Ciputra building superblock with US$1b investment

Ciputra building superblock with US$1b investment

JAKARTA (JP): The property developer Ciputra Group is building
a 13.5 hectare superblock in Kuningan with investment of US$1
billion, Ciputra, the group's chairman said yesterday.

Ciputra said the superblock in Central Jakarta's so-called
golden triangle would consist of apartments, office buildings,
four- and five-star hotels, and shopping centers.

The project should be completed in five years, he said.

Ciputra said 50 percent of the investment would be derived
from its own equity and the rest from loans, mostly from foreign
banks.

"The property business is a long term investment. And for long
term investment we need cheap funds that can only be provided by
foreign sources," he said.

He said two apartment towers were finished in the superblock
called kota Ciputra (Ciputra town).

A shopping center and hotel, like Citra Land in Grogol, West
Jakarta, is now under construction, he said.

He said Ciputra and the Bira Group would set up a joint
venture to build three office towers in the area with a total of
150,000 square meters.

"We'll start building them this year and they will be
completed in the first quarter of 2000," Ciputra said.

He said he and the Bira Group chairman, Atang Latief, had
signed a memorandum of understanding on the office project, which
would cost about US$200 million.

He said the joint venture would be 25 percent owned by Bira
and 75 percent by Ciputra.

Ciputra said one of the towers -- each with 50,000 square
meters of office space -- would be Bira's main commercial base,
another would be Ciputra Group's headquarters.

"Only the third tower will be leased out," he said.

Candra Ciputra, the Ciputra town president, said the towers
would be an integrated office complex like the World Trade Center
on Jl. Sudirman, Central Jakarta.

Shopping belt

Ciputra said the 13.5 Ha superblock was in the 100 Ha
international shopping and tourism belt, which would be built by
developers along the 1.8-kilometer Jl. Dr. Satrio in Central
Jakarta.

The other developers, including PT. Duta Pertiwi of Sinar Mas
Group, Danamon Land, PT Haka, Jan Darmadi Group and PT Abadi Guna
Papan, are also constructing shopping centers, office buildings,
apartments and hotels along the road.

"In about 10 years' time you won't need to go to Orchard Road
in Singapore, the Champs Elysee in Paris or Ginza in Tokyo to
shop. We'll have it right here on Jl. Dr. Satrio (Kuningan)," he
said.

Candra said the demand for property, particularly office
buildings and hotels, would continue to increase.

"This year alone we expect the demand for offices to rent will
reach 200,000 square meters, " he said.

He said more and more companies wanted to establish or
relocate their regional bases in Indonesia. "This is caused by
the increasing cost of office space in countries like Singapore
and Hong Kong," he said.

He said in Singapore office rental averaged $50 a square meter
a month compared to an average $15 in Indonesia.

Bank Bira's President Bambang Panutomo agreed saying his bank
was interested in financing office and hotel construction. "As
the tourism industry is growing here, financing hotel
construction is still attractive," he said. (bnt)