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Joint Ventures | Investment
Goldland Group | Mr Hendry Widjaja
Mr Hendry Widjaja

Our strategy is very much long-term oriented and shaped by an expectation that the value of property in Indonesia will continue to beat inflation for reasons such as a demographic dividend to be enjoyed for years to come as well as ongoing urbanisation

Mr Hendry Widjaja, President Director

Goldland Group is a leading property developer in Indonesia that was established in 2013 as the overarching group for longstanding business units in the property sector. What can you tell us about the group’s background and its main strategies going forward?

Our business was founded by my father, who in 1956 started his first company in Indonesia in the batik manufacturing industry before moving on to open a textiles factory in 1970 for products such as jeans. Having enjoyed success in this field, in 1973 he began acquiring landbanks in and around Jakarta as the first step towards shifting to property as the primary focus of the business. In 1982, my father sold his textile operations to concentrate on opportunities in the property sector and this remains our priority today.

Our first property development project was Taman Alfa Indah in West Jakarta – an 80-hectare landbank upon which we built 2,000 residential units. After studying in the United States, I joined the business in 1993 to initiate our second project: Palem Seni in Karawaci, Tangerang. This is also an 80-hectare property, and we have already constructed 2,000 houses with scope to develop a further 15 hectares for mixed-used real estate that includes mid and high-rise housing. The development of our third project, Puri Beta, began only three years after Palem Seni and to date has seen the completion of 1,500 units on 46 ha of land. Our latest project, Puri 11, broke ground in 2013 and stands to offer luxury residential real estate as well as premium office space.

As a group, our strategy is very much long-term oriented and shaped by an expectation that the value of property in Indonesia will continue to beat inflation for reasons such as a demographic dividend to be enjoyed for years to come as well as ongoing urbanisation. Jakarta, in particular, will also become increasingly globalised in light of the upcoming ASEAN economic integration, and the growing number of expatriates will create new demand for all kinds of property. As a business that has not yet listed, we have the flexibility to make long-term strategic decisions that maximise shareholder value as well as the agility to make swift operational and tactical decisions. Going forward our goal is to become one of the top ten property development firms in the ASEAN by return on equity.

Can you elaborate upon your latest project, Puri 11, and its current positioning and target market?

Puri 11, located at kilometre 11 on the toll road from Tomang to Tangerang, is a mixed-use development offering prime real estate for landed housing, serviced apartments, offices, hotels and malls. It is ideally located in close proximity to the government designated CBD in Puri Indah and Alam Sutera, and it is our expectation that in the future the government will build a mass rapid transport system to connect this corridor. We have owned the land for this 30 ha project for 25 years and in 2009 formed a consortium with Metland and Agung Sedayu Group – two other developers with property in the area – to construct an interchange. The positioning for Puri 11 is premium with landing housing being made available for between 5 to 8 billion IDR. Part of our motivation for targeting the upper end of the market is to avoid competing directly with other major projects nearby that seek to appeal to the middle class.

Our strategy at the moment for Puri 11 is to look for joint venture partners in developing the property’s four blocks. We see this project as a long-term investment, to be carried out over the next fifteen to twenty years. Partnering with well-established companies for joint ventures allows us to distinguish our properties from the growing number of projects in the West Jakarta corridor.

In addition to working with experienced partners, what differentiates Puri 11 within a market in which integrated property projects are becoming more common in the Greater Jakarta area?

Puri 11, as previously described is located next to two other property developments, but we approach this situation with the mindset of finding ways to complement one another as opposed to operating as competitors. Having three major projects has a clustering effect that can be effective in changing people’s mindsets about the viability of locating in a given area. For example, Puri 11 benefits from being right next door to CBDs being developed by Agung Sedayu Group and Metland, as this draws people to West Jakarta and heightens demand for other types of property such as residences nearby.

In regards to advantages unique to Puri 11, this particular property has 300 metres of frontage along the toll road and offers greater visibility that can prove beneficial to companies that take up our commercial property. Companies looking to build office buildings with their name prominently displayed also stand to take advantage of this prime location. Puri 11 also offers direct toll access in four spots, both to and from Jakarta and Tangerang – something that is not available in similar properties in Alam Sutera and Serpong.

How is your company positioned towards collaboration with international investors and foreign partners?

We are looking to join up with foreign partners for our mixed-use developments and envision future partnerships to be focused on retail, hotels and offices. At Puri 11, we have four blocks and two of which are allocated to mixed-use property, thereby creating many openings to work with a partner from overseas. Our company has already fielded interest from international companies and is firmly established as a local company of unquestionable integrity with a stellar track record in adapting to Indonesia’s property cycle. To potential partners we offer a keen understanding of the local culture and processes such as obtaining permits.

We expect our partners to have a similar level of experience, proven pedigree, and an iconic reputation in keeping with the presentation of our developments as future landmarks of Indonesian real estate. We are interested in working with foreign companies able to bring in capital and an extensive network that can be used to reach out to prospective tenants.

As a final message, what would you like Global Business Guide Indonesia’s readers to remember about your company and Indonesia?

With the world’s fourth largest population and the biggest economy in the ASEAN, Indonesia should be on the radar of any company with global aspirations. The country has a functioning democracy that should enable further economic growth to take place without being encumbered by political instability. It is my view that regional integration will come as a boon to the property sector, in part due to the potential convergence of interest rates that would lower Indonesia’s interest rates that are currently the highest in the ASEAN. Moreover, short-term challenges related to the removal of fuel subsidies are to be offset by gains in the medium-term such as greater spending on much-needed infrastructure development.

We advise foreign companies to partner with local property development firms experienced in the market’s many nuances and able to navigate the often tedious land acquisition process.

Global Business Guide Indonesia - 2015

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