PT Paradise Property Tbk (INPP) is beginning to alter its business\ngrowth trajectory. After recording the highest revenue in the company\u2019s\nhistory at Rp1.1 trillion for the 2023 financial year, the lifestyle\nproperty issuer is now choosing to focus on optimising its existing\nassets rather than aggressively building new projects. This strategic\nshift serves as an important signal within a property industry still\ngrappling with construction costs, purchasing power, and the need for\ncapital efficiency. INPP believes that strengthening existing assets can\nyield faster returns with more measured risk.<\/p>\n
President Commissioner of Paradise Indonesia, Anthony Prabowo Susilo,\nstated the company is entering a new phase after previously building\nnumerous strategic assets in several major cities. \u201cThere is a time for\nbuilding assets, but now is the time to optimise them. We are allocating\ncapital expenditure of Rp200 billion to Rp300 billion specifically for\nthe renovation and quality enhancement of our existing assets,\u201d Anthony\nsaid during the annual Public Presentation in South Jakarta on Thursday\n(18\/6). According to Anthony, the capital expenditure funds will be\ndirected towards renovations of a hotel in Batam and the addition of\nrooms at Harris FX Sudirman, among other projects. This strategy is\nconsidered more efficient as it has a payback period of under five\nyears, faster than developing a new project from scratch.<\/p>\n
Vice President Director of Paradise Indonesia, Surina, explained that\nthe company\u2019s revenue in 2023 rose 33% year-on-year to Rp1.1 trillion.\nThis performance was primarily driven by the handover process of units\nat the Antasari Place project and a strong contribution from recurring\nrevenue businesses. \u201cCurrently, 90% of our revenue is recurring,\noriginating from the hospitality sector and commercial businesses. In\nthe first quarter of 2024 alone, we have already recorded a 14% revenue\nincrease compared to the same period last year,\u201d Surina said. The\ndominant portion of recurring revenue indicates that INPP is no longer\nsolely dependent on property project sales but is increasingly reliant\non assets that generate regular income, such as hotels, commercial\ncentres, and hospitality businesses. This business model is crucial as\nit can provide more stable cash flow, especially when the property\nmarket faces fluctuating demand cycles.<\/p>\n
Beyond asset optimisation, INPP is also embedding sustainability\nprinciples into its project development. One project in the spotlight is\n23Semarang, a commercial centre claimed to feature the first circular\narchitectural design in Central Java. Anthony stated the design was\ncreated to enhance the visitor experience, making it easier to navigate\nwithin the mall. INPP aims for this commercial centre to be not just a\nshopping place but a destination capable of attracting repeat visits.\n\u201cWe want to create a mall that makes people want to return five to ten\ntimes a year. The 23Semarang design ensures visitors do not feel lost in\nthe corridors, yet still experience a spacious and efficient\nenvironment,\u201d Anthony said. From an ESG perspective, 23Semarang will\nalso be equipped with green areas inside the mall and solar panels with\na 1.8 megawatt capacity. This step is part of the company\u2019s efforts to\nreduce environmental impact while increasing energy efficiency in\nmanaging commercial assets.<\/p>\n
Improved financial performance has also opened the opportunity for\nINPP to distribute an interim dividend in 2024. Management mentioned the\noption is being considered as a form of appreciation to shareholders.\nThe dividend signal emerges alongside the company\u2019s relatively healthy\nfinancial position. INPP recorded a debt-to-equity ratio of 0.3 times.\nAs of the first quarter of 2024, the company\u2019s total equity reached\nnearly Rp6.8 trillion. Currently, Paradise Indonesia operates 27\nbusiness units spread across eight major cities in Indonesia. With a\ncombination of recurring income, asset optimisation, and strengthening\nESG aspects, the company seeks to maintain growth without being overly\ndependent on new project expansion. This strategy marks a significant\nshift for INPP, from a phase of building an asset portfolio to a phase\nof maximising the value and productivity of its existing assets.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/developer-shifts-strategy-to-asset-optimisation-1781794366", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }