JAKARTA. PT Astra International Tbk (ASII) has officially opened its seventh business line, namely property business under the official name of Astra International Property or Astra Property.
Astra Property is likely to be serious to develop the property business, as the company will invest a worth of Rp 23 trillion on property project.
Chief of Astra Property ASII David Iman Santosa said the project includes a 70 hectare of mixed use area in Cakung, East Jakarta. “The Rp 23 trillion investment will be allocated for a 15-20 years investment. So it will not allocated at the same time in the early period of project”, David said.
ASII will work on the project through its subsidiary PT Astra Land Indonesia, which collaborates with PT Mitra Sindo Makmur. Mitra Sindo Makmur itself is the subsidiary of PT Modernland Realty Tbk (MDLN). “The 70ha area may result 1.1 million meter square of gross floor area, which can be built upon and sold off”, David said.
As an information, Astra previously had built Menara Astra office complex and Anandamaya Residences apartment. President Director of ASII Prijono Sugiarto said that the total worth of the two projects is Rp 8 trillion. “91.35% of 509 units of Anandamaya have been sold out”, he said.
ASII believes that the business expansion to property sector was a right decision. Prijono claimed that Astra had conducted in-depth researches on the demands and the prediction on property development in Indonesia before decided to expand to property business.
However, the property business will not have significant contribution to the performance of Astra Group in a short time period. In this case, Menara Astra project will likely to have contribution after the tenants utilize the office complex. The project itself is targeted to complete in 2018.
Astra Property is also preparing a housing project in the area of TB Simatupang, Jakarta, as well as developing the existing assets to develop new projects. The company is now conducting feasibility study on the project. “We change the portfolio of the property”, he said.
Director of Investa Saran Mandiri Hans Kwee said that the expansion was a right decision, on the grounds that property business can maintain financial performance when the other business lines experience low performance.
The decision also benefits investors. “The property sector has different cycles with other sectors. The business diversification will ensure the welfare of shareholders”, Hans said.
(Muhammad Farid/Translator)
