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)