JAKARTA (TheInsiderStories) – Japan’ Mitsubishi Corporation announced on Wednesday (07/31) the signing of a joint venture between its subsidiary PT Diamond Development Indonesia and PT Sirius Surya Sentosa, unit of PT Vasanta Indo Property, to develop a multifunctional property in Bekasi, West Java, at a total cost of Rp9.8 trillion (US$700 million).

The multifunctional property titled Vasanta Innopark covers 14 hectares, Mitsubishi takes 49 percent, while Sirius Surya is 51 percent.

Marketing Director of Mitsubishi Corporation Indonesia Kenji Shimazaki said, massive infrastructure development has made the property market in Greater Jakarta very attractive and offers promising opportunities. In general, he adds, the Indonesian market is very potential, especially in the Greater Jakarta area which is inhabited by 35 million people. As crowded as Japan’s Tokyo metropolitan has as many as 45 million people.

“After several projects in BSD City-Tangerang, and Orange Country projects in Lippo Cikarang, we are interested in working with Sirius Surya Sentosa to develop apartments for the lower middle class whose market niche is so large. The company will indeed see great opportunities through the construction of housing in Greater Jakarta,” Shimazaki told media in Jakarta after the joint venture’ signing.

Moreover, the MM2100 area in Bekasi, where Vasanta Innopark was built, is home to 364 companies that employ 130,000 employees. As many as 60 percents of the operating companies come from Japan, and the rest from Korea, as well as other countries.

“And the expatriates who work in this area are around 4,000 people. They certainly need representative housing. Not to mention if calculated as a whole, out of a total of 4,000 companies in 7 industrial zones in eastern Jakarta, Japanese companies dominate with 62 percent. The market share is quite large,” he said.

Another project that has been and is being worked on by Mitsubishi is Branz BSD City, Tangerang. In the $300 million projects, they collaborated with PT Tokyu Land Indonesia.

Previously, Mitsubishi established an alliance with Sinar Mas Land for the development of the Zora site. To realize this residential area, Mitsubishi and Sinarmas Land formed a joint venture with PT BSD Diamond Development. Both share capital of $260 million with a composition of 60 percent and 40 percent respectively.

Then, they also collaborated with Lippo Group to build Glendale Park apartments in Orange County with a 50:50 percent ownership stake.

“We are optimistic that Indonesia’s property market will rise next year. Therefore, we dare to invest more funds in Indonesia than the three other Southeast Asian countries such as the Philippines, Myanmar, and Thailand,” he concluded.

On the same occasion, CEO of Sirius Surya Erick Wihardja added, the two companies’ joint ventures for the entire project, ranging from land, construction, marketing, etc. to handover to consumers.

“Especially in terms of construction, we and they oversee the quality, with technology and expertise brought from Japan,” Wihardja said.

Vasanta Innopark will also develop nine apartment towers equipped with a number of commercial facilities to support residents’ needs. The first two towers have been marketed with a sales value of Rp800 billion. While for now the third tower will be launched, starting at Rp450 million. The company targets the sales of the third tower to be Rp520 billion from a total of 620 units, Wihardja added.

According to Wihardja, such massive infrastructure development in the eastern corridor of Jakarta raised market confidence and property sector investors. The Jakarta Outer Ring Road Toll Road which is connected to Tanjung Priok and the Jakarta-Cikampek Toll Road and the Jakarta-Cikampek II Elevated Toll Road whose construction is being boosted and the Jakarta-Cikampek South Toll Road and plans to extend the Light Rail Transit toll road affect the prestige of the east corridor as a promising area.

The largest share of the project’s foreign investment, he said, came from Japan, explaining that Japan’s aging population and shrinking domestic market meant it was inevitable that they must invest abroad. He expects the project to capture this potential, attracting Japanese investors to invest in Indonesia.

“It is expected that this project will be like a Little Tokyo because we know there are about 2,500 plants belonging to Japanese companies along the eastern corridor and it is predicted they will continue to grow. This platform will be the start of a partnership for other projects that have been discussed,” he said.

He hoped in the near future the collaboration between the two companies would expand to other sectors to cover residential and commercial buildings, private hospitals and hotels as well as joint asset management programs between the two groups.

US$1=Rp14.000

Written by Lexy Nantu, Email: lexy@theinsiderstories.com