Sat, 29 Oct 1994

Demand for middle class apartments still high

JAKARTA (JP): Prospects in Indonesia's middle class apartment business are projected to remain bright over the next two to three years due to the rising number of young married couples, a property consulting firm executive said yesterday.

Trevor Peach, an executive of Colliers Jardine Indonesia, said that based on a company study, over 40,000 wealthy couples are interested in buying apartment units