Balindo holds first property auction<\/p>\n
JAKARTA (JP): Private auction company PT Balai Lelang
\nIndonesia (Balindo) held its first property auction Friday,
\nselling off houses, office buildings and land worth over Rp 20
\nbillion (US$2.2 million).<\/p>\n
Balindo's managing director G. Gunawan said the company would
\nbe holding further auctions on a biweekly basis, in cooperation
\nwith international auction company Ray White.<\/p>\n
Selling company or private assets through auction should serve
\nas an alternative in liquidation and asset sales, especially amid
\nthe economic crisis, because it is a fast and easy process and
\nthere is assurance of satisfactory results, Gunawan said.<\/p>\n
He said an auction also ensured transparent, effective and
\nefficient transactions.<\/p>\n
\"Moreover, buyers will have permanent and safe legal certainty
\nbecause for every transaction, the auction officer will issue an
\nauctioning report that can be used as the basis for the
\nregistration of transfer of ownership,\" Gunawan said.<\/p>\n
He added that auctions in Indonesia had not yet gained much
\npopularity, but now seemed to be the right moment to promote the
\nuse of private auctions as a way to obtain liquidity quickly,
\nefficiently and safely.<\/p>\n
Statistics in Australia, for instance, show that 80 percent of
\nAustralian properties offered through auction companies achieve a
\n90 percent selling success, he said.<\/p>\n
Gunawan said auctions, especially privately organized ones,
\nwould eventually develop rapidly.<\/p>\n
Private auction companies began to operate in Indonesia after
\nthe government deregulated the auction business in 1996. Balindo
\nis one of five private auction companies operating in the
\ncountry.<\/p>\n
Before the deregulation, auctions could be held only by the
\nState Auction Office.<\/p>\n
Hotels<\/p>\n
Meanwhile, property consultant First Pacific Davies Indonesia
\nsaid five-star and diamond-class hotels were surviving the
\neconomics crisis better than three and four-star hotels.<\/p>\n
The company said in its latest weekly report that luxury
\nhotels could survive because their market segments were, to some
\ndegree, insulated from the crisis.<\/p>\n
Besides, the management of five-star and diamond hotels had
\nmanaged to maintain better cash flows through special offers and
\npackages.<\/p>\n
First Pacific Davies said only 45 percent of the total revenue
\nof a five-star or diamond hotel was generated from rooms, while
\nthe remaining revenue came from food and beverages, laundry
\nservices, business centers, telephone and other facilities.<\/p>\n
\"With five profitable years prior to the crisis, we have found
\nthat such hotels can survive for up to four years in the crisis
\neven if their occupancy rate falls to between 40 and 45 percent,\"
\nthe company said.<\/p>\n
As three and four-star hotels do not have as extensive a range
\nof facilities as luxury hotels, they are more reliant on room
\nrevenue and consequently suffer more as the market continues to
\ndrop, it said.<\/p>\n
It added that the percentage of occupancy rates and room
\nrevenue in a hotel's total revenue, plus bank interest rates,
\nwould have an influence on a bank's investment decision. (gis)<\/p>",
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