Global Business Guide Indonesia

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Joint Ventures | Investment
Graha Sarana Duta
Mr Heri Supriadi

Mr Heri Supriadi, President Director

gbg

Graha Sarana Duta was founded in 1981 and changed ownership when it was acquired by Telkom in 2001. The company provides a full range of services in the property sector such as property management, property development, construction, etc. What are the current strategies being followed to expand the organisation?

Mr Halim Santosa

We are growing both sides of our portfolio; property services and the assets. As we are a subsidiary of Telkom, we rent our office space to them as well as other companies. In the coming year we are planning on building a hotel business in the capitals of several key Indonesian provinces where we have land. In Jakarta, we are also going to build a major office block which will be mainly for our group as well as space to lease to other companies.

We are also currently seeking a partnership for property facilities management as in Indonesia the main property service companies are foreign such as Jones Lang LaSalle so we want to compete by reaching the highest international standards. We would therefore be interested in a strategic partner to build up this side of the business and contribute to raising our level of service.

Our strength is in our presence throughout Indonesia not just Jakarta but in every city in the country; this is our competitive edge over other foreign companies in the property management sector. In terms of our revenue, property management provides the majority and allows us to raise funds on the long term to invest in assets for property development and make the business really sustainable.

To date, we manage over 1 million square metres over the whole of Indonesia. In 2011 there was a significant increase from only 400,000 square metres under management in 2010. This is a much larger expansion than many of our competitors.

gbg

Considering the company’s expertise in property management in Indonesia, what new business areas in this field can we expect to see the company involved in the future?

Mr Halim Santosa

An interesting area for Indonesia as a whole and considering our land portfolio would be hotels. In cities outside of Jakarta, it is difficult to find a good hotel chain or brand. Many developers want to move into these areas but the problem is the availability of the land. However, through Telkom we have access to such land and this is an advantage for us. As the land is mainly in the centre of the cities, it is most suited to budget and three star hotels. We have been studying this with an independent consultant and we will be ready to go ahead with this sometime in 2012. We do require capital to do this so we would welcome a foreign partner to enter the hotel business in Indonesia.

Aside from this, our focus for the next three years will be on the construction and leasing of offices for Telkom and its subsidiaries.

gbg

Indonesia’s property sector suffered as a result of the Asian financial crisis and is once again showing impressive growth. What is your outlook for the future development of the sector?

Mr Halim Santosa

I think the property industry is closely linked to the economy as a whole. At the moment, Indonesia has relatively low interest rates which provide the chance to really grow the real estate industry as it keeps the demand for property high.

Prices of properties in Indonesia are still very low when compared to other countries in the ASEAN such as Malaysia or Singapore. I think that with the ongoing urbanisation of secondary cities, the demand for property will continue on an upward trend.

gbg

You have mentioned the company’s interest in working with a partner on various projects. What can you tell us about what Graha Sarana Duta is looking for in a strategic partnership?

Mr Halim Santosa

We currently have over 100 corporate clients that we serve outside of Telkom in cities such as Medan and Batam. We need a strategic partnership to tap into the corporate market further, perhaps with a foreign company that has expertise in this field. Outside of Telkom we are going to build our hotel business and offices to serve other companies as we believe that the land available from our parent company is not going to increase as the land required for telecommunication equipment is getting smaller.

In terms of what we are looking for in a partner, for the property business we need capital to develop the land. If you look at our parent company, we have experience in joint venture partnerships such as with Singtel so for our group to have foreign partnerships it is not unusual but it must be a win-win arrangement for both parties.

Secondly, we need expertise; particularly on training to develop our local talent.

Global Business Guide Indonesia - 2012

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