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Listed property firm to develop industrial, resort zones in Indonesia

Publication Date : 28-03-2014

 

Publicly listed developer PT Jababeka Tbk. plans to develop several areas across the archipelago into industrial and resort zones integrated with residential centers.

Currently, the company is working on developing several areas in provinces such as Banten, Central Java and North Maluku.

“We would like to develop cities that are ‘independent’ like Kota Jababeka in Cikarang [east of Jakarta],” Jababeka president director SD Darmono said during a press briefing on Thursday.

With more than 1,500 companies operating in Jababeka Industrial Estate, Kota Jababeka is, according to Darmono, independent from its surroundings. Kota Jababeka, located in Cikarang, West Java, now has more than 100 grade schools and universities, 33,000 houses and several entertainment centers and hospitals.

Darmono added that Kota Jababeka would be the blueprint for the development of its next industrial and resort areas.

“Tanjung Lesung [in Banten], Morotai Island [in Maluku] and Kendal [in Central Java] are some of the projects we are currently developing,” said the company’s corporate secretary Muljadi Suganda.

“We develop the area into a certain type of township depending on what potential it has,” he said. While Kendal, like Kota Jababeka, will be built into an industry-based township, other areas in the project might be turned into tourist hotspots, like Tanjung Lesung.

The industrial complex in Kendal, which will start construction this year, will be built like Kota Jababeka, an industry-based township complete with residential areas.

The 300-hectare complex is a joint venture with Singapore-based Sembawang Development Ltd.

“We will invest up to 500 billion rupiah [US$43.67 million] this year for the industrial complex development in Kendal,” said Muljadi.

According to Darmono, Morotai Island, located only 2,400 kilometers from Taiwan, was a strategic place to develop as a logistics center to increase connectivity in eastern Indonesia.

“Not only [is the island a strategic business destination], Morotai is also a beautiful place for a getaway. We have built several resorts there and are planning to build more,” said Darmono, declining to reveal how much the company would invest to develop the area.

Jababeka is also developing a resort area in Tanjung Lesung, including several hotels as well as exhibition centers and golf courses. Last year, the company invested $50 million in developing the area.

However, according to Darmono, there were several difficulties that Jababeka faced in order to develop the cities.

“The main obstacle, of course, is land acquisition. We have difficulties in finding land with clear ownership or landowners that are willing to sell,” he said.

“Communities in the areas where we would like to develop are sometimes also reluctant to the idea of change.”

Aside from Kendal, Morotai and Tanjung Lesung, Darmono said there were 17 other areas in the country ready for construction. He declined, however, to disclose which cities.

Jababeka was established in 1989. Although the company’s core business is developing industry-based real estate such as Kota Jababeka, it is now also seeking to develop commercial and residential real estate.

Last year, in an attempt to pay debts and finance expansion plans, the company had planned to issue $350 million in bonds but did not go through due to market volatility, Muljadi said.

 

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