebek (Q1/2009-Q1/2013)
Chart 13: Distribution of hotel rooms by star rating (Q1/2013)
Chart 14: Hotel occupancy and room rates in Jabodebek (Q1/2009–Q1/2013)
Chart 15: Residential Property Price Index and Growth Rate (Q1/2009–Q1/2013)
Chart 16: Occupancy rate in the property industry (Q1/2013)
Chart 17: Consumer financing (Q1/2013)
Chart 18: Interest rate of housing loan facilities by bank group (Q1/2013)
Chart 19: Lippo Karawaci -revenue contribution (2012)
Chart 20: Bumi Serpong Damai -income statement (Q2/2012-Q1/2013)
Chart 21: Ciputra -revenue contribution (2012)

Number of pages: 30
Release Date: Tue, 23 Jul 2013