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“PROPERTY INVESTMENT“PROPERTY INVESTMENTSTRATEGY IN THE GLOBALSTRATEGY IN THE GLOBAL
FINANCIAL CRISIS”FINANCIAL CRISIS”
. . , . ,. . , . ,. . , . ,. . , . ,. . , . ,. . , . ,. . , . ,. . , . ,
Prepared for:
Tjiptono Darmadji Network “Seminar Investment In Property”
at Le Meridien Hotel - Jakarta
April 14, 2009
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A FLASHBACK : PROPERTYA FLASHBACK : PROPERTY
BUSINESS IS A PRIMEBUSINESS IS A PRIMEMOVER OFMOVER OF
THE ECONOMYTHE ECONOMY
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The property
business wasstarted by ‘surviveddevelopers’ without
banking loan
The property
business is the‘prime mover’ of ‘thereal sector’ through PROPERTY BUSINESSPROPERTY BUSINESS
IS THE PRIMEIS THE PRIME
PROPERTY BUSINESS IS THE PRIME MOVER OFPROPERTY BUSINESS IS THE PRIME MOVER OF
THE ECONOMYTHE ECONOMY
The propertybusiness alsoattracted lot of
capital inflow from
the overseas
support
The propertybusiness was
restarted after IBRAgave at 70%
discount to buytheir assets
The number ofdevelopers grew
from 1000 to 1.500and became the
saviors of theeconomy
ECONOMYECONOMY
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152.50
201.20
150.0
200.0
Rp. (Triliun)
Pre Crisis Crisis Post Crisis
ACCUMULATIVE OF THE PROPERTY LOANS INACCUMULATIVE OF THE PROPERTY LOANS IN
PRE CRISIS, CRISIS & POST CRISISPRE CRISIS, CRISIS & POST CRISIS
115.43
88.17
67.2946.83
35.0032.10
25.50
67.7168.32
58.80
43.4932.2021.70
-
50.0
100.0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Tahun
Source : Bank Indonesia, PSPI April 2009
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IN YEAR 2003, MANY PEOPLE ASKS MEIN YEAR 2003, MANY PEOPLE ASKS ME
ABOUT THE POSSIBILITY OF THE 2ABOUT THE POSSIBILITY OF THE 2 ndnd
PROPERTY CRASH IN THE COUNTRYPROPERTY CRASH IN THE COUNTRY
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THERE IS NO POSSIBILITY OF THETHERE IS NO POSSIBILITY OF THE
22NDND PROPERTY CRASH IN THEPROPERTY CRASH IN THE
……
KompasKompasKompasKompasKompasKompasKompasKompasMay 6, 2003May 6, 2003May 6, 2003May 6, 2003May 6, 2003May 6, 2003May 6, 2003May 6, 2003
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WHAT ARE THE INFLUENCES OFWHAT ARE THE INFLUENCES OF
THE GLOBAL FINANCIAL CRISIS TOTHE GLOBAL FINANCIAL CRISIS TO
THE PROPERTY SECTORSTHE PROPERTY SECTORS
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SALES TURNOVER OF PROPERTY BUSINESSSALES TURNOVER OF PROPERTY BUSINESS
FOR 2005 T0 2009FOR 2005 T0 2009
2005 2006 2007 2008 2009P
1Proyek Pusat Perbelanjaan
Jabotabek7,334,734 31,984 23,130 14,300 3,945 6,907 80,265
2 Proyek Pusat Perbelanjaan Daerah 5,398,283 18,358 10,155 7,225 4,308 3,645 43,691
No. Nama ProyekNilai
Kapitalisasi
(Rp.)
