Construction & Real Estate
From The Report: Indonesia 2015
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As a major contributor to the country’s economy as well as a vital part of Indonesia’s future development, the construction sector today faces some major responsibilities and challenges. The segment has experienced continuous growth in recent years on the back of economic and population expansion, while also seeing an enlargement of its expertise and overall capability, with foreign partnerships often helping this growth in capacity. The real estate market began a period of consolidation in late 2014 that is likely to last through 2015. This slowdown in price rises has been welcomed, however, as indicative of a maturing of the sector as it heads off previous fears of overheating. Despite the slower pace overall, residential and industrial real estate continue to show healthy growth, with Jakarta also continuing to be the most active and international market.

This chapter contains a dialogue with Harun Hajadi, Managing Director, Ciputra, and Ervan Adi Nugroho, President-Director, Paramount Enterprise.

Articles from this Chapter

Overview

Higher budgets and major plans to expand Indonesia’s construction sector
OBG
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As a major contributor to the country’s economy, as well as a vital part of Indonesia’s future development, the construction sector today faces some major responsibilities, as well as major challenges. The segment has experienced continuous growth in recent years on the back of economic and population expansion, while also seeing an enlargement of its expertise and overall capability – with foreign partnerships also often helping this growth in capacity. This progress has been secured in the…

Overview

OBG talks to Harun Hajadi, Managing Director, Ciputra; and Ervan Adi Nugroho, President-Director, Paramount Enterprise
OBG
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Interview: Harun Hajadi, Ervan Adi Nugroho Which of Indonesia’s real estate subsectors will underpin growth in 2015 and 2016? HARUN HAJADI: There are still many big cities in Indonesia where residential property development is lacking. Planning and implementing projects in these areas will help drive sector growth moving forward. At the same time, as the new government looks to promote and develop local industries, there will be great potential and opportunity in the industrial estate sector. There…

Analysis

Collaboration between the state and private sector helping to finance construction projects in Indonesia
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Despite the major war chest of state funding Indonesia’s government has assembled from fuel subsidy cuts and other revenue raisers, Jakarta is still short of meeting the financial targets necessary to fund its ambitious infrastructure roll out. Finding ways to bridge the gap is thus a key point of discussion in the state capital. That said, one major way to meet this challenge that has already been agreed upon is through the use of public-private partnerships (PPPs). Frameworks The importance…

Analysis

Indonesia’s new regulations expanding opportunities for foreign property ownership
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With the sector booming and many more projects still to come as part of Indonesia’s drive to boost its infrastructure, foreign companies are also looking to take a slice of the country’s construction pie. In the past, entering the local market was sometimes considered challenging, but today moves to boost foreign ownership limits and major regional changes are easing the path to the Indonesian market. A. H. Marhendra, president-director of realty firm Springhill Group, told OBG, “Foreign ownership…

Overview

Driving higher demand for property in Indonesia
OBG
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After showing substantial growth across the board in recent years, the Indonesian real estate market began a period of consolidation in late 2014 that is likely to last throughout 2015. This slow down in price rises has been broadly welcomed, however, as indicative of a maturing of the sector as it heads off previous fears of over heating. Despite the slower pace overall, residential and industrial real estate continue to show healthy growth, with Jakarta also continuing to be the most active and…

Analysis

Indonesia’s affordable housing schemes providing a step up
OBG
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Unlike other global economies, Indonesia largely surfed over the 2008-09 financial crisis, with the economy bucking Western trends and going into a strong, expansionary mode – chalking up 6.5% GDP growth in 2011 and over 5% growth in the years since. This came in the wake of strong economic growth in the years prior to 2008 as well, leaving the Indonesian per capita income in 2013 at a level five times higher than it had been at the start of the new millennium. Budi Hadidjaja, president-director…

Analysis

Benefits and drawbacks to slowing development of shopping centres in Indonesia
OBG
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Following concerns that a boom in the construction of retail malls was causing increased congestion, as well as threatening the livelihoods of many smaller retail operators, in 2011 Jakarta’s then-governor Fauzi Bowo initiated a moratorium on further mall building. Since then, this moratorium has been renewed by his successors. The freeze on mall development has had a major impact on the modern retail sector in Jakarta, with the supply of new mall space now reduced to a trickle. Indeed, the only…