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)