GrossBuilding Area
(GBA) m2
Tahun
Source: PT. Panangian Simanungkalit & Associates, April 2009
3 Proyek Apartemen Jabotabek 5,961,390 7,945 8,445 9,786 10,372 7,289 43,838
4 Proyek Apartemen Daerah 1,660,524 1,412 3,509 3,326 4,769 4,259 17,275
5 Proyek Perkantoran Jabotabek 2,415,484 2,659 3,313 4,023 3,569 4,710 18,274
6 Proyek Hotel (Nasional) 1,181,251 3,108 3,043 3,536 3,740 4,127 17,554
7 Proyek Perumahan (Nasional) 78,344,845 17,730 17,561 22,977 29,371 25,931 113,571
8 Proyek Ruko/Rukan (Nasional) 18,686,408 7,812 9,132 11,948 13,217 11,669 53,778
120,982,918 91,008 78,288 77,123 73,290 68,537 388,245 Kapitalisasi Proyek Properti Nasional
(Rp. miliar)
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The development of
office buildings,Malls, Trade Centersand condominiums
are ettin slow
The sales turnover of
property businesswill decrease fromIDR 73.3 Trio (2008)
to IDR 68.5 Trio
THE FORECAST OF PROPERTY BUSINESS IN 2009THE FORECAST OF PROPERTY BUSINESS IN 2009
(2009)
The development of
middle-classapartments will still
growing while theunoccupied units is
increasing
The housing salesturnover will decrease
from IDR 29.4 Trio(2008) to IDR 25.9 Trio
(2009)
property businessproperty business
in 2009in 2009
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15,000
20,000
25,000
30,000
35,000
SALES TURNOVER OF PROPERTY BUSINESSSALES TURNOVER OF PROPERTY BUSINESS
FOR 1999 TO 2009FOR 1999 TO 2009
-
5 ,000
10,000
Pro. Pus. Perbelanjaan Jabotabek 1,43 5.5 2 ,535 .9 4 ,173 .4 7,728 15,66 2 2 1,49 8 3 1,98 4 2 3 ,130 14 ,30 0 3 ,9 45 6 ,9 07
Proyek Pusat Perbelanjaan Daerah 79.20 181.20 577.90 4 ,277 15,320 16,9 77 18,3 58 10,155 7,225 4,3 08 3,6 45
Proyek Ap artemen Jabot abek 271.15 797.95 915.89 1,48 4 4,0 23 6,6 65 7,94 5 8,4 45 9,786 10,3 72 7,28 9
Proyek Apartemen Daerah - - 158 .40 249 362 23 6 1,412 3 ,509 3 ,326 4 ,769 4 ,259
Proyek Perkant oran Jabot abek 39 9.69 581.37 472.36 60 36 6 850 2 ,659 3 ,313 4 ,02 3 3 ,569 4 ,710
Proyek Hot el (N asional) - - - 59 88 5 1,378 3 ,108 3 ,04 3 3 ,536 3 ,740 4 ,127
Pro yek Perumahan ( Nasio nal)1,99 3.0 3,4 95.0 4,0 37.0 7,129 8,4 96 11,84 2 17,730 17,561 2 2,9 77 29 ,371 25,93 1
Proyek Ruko/ Rukan (N asional) 1,09 6.0 1,92 2.0 2,2 20 . 3,9 38 5,583 6,513 7,812 9,132 11,94 8 13,2 17 11,66 9
19 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 P 2 0 0 9 P
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Occupancy rate of
malls and tradecenters aredecreasing from +80%-90% (2000)
Commercial
Properties such asmalls & trade
centers are
THE PROSPECTS OF THE PROPERTY BUSINESS IN 2009THE PROSPECTS OF THE PROPERTY BUSINESS IN 2009(1)(1)
to + 60%-70% (2009)
Trade centers and
condos are claimedsold + 85% while
the fact says only +60% are occupied
Development of
Malls, TradeCenters, andCondos are
getting slow
THE PROSPECTS OFTHE PROSPECTS OFTHE PROPERTYTHE PROPERTY
BUSINESS IN 2009BUSINESS IN 2009
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The construction
loan rate will alsodecrease from
18,5% (2008) to
The inflation rate
is decreasing from12% (2008) to
5,9% (2009)The fundamentals of The fundamentals of property business in 2009property business in 2009
THE FUNDAMENTALS OF PROPERTY BUSINESS IN 2009THE FUNDAMENTALS OF PROPERTY BUSINESS IN 2009
The mortgage rate
will decrease from15% (2008) to12% (2009)
The GDP growthwill slightly
decrease from6,0% (2008) to
4,0% (2009)
The BI rate willdecrease from
8,75% (2008) to7,5% (2009)
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The “KPR” rate is
decreasing to 12%,housing andapartment business
start to recover in
“RSH market” will
significantly increasefrom 105.000 units(2008) to 130.000
units 2009
THE PROSPECTS OF THE PROPERTY BUSINESS INTHE PROSPECTS OF THE PROPERTY BUSINESS IN 2009 2009(2)(2)
Housing, shophouse,midclass apartments,
and flats are stillpromising
2009
Land and housesvalue will increase
about 10 to 15%this year
THE Prospects of theTHE Prospects of theProperty Business inProperty Business in
20092009
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WHY PROPERTY STILL THEWHY PROPERTY STILL THE
BEST INVESTMENT IN THEBEST INVESTMENT IN THE
COUNTRYCOUNTRY
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Low deposit rate
(7%), low inflationrate (6%), the
currency is stable
“Reksadana” andstocks are nottrusted by ‘thewealthy’, while
property is safe andWhy Property StillWhy Property StillThe Best InvestmentThe Best Investment
WHY PROPERTY STILL THE BEST INVESTMENT INWHY PROPERTY STILL THE BEST INVESTMENT IN
THE COUNTRYTHE COUNTRY
Over supply is not aproblem as long as the
economy growth around5%. The property value will
‘increase’ even the
property is unoccupied.
