Thursday, May 22, 2008

Apartments in Jakarta, alternative residences

Back to the city! That is the dream of today's executives and young families. At a time when the city's traffic is heavily congested, living in the heart of the city is truly advantageous. Clearly not much time is wasted in going back and forth to one's office or school.

Indeed, staying in the city center is a luxury and can be quite costly. Most of the land in downtown Jakarta, which is a business and government center, is occupied by office buildings. The balance of land is up for grabs by many residents whose current number exceeds 10 million. This is one of the reasons that apartments in Jakarta are an ideal alternative.

Take Puri Casablanca, for example. This strategically located serviced apartment in South Jakarta is promoted as a home minutes from your office and with easy access to five star hotels, shopping malls and restaurants. It has short- and long-term accommodation and offers comfortable living near business centers and public facilities.

The elegantly designed apartment suites are complemented by luxurious facilities catering to the needs of international business executives and their families. One can experience the luxurious comfort and convenience of a modern city living in the heart of Jakarta's Golden Triangle.

Developers in Jakarta are rushing to build more apartments that are sold on a strata title or freehold basis or are rented out. In Kemang, South Jakarta, for example, The Mansion, Kemang Village and Nirvana are being built. Nirvana is offering exclusive residences in Kemang Raya that have an eco-home theme, which is in accordance with today's trend that emphasizes on the environment.

Nirvana Apartments stand on 4,000 square meters of land. There will be 56 units on its 14 floors, with 11 units having their own swimming pools. PT Asiana Lintas Ciptakemang, the developer, designed the apartments in the style of premium homes that have spacious rooms and imported materials. The price of each unit varies from Rp 3.1 billion to Rp 9 billion.

Also under construction in South Jakarta is the Senayan City Residence. Just like the shopping mall, the apartments are strategically located close to the SCBD (Sudirman Central Business District). The Senayan City Residence has 67 units and its total leasable area is about 15,635 square meters. Apartments are sold on 35-year ownership leases for Rp 15 million per square meter, or rented on six- or 12-month leases for between US$3,000 and $5000 per month.

Meanwhile in Mega Kuningan, prime apartments have been offered since the beginning of 2008. Oakwood Worldwide is a company headquartered in the U.S. and has been in the apartment business since 1960, with more than 30,000 high-quality apartments located in 2,000 cities in North and South America, Britain and several Asian countries. Now it is present in Indonesia under the name Oakwood Premier Cozmo Jakarta.

Michael Price, general manager of Oakwood Premier Cozmo Jakarta, said that the occupancy rate of Oakwood apartments in a number of countries was at least 80 percent. He voiced optimism about business in Indonesia as the demand for serviced apartments was high. The reason for his optimism was that Oakwood Premier Cozmo Jakarta has 40 floors with an area of 51,000 square meters built on a lot measuring 5,458 square meters. These are the most luxurious, fully furnished apartments with a five-star rating in the country. Hence, it is a profitable investment with return on investment that is guaranteed in U.S. dollars.

Kempinski Residences, meanwhile, says its location is the most strategic, located at Jl. MH Thamrin No 1. The apartments are part of Grand Indonesia, which is a super block constructed on a seven-hectare area, which is the former location of Hotel Indonesia and Hotel Inna Wisata. Here one can find the largest supermarket and shopping area, said to be the most luxurious in Indonesia, as well modern office buildings that house Bank Central Asia and Hotel Indonesia Kempinski.

The 58-floor apartment block is managed by Kempinski Hotelier, a German operator that is more than 100 years old, and is very experienced at managing old historic buildings such as hotels that cater to serving heads of state and celebrities. Kempinski Residences offer several types of apartments, from two- to three-bedroom units. The smaller unit is 123 square meters in area while the larger is 261 square meters. Prices start from Rp 1.7 billion.

The aforementioned apartments are indeed intended for the high-income segment, but that does not mean that developers have forgotten about those with less to invest as this segment consists of far more numerous customers. Downtown apartments, whether high-end or low-cost ones, are indeed in high demand because traffic jams affect everyone.

Currently developers are offering more choices, such studio apartments. Many of these sell for less than Rp 100 million each. There are also subsidized apartments, which can be found in various parts of the city. They are subsidized by the government in the form of tax cuts, money advances and low interest rates. The subsidies, however, only apply to apartments selling for a maximum of Rp 144 million. At a price base of Rp 4 million per square meter, developers often build 36-square-meter units in order to get the subsidy.

The subsidy, of course, relieves much of a customer's burden. For example, one only has to pay a Rp 21.6 million deposit for a 36-square-meter unit that is priced at Rp 144 million. The subsidy given for the loan interest also makes monthly payments lower. Instead of the normal 11 percent annual rate, a customer pays between 6 and 8.5 percent. So, the monthly payment is between Rp 700,000 and Rp 1.2 million.

When the subsidy was introduced, State Minister for Public Housing Muhammad Yusuf Asy’ari made it clear that only low-income families were entitled to the housing, which is why the prerequisites for such purchases are very tight. Many well-known developers are building this type of housing, for example PT Bakrieland Development Tbk, PT Grup Agung Podomoro and PT Perdana Gapuraprima Tbk. Indeed, their reputations are at stake because they have to provide benefits for customers of low-cost apartments while at the same time ensure quality. They also have to provide attractive facilities.

The government plans to construct 1,000 towers of subsidized apartments in the country, 50 percent of which will be in Greater Jakarta, 30 percent in Java and 20 percent outside of Java. Many may foresee economic doom and gloom with the looming price increase of fuel, essential commodity prices, etc., all of which will affect the purchasing power of almost everyone. However, one marketing director of a major developer predicted that property sales would not immediately slow down.

He referred to the country's situation two years ago when the macro economic condition was not favorable after fuel prices were increased, but the property business continued to boom. He said that the demand for property was still high and would remain so because interest rates were low and it was relatively easy to get a loan. "Next year, due to high inflation, interest rates will go up. The price of building materials will also increase next year. So, this year is the right time to look for or purchase a house or apartment," he said. (Burhanuddin Abe)

The Jakarta Post, May 22, 2008

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