Agustina Wayansari\/Hendarsyah Tarmizi
\nThe Jakarta Post\/Jakarta<\/p>\n
Major apartment complexes are gearing up for face-lifts and
\nmore aggressive sales campaigns to anticipate a surge in demand,
\nfollowing the nation's peaceful direct presidential election.<\/p>\n
Hotel Borobudur, which manages the Garden Wing apartments, is
\nrenovating its apartments to take the advantage of the more
\nfavorable market.<\/p>\n
Puri Casablanca is also improving its room service, sports
\nfacilities and children's playground, while other apartment
\ncomplexes plan to intensify their sales campaigns.<\/p>\n
Poul E. Bitsch, the general manager of Hotel Borobudur, said
\nthat he was optimistic that the smooth democratic process would
\nprovide a healthier climate to further strengthen the recovery of
\nthe economy.<\/p>\n
Although, he admits it is too early to estimate the real
\nimpact of the election on business, Bitsch said the smooth
\nholding of the first round of the election had already boosted
\nmarket sentiment.<\/p>\n
\"There will be definitely a growth in demand, albeit at a slow
\npace,\" he said.<\/p>\n
On the back of such positive investment, the hotel will
\ncontinue with the renovation of its apartments, which has been
\nunderway since early last year.<\/p>\n
\"About 80 percent of the apartment complex has been fully
\nrenovated and, hopefully, the rest will be completed by the end
\nof this year,\" Bitsch told The Jakarta Post. .<\/p>\n
Like other apartments, Hilton Residences will also improve the
\nquality of its services and intensify its sales campaign to win a
\nlarger part of the growing market.<\/p>\n
\"We will try any effort to ensure that our guests will feel at
\nhome in our apartment,\" Ria Octavianty, the Hilton Residence's
\nsales manager, said.<\/p>\n
Similar optimism was expressed by Hans Pola, the general
\nmanager of marketing and serviced residences at Puri Casablanca
\napartments.<\/p>\n
Pola believes that no matter who wins the runoff on Sept. 20,
\nthe election's impact on business activities will be positive.
\nThe main impact of the election, according to him, will be an
\nimprovement in the economy and security situation, the most
\nimportant factors for the apartment business.<\/p>\n
Retired general Susilo Bambang Yudhoyono, who by July 16 had
\ncollected 44 percent of the vote, and incumbent Megawati
\nSoekarnoputri, with 26 percent of the vote, will most likely
\ncompete in the second round. A candidate would need 51 percent of
\nthe vote to win the presidential election straight off.<\/p>\n
Analysts believe that whoever wins the election this year will
\nbe seen as a legitimate leader. Thus, the next president will
\nreceive wider support to implement their economic, political and
\nsecurity policies.<\/p>\n
\"The smooth holding of the first round of the election has
\nresulted in the improvement of investor confidence. This can be
\nseen from the surge in the stock market and the strengthening of
\nthe rupiah,\" said Lily Djafar, a senior analyst with property
\nconsultant Procon.<\/p>\n
Lily, however, said it would take at least a year from now to
\nassess the real impact of the election on the economy, and
\nparticularly on the apartment business.<\/p>\n
\"The apartment market will record a significant growth, only
\nif there is an increase in foreign investment,\" she said. \"So,
\nthe real impact will be seen a year from now.\"<\/p>\n
She said the successful legislative election in April and the
\nsmooth process of the first round of the presidential election in
\nearly July had indicated an improvement in political stability.<\/p>\n
Like other analysts, Lily believes that the smooth democratic
\nprocess will provide a conducive environment for the elected
\npresident to lead the country.<\/p>\n
Many people feared earlier that the legislative and
\npresidential elections would incite conflicts among supporters of
\nthe political parties and their presidential candidates .<\/p>\n
Although some apartments recorded occupancy rates as high as
\n70 percent in the first semester of this year, the rental
\napartment market generally remained sluggish due to a sharp drop
\nin the number of foreign investors.<\/p>\n
Foreign investment approvals continued to decline. The
\nInvestment Coordinating Board (BKPM) said last week that during
\nthe first semester of this year, approved foreign investment
\ndropped by almost 35 percent to US$3.05 billion, compared to the
\nsame period of last year.<\/p>\n
Security uncertainty and the country's corruption-prone legal
\nsystem remain a major disincentive to foreign investment in
\nIndonesia.<\/p>\n
The board's deputy chairman Yus'an, however, said that the
\nsuccessful legislative election, and the smooth holding of the
\nfirst round of the first round had provided a boost to market
\nsentiment.<\/p>\n
He hoped that the appointment of a \"more legitimate\" president
\nwould further improve foreign investor confidence.<\/p>\n
Mustafa Salim, a senior executive of Apartemen Menteng
\nEksekutif supported Yas'un's view. \"With the improvement of
\nsecurity conditions, and political stability, Indonesia will
\nbecome more attractive to foreign investors\", he said.<\/p>\n
On the back of this optimism, Apartemen Menteng will also
\nrenovate its rooms and other facilities.<\/p>\n
Mustafa said that the renovation of the apartment building,
\nand the improvement of services and facilities, were a must for
\nthe relatively old player Apartment Menteng to enable it to
\ncompete with the growing number of new players in the business.<\/p>\n
\"A number of apartment complexes are under construction. In
\n2006, they will compete head-to-head with old players, like
\nApartemen Menteng,\" he said.<\/p>\n
Leasing transactions in the rental apartment market were very
\nactive during the January-March period, with total net take-up
\nreaching 243 units, a sharp increase from that of the last
\nquarter of 2003, which experienced a negative take-up of 32
\nunits, according to a quarterly report issued by Procon.<\/p>\n
Cumulative demand as of March 2004, stood at 10,196 units, an
\nincrease of about 30.5 percent from the pre-crisis figure of
\n7,812 units.<\/p>\n
The consultant said that no additional supply was recorded
\nduring the three-month period. The total cumulative supply,
\ntherefore, remained at 14,936 units.<\/p>\n
In line with increasing market activities, the overall
\noccupancy level increased by 1.62 percent in the three-month
\nperiod to 68.3 percent, leaving about 4,740 units vacant.<\/p>\n
Future supply is expected to come from the launch of 207 new
\nrental apartment units at Twin Plaza Apartment and Four Seasons
\nTower 4. New supply will also come from the entry of 416 strata-
\ntitle apartment units into the rental market by the end of this
\nyear.<\/p>",
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