Property sector 'needs foreign investment'<\/p>\n
JAKARTA (JP): The property market needs foreign investors with
\nfresh capital to pay debts, release existing owners from
\nunprofitable properties and restructure the sector, a property
\nanalyst said.<\/p>\n
Greg Penn, technical advisor to Procon Indah and director of
\nJones Lang Wootton Asia, said it was crucial for Indonesia's
\nrecovery to allow a higher level of direct foreign ownership in
\nthe property market and streamline the process of establishing
\nboth joint-venture companies and wholly foreign-owned interests.<\/p>\n
\"An additional burden of new property taxes would make
\nIndonesia less attractive for investment than neighboring
\ncountries such as Thailand and Malaysia,\" he said yesterday.<\/p>\n
Penn said he was certain that people expecting the property
\nmarket to improve in the short term were ill-informed.<\/p>\n
\"This market will not attract speculators but rather long term
\ninvestors who have the capacity to ride out the current downturn
\nand be rewarded for their patience with capital and income growth
\nbeyond the year 2000,\" Penn said.<\/p>\n
He added that foreign investors would be interested in
\nreentering the property market when the country's political
\nsituation stabilizes. Prior to that, investment should be for
\nlower levels of exposure in the US$5 million to $10 million
\nequity levels.<\/p>\n
\"Property is attractive to major foreign investors because
\nthey can control and manage the investment. If they invest in
\npublic companies, they often have no influence in critical
\nfinancial and ownership decisions,\" he said.<\/p>\n
Direct property investment would allow majority ownership,
\nproviding control to the investor, Penn added.<\/p>\n
Relocation<\/p>\n
Procon said some owners and renters were currently considering
\nrelocating their offices into the more established and secure
\narea of the capital's business district.<\/p>\n
The capital's business district comprises Jl. Jendral
\nSudirman, Jl. HR Rasuna Said and the area between the two streets
\nin South Jakarta.<\/p>\n
The company has analyzed some of the recent riot damage to
\nproperty, infrastructure, transportation and communications,
\nconcluding that it had a devastating impact on people's
\nbusinesses and their daily existence.<\/p>\n
It said that businesses affected by the riots were questioning
\nwhether they should reestablish themselves at their old site or
\nmove to a high-rise office building or a retail shopping mall
\noffering security and supporting services.<\/p>\n
Occupants of larger complexes are now open again for business
\nwhile many businesses in small offices and shop\/houses may not be
\nable to open for months, it said.<\/p>\n
\"The devastation, loss of property and business and the threat
\nto personal safety are likely to influence the type of
\ndevelopments in the future. In the short term, there may be an
\nunforeseen gain in shopping malls and high-rise office
\nbuildings,\" Penn said.<\/p>\n
He said the property market slump provided opportunities to
\npurchase secure offices and to lease space in shopping malls at
\nlower prices.<\/p>\n
\"Large office buildings and shopping malls have professional
\nsecurity along with the infrastructure required to operate a
\nbusiness. This may be more expensive than a small shop\/house, but
\ncompared to the loss of business and capital experienced recently
\nthe difference in cost is not significant,\" Penn said. (gis)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/property-sector-needs-foreign-investment-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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