Indonesia's Intiland Development tempers expectations for 2014
WATARU SUZUKI, Nikkei staff writer
JAKARTA -- Indonesia's Intiland Development expects slower sales this year in the wake of government controls on mortgages to cool bubbling property prices.
The mid-size developer, which derives about 70% of its revenue and profit from residential and industrial estate projects, is targeting 2.8 trillion rupiah ($230 million) this year, an 11% increase on 2013. Sales last year surged 53% on 2012 to 2.53 trillion rupiah -- 15% above target.
Intiland Development director Archied Pradono said this year's more modest growth will derive from higher property prices. He noted that the number of units sold in the first half of the year was lower than 2013, but overall sales in the first quarter stood at 635 billion rupiah -- 23% of the company's full year target. Sales have slowed since, however.
"The appetite is still there but buyers have become more aggressive in demanding bargains," says Pradono. The recent softening in residential sales follows new government regulations on mortgages requiring buyers to make higher down payments.
To diversify its portfolio, the company is developing four "superblocks" -- complexes with offices, hotels and retail areas in Jakarta, Surabaya and Tangerang. Pradono expects revenue from these integrated developments to contribute 50% of total revenue by 2016.