The safer, profitable,promising, and risk-
free investmentchoice is property
Property become thestatus symbol, life
style, ‘saving account’of millionaires, also a
gift to a ‘loved one’
increasing.
in The Countryin The Country
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THE PROPERTY RISKS COMPARISONTHE PROPERTY RISKS COMPARISON
INVESTMENT RISK BONDSTIME-
DEPOSIT SHARES PROPERTY
B INE RI K Hi h L w Hi h L w
INTEREST RISK High Low High Low
INFLATION RISK Moderate Very High HighLow
LIQUIDITY RISK High Low Low Moderate
Source : Pusat Studi Properti Indonesia, April 2009
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UNIQUENESS OF INVESTOR MOTIVESUNIQUENESS OF INVESTOR MOTIVES
Property is the most solid investment
Oversupply no problem , price will increase
land scarcit
Many Speculative Investors
Property as money laundering instrument
Buy, empty and hold for 3-5 years is still profitable
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END USERS UNIQUE BEHAVIORSEND USERS UNIQUE BEHAVIORS
Property is a long term investment
Move in to a better house
Property as a gift
Property as symbol of social status and
lifestyle
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THE FOUR SEASONS OF THETHE FOUR SEASONS OF THE
PROPERTY MARKET &PROPERTY MARKET &
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THE FOUR SEASONS OF THE PROPERTY MARKETTHE FOUR SEASONS OF THE PROPERTY MARKET
Soft Market ( Equilibrium )
e er s ar et
Weak Market ( Oversupply )
Buyer’s Market
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SELL
RENTS INCREASE_EAGER BUYERS
RENTS OVERCOOK LOW YIELDS/HIGH RENTS
YIELD RISE
11
221010
1111
1212
Seller’sSeller’s WeakWeak
THE PROPERTY MARKET CLOCK THE PROPERTY MARKET CLOCK
SALES ACTIVITY UP
BUY
RENTS STABILISE
RENTS FALL_BUYERS SCARCE
SALES ACTIVITY FALLS
HIGH YIELDS/LOW RENTS
YIELDS FALL 44
5577
88
66
3399 ar ear e ar ear e
SoftSoft
MarketMarket
Buyer’sBuyer’s
MarketMarket
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WHERE IS THE POSITION OFWHERE IS THE POSITION OF
THE PROPERTY MARKETTHE PROPERTY MARKET
CYCLE NOWCYCLE NOW
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96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
RECOVERY BOOM 2P.CRASH E.RECOV BOOM 1 BBM 1,2 & 3TMP1
PROPERTY BUSINESS CYCLE FOR 1996 TO 2014PROPERTY BUSINESS CYCLE FOR 1996 TO 2014
00 09
BM = Buyer’s Market SLM = Saler’s Market SM = Soft Market WM = Weak Market
SLM1 BM1 SLM2 BM2 SLM3SM
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13.5
10
12
14
16
Kredit (%)
THE MORTGAGE RATE COMPARISONTHE MORTGAGE RATE COMPARISON
%
.
