JAKARTA (TheInsiderStories) – PT Wijaya Karya Realty (Wika Realty), unit of construction firm, PT Wijaya Karya Tbk (IDX: WIKA), and PT Urban Jakarta Propertindo Tbk (IDX: URBN) joined hands to develop transit oriented development (TOD) in the greater Jakarta areas. Both companies prepared Rp10 trillion (US$645.16 million) to build Jakarta River City (JRC).
On Tuesday (04/21), Wika Realty and Urban Jakarta has inked the acquisition 51.01 percent of PT Ciptaruang Persada Property (CPP) shares for Rp633 billion, reflects 49.99 percent of the company’ equity. CPP is the largest shareholder of PT Jakarta River City, which is developing a TOD project near to the Ciliwung Light Rail Transit Station in Jakarta.
The management Urban Jakarta said, the funds used for this acquisition come from from the initial public offering proceeds and internal cash. President director of the developer, Bambang Sumargono told Kontan, this acquisition is one part of the company’ business development plan with TOD concept.
“After the acquisition process is complete, we will immediately finalize the business plan and all the required permits. Its estimated that in 2021 we will launch the JRC project, which is worth around Rp10 trillion,” he said on Thursday by adding the TOD project will later generate accumulated operating income of Rp9.3 trillion and net profit of Rp2.8 trillion.
End of 2018, Urban Jakarta officially listed it shares at Indonesia Stock Exchange and raised funds of Rp 430 billion. The majority of the funds obtained from the IPO will be used land acquisition in Jakarta, Bogor, Depok, Tangerang, and Bekasi areas
At present, the company is developing four TOD concept projects located on the LRT light rail network with total value around Rp10.2 trillion. Two projects are joined with PT Adhi Commuter Properti, namely Gateway Park valued for Rp3.7 trillion and Urban Signature worth Rp3.77 trillion. Two other projects, Urban Sky, have a value of Rp1.41 trillion and Urban Suites worth of Rp1.58 trillion.
While, CEO WIKA Realty, Agung Salladin said, the company targets to achieve marketing sales of Rp2.3 Trillion in 2020, or an increase around 18 percent from the previous year of Rp1.95 Trillion. To that, the developer prepared capital expenditure Rp7.6 trillion.
“The funds will be used for the development of ongoing projects and for asset acquisition, especially to strengthen the recurring portfolio,” said the CEO.
In 2020, WIKA Realty will develop eight new TOD and township projects spread across Jakarta, Bandung, Tangerang, Karawang, and Klaten in Central Java. The projects above of the total 29 projects under the company.
The unit of Wijaya Karya is currently preparing to carry out an IPO in 2020 and is expected to be realized in the first half of this year after postponed in 2018.
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