JAKARTA -- Indonesian conglomerate Lippo Group on Thursday initiated construction of a mixed-use property development outside Jakarta catering to Japanese and Korean expatriates working in the area.
Lippo Cikarang, a subsidiary of Lippo Group's property arm Lippo Karawaci, is developing Orange County on a 322-hectare site equivalent to some 440 soccer fields.
The development will house 72,000 residents eventually, and has been designed to attract some 20,000 expatriates working in the nearby industrial zones of Bekasi.
In addition to its residential towers, Orange County will have shopping malls, hospitals, hotels, Japanese schools and cultural centers, all connected by pedestrian walkways.
Lippo Cikarang is developing 19.5 hectares in the first phase, which is due for completion in 2018.
Major foreign manufacturers such as Toyota, Honda and LG Electronics have expanded capacity in Indonesia, but many areas in which foreign factories are located lack suitable accommodation. The journey to Jakarta is over 30 kms and notorious for bad traffic.
"We have come to a point where there are so many industrial zones that someone needs to support all the businesses," Lippo Cikarang President Meow Chong Loh said at Thursday's groundbreaking ceremony.
Expatriates are a key target market for Lippo Group as it increases its property developments outside Jakarta. Foreigners are prepared to pay premium prices for services, and stimulate property values outside the capital where purchasing power is lower.
Investors are flocking to Orange County while property prices remain much lower than in Jakarta. Two residential towers with about 700 units in total have already sold out in pre-sales. The developer has pocketed about $70 million from the sales, which is more than half of the company's 2013 revenue. As property prices rise, investors will profit whether they sell or rent the units.
"This(Orange County) is the hottest investment around," said a property consultant at the ceremony.