Apartment sales indicate property sector recovery

Apartment sales indicate property sector recovery

JAKARTA (JP): An increase in purchases of apartment units in
the city by individual foreign investors reveals an early sign of
recovery in the domestic property sector, according to property
consultant PT Colliers Jardine's investment director Joseph S.
Halim.

"Colliers Jardine has brokered sales of hundreds of apartment
units in Jakarta to individual foreign buyers worth at least US$6
million in the past six months," Joseph said during the launching
of the company's international website, www.colliers.com, on
Wednesday.

According to Joseph, the residential subsector will lead the
way in the recovery of the domestic property sector.

The domestic property sector -- which includes the office,
retail, residential, industrial and hotel subsectors -- was
generally bleak in 1998, marked by limited sales transactions and
high vacancy rates, according to Colliers Jardine's latest
research bulletin.

The bulletin reported that sales of apartment units dropped 50
percent, to about 4,500, in 1998.

However, Joseph said, individual foreign investors had been
taking a big role in buying apartment units in Jakarta, with
purchase value exceeding that bought by institutional investors.

"Institutional investors only buy property in bulk or in high
value, thus facing high risk. Such property investment is now
avoided due to the country's unstable economic and political
condition," Joseph said.

He said that individual foreign investors -- buoyed by the
enticing property prices termed in the depreciated rupiah -- had
been rising to the risk to buy a few residential properties,
particularly apartment units.

Meanwhile, Jardine's managing director Dinna Erwin said
institutional foreign investors were now more interested in
investing in equity than property in Indonesia.

"The general sentiment now is that foreign investors are
willing to buy Indonesian companies, while setting a wait-and-see
position for buying property," she said.

Colliers Jardine, she said, was involved in the acquisition of
the giant domestic sauce maker PT ABC by the world's biggest
tomato sauce producer, H.J. Heinz of the United States, in
February. Jardine is currently appraising the acquired company's
physical assets. (02)