6.5 6.25
5.0 4.54.0
1.5
0
2
4
6
8
Indonesia Filipina Tiongkok Thailand Malaysia Singapura AS Jepang
Suku Bunga
Suku Bunga Kredit
%% %
%%
%
%
Source : PT Panangian Simanungkalit & Associates, April 2009
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THE ECONOMIC INDICATORS YEAR 2009 TO 2015THE ECONOMIC INDICATORS YEAR 2009 TO 2015
We a kWe a kWe a kWe a k
M a r k e tM a r k e tM a r k e tM a r k e t
2009200920092009 2010201020102010 2011201120112011 2012201220122012 2013201320132013 2014201420142014 2015201520152015
GDP Growth 4.0% 5.6% 6.0% 6.5% 6.5% 6.8% 7.2%
YearYearYearYear
Soft MarketSoft MarketSoft MarketSoft Mar ket Seller 's Mark etSel ler 's MarketSel ler 's MarketSel ler 's Market
Source : PT Panangian Simanungkalit & Associates, April 2009
Inflation Rate 5.9% 5.7% 5.5% 5.0% 5.5% 6.5% 7.0%
BI Rate 7.5% 7.25% 7.0% 7.0% 7.0% 8.0% 8.5%
Mortgage (KPR) Rate 12.0% 11.5% 11.0% 10.5% 11.0% 12.0% 13.0%
Construction CreditRate
15.5% 14.5% 14.0% 14.5% 15.0% 16.5% 17.0%
Cycle TRANSITIONTO TIGHTNESS
TRANSITION TO EASETRANSITION TO EASETRANSITION TO EASETR A NSI TI O N TO E A SE M A X I M U M EA SEM A X I M U M E A SEM A X I M U M E A S EM A X I M U M E A SE
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WHAT AREWHAT ARE
THE CHALLENGES FACINGTHE CHALLENGES FACING
THE PROPERTY BUSINESSTHE PROPERTY BUSINESS
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DEVELOPER BUSINESS BEHAVIORSDEVELOPER BUSINESS BEHAVIORS
Most of developers are highly depends on Bank loan
Too many Speculative Developers
Dishonest developers who cheat the consumers
Generally they are not transparent
There are not many publicly traded developers
Too few who ‘go international’
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UNNECESSARY FINANCIAL RISK UNNECESSARY FINANCIAL RISK
No “common perception” in property biz riskbetween Bank Indonesia and private Banks
Big private banks controlled by foreign investors
Lack of property market research
Right protection for Mortgage debtor is weak
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THE SOLUTIONS OFTHE SOLUTIONS OF
THE INDONESIAN PROPERTYTHE INDONESIAN PROPERTY
YEAR 2009 TO 2014YEAR 2009 TO 2014
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In 5 Year, There Are155,000 “Rusunami”
Units Will Be BuiltAutomatically By Big
Developers
To Open The AccessFor Foreigner To Buy
Condominium With The“HGB” Rights
Extended For 70 Years
INDONESIA WILL BECOME "MACAN ASIA PROPERTI"INDONESIA WILL BECOME "MACAN ASIA PROPERTI"
INDONESIAINDONESIA
Each Developer Who Sell
Every Unit CondominiumTo The Foreigner “Must
Be Build 3 UnitsRusunami”
Potential Market For
Condominium FromForeigner 55,000 Unit
/year @IDR 2 Bio orIDR 110 Trio/year
"MACAN ASIA"MACAN ASIAPROPERTI"PROPERTI"
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PROPERTY YIELD COMPARISONPROPERTY YIELD COMPARISON
Rank City & CountryYield
(%)Grade
1 Jakarta, Indonesia 13.40 Spectacular
2 Manila, Filipina 11.23 Spectacular 3 Kuala Lumpur, Malaysia 8.91 Very Good
4 Seoul, Korea Selatan 8.75 Very Good
5 Bangkok, Thailand 7.64 Good
6 Tokyo, Jepang 4.69 Poor
7 Shanghai, China 4.36 Poor8 Mumbai, India 3.27 Very Poor
9 Singapura 2.80 Very Poor
Sumber : Global Property Guide
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THANK YOUTHANK YOU
DR. Ir. Panangian Simanungkalit, M.Sc, RIM DR. Ir. Panangian Simanungkalit, M.Sc, RIM