$2.2b in property projects could be postponed in 1998

JAKARTA (JP): Property projects worth Rp 11.48 trillion (US$2.2 billion) are likely to be postponed next year due to the dragging monetary crisis, property publishing firm Burword Publishing Indonesia has said.

Burwood predicted last week that some Rp 18.97 trillion in property projects could probably survive the current crisis and continue next year.

"If economic recovery comes earlier next year, property projects valued at Rp 30.45 trillion could possibly continue their construction," Burwood said.

Burwood said property projects under construction and to be completed next year were valued at Rp 4.53 trillion.

New projects whose construction was scheduled to commence next year were worth Rp 14.44 trillion. These projects would likely be suspended if the economic crisis continued or even worsened next year, the firm said.

Based on its research of 439 property projects in October, Burwood said 91 large projects, with an investment of over Rp 120 billion, were delayed.

The remaining 348 projects, mainly small- and medium-scale projects worth between Rp 30 billion and Rp 50 billion, were likely to continue next year.

Of those surviving projects, 25.6 percent were residential projects, 20.6 percent office buildings, 16 percent retail, 11 percent hotels and 26 percent others, including resorts and hospitals.

Burwood identified six new large commercial projects with a total investment of Rp 650 billion, which would likely continue next year.

They were Taman Niaga Golf in Cengkareng, West Jakarta; Kota Baru Parahyangan in Bandung; Surabaya Exhibition Center in Surabaya, East Java; Permata Kebayoran Apartment, West Jakarta; Rungkut Mall in Surabaya; and Puri Delta Mas on Jl. Bandengan, Jakarta.

Of 690 building projects researched by Burwood so far, 66 percent had not began construction, rescheduled or even canceled their projects, 34 percent were in the middle of construction and only 9 percent had been completed.

"Many project investors have to rack their brains about how to survive the current monetary crisis. Estimates on the value of projects have been wrong due to an escalation in prices. Consequently, many cannot stick to their timetables in completing their projects," Burwood said.

Indonesia has been gripped by a severe monetary crisis since early July due to the sharp fall of the rupiah against the U.S. dollar. The rupiah has lost more than 50 percent of its value against the dollar since then. (rid)