Japanese developers hunt for projects in Indonesia

Even though domestic businesses often complain of sluggish property conditions, foreign developers, especially from Japan, still see great potential in the Indonesian market.

This can be seen from the increasing number of expansive Japanese developers expanding their business in Indonesia.

Based on data from the Investment Coordinating Board, Japan ranked second in the country that invested the largest investment in Indonesia from January to September 2018, which amounted to US $ 3.8 billion.

Meanwhile, in total foreign investment, the property sector ranked first in the business sector that brought in the largest foreign investment, amounting to US $ 3.5 billion or 859 projects.

Good relations between Japan and Indonesia have been established for a long time, namely since January 20, 1958 when signing the peace agreement between the two countries.

Tokyu Land Indonesia President Director Keiji Saito introduced his third project in Indonesia, Branz Mega Kuningan to commemorate 60 years of diplomatic relations.

Keiji said the country still has very good potential for overseas property developers to invest. He is still optimistic and committed to doing business in Indonesia even though next year is not expected to be a pleasant year for business people.

“Even though it is still not stable next year, I see that the fog will pass. I am sure 2019 will have an improvement despite economic and political conditions,” he said on Tuesday (12/18/2018)

Branz Mega Kuningan is a collaborative project between Tokyu Land Indonesia and Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN), which injects funding for the project to around Rp.837 billion. Meanwhile, the total investment of the entire Mega Kuningan Branz project is around IDR 2.5 trillion.

The project will be built on an area of ​​approximately 11,000 m2 with a total of 482 units of condominium units and 240 rental apartments.

The project that uses the All Japan concept will use, design, develop, contractor, and manage apartments from Japan and plan to expand the road around the project.

Branz Mega Kuningan is targeted to start work in the second quarter of 2019 after the election and finish in 2023.

In addition, the condition of the Sakura State property that is facing a recession is one of the reasons Tokyu Land is expanding in Indonesia.

Japanese market

Japan has experienced a decline in population, with the population having an old age range being the majority of the population at present. As a result, Japanese property prices soared and new development land was increasingly limited.

Indonesia’s investment climate which is having a demographic bonus or filled with productive age or millennial in the midst of the country’s large population, is also a reason. Massive infrastructure development also attracts current property development.

Indonesian land that can still be developed is inversely proportional to the conditions of major cities in Japan that have matured.

The same thing was expressed by the Executive Director of Tokyo Tatemono Asia Pte. Ltd. Ryutaro Nishimura. According to him, Indonesia is a very important market for Tokyo Tatemono. The Indonesian economy has grown positively in recent years, marked by achieving the highest gross domestic product (GDP) among Asean countries.

In addition, the average age of Indonesians is 28 years, different from that of Japan, which is 43 years, so Ryutaro thinks that Indonesia has enormous potential.

Based on data from the Central Statistics Agency (BPS), Indonesia’s population aged 20 to 40 years in 2020 is predicted to be 83 million or 34% of Indonesia’s total population of 271 million.

“Our expansion is also a corporate strategy because the Japanese property market has slowed down. Therefore, we target Southeast Asian countries to anticipate the market in the next 2 years,” he explained.

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