Monday, July 9, 2012

Developers add novel features to condominiums to lure growing middle class


Straits Times: Mon, Jul 09
JAKARTA - Infinity pools. Rooftop gardens. Pet balconies.

In their quest to attract a burgeoning middle class in the Indonesian capital, developers are introducing ever more novel ideas to stand out from the crowd.

One residential tower in Kemang Village in South Jakarta is including pet balconies, which can be lined with earth and planted with grass for dogs to romp around.

'There is pressure to include unique features, otherwise it will be like selling an old car,' said Mr Jopy Rusli, director of Lippo Karawaci, who oversees the Kemang Village project.

Other developers, like Agung Podomoro and Ciputra, are throwing in jacuzzis and private pools for individual units, as they try to dazzle buyers spoilt for choice.

'Nowadays, a pool is normal,' said Ms Dewi Hennie, 32, an accountant who is shopping for an apartment. 'I don't mind paying a bit more to get something with cool features like a jacuzzi or a rooftop pool.'

Over 20,000 new condominium units are expected to be ready across Jakarta this year, more than double the annual average of 8,468 units in the past five years, property developers say. Another 20,477 units are expected to be completed next year, said real estate company Cushman and Wakefield.

The record numbers are a clear sign of optimism in Indonesia's economy. Analysts say the landed property market in the capital Jakarta remains strong, with prices jumping about 31 per cent last year over 2010.

Up to 311,495 landed residential units are expected to be completed by the end of this year, according to a Cushman and Wakefield report, about 6 per cent more than last year's supply.

This will prompt developers in the long run to be cautious as demand may not be able to keep up with the supply acceleration.

In her report, analyst Sarina Lesmina of research outfit CLSA said that, due to ample supply, rental rates for condos-for-lease and service apartments rose by only 4 per cent to 5 per cent year- on-year in the third quarter of last year.

Prices of new condominium units increased by about 14 per cent year-on-year to 17.9 million rupiah (S$2,500) per sq m in prime Jakarta areas, over the same period.

This price increase is more than double the inflation rate and almost triple the bank deposit rate. So, developers are working harder to offer something different.

Some are trying to create more green spaces, a rarity in urban Jakarta, said housing agent Catherien Nayoan. For example, Setiabudi Skygarden in South Jakarta will boast gardens, a jogging track, basketball court and barbecue pits.

Said Ms Nayoan: 'More Jakartans are into outdoor activities and also want to come home feeling relaxed, being around greenery. It's like a breath of fresh air.'

The concept of 'superblocks' is also taking root, with over 25 now scattered throughout Jakarta, a city nearly the size of Singapore. In these superblocks, residential towers are mixed with malls and commercial complexes.

The gloom in the global economy, however, has led to some caution in the Indonesian property market, players and analysts say.

'The only dark cloud could be the economic slowdown, which could affect property as this sector is sensitive to market turbulence,' said Mr Ferry Salanto, associate director of research at real estate consultancy Colliers International (Indonesia).

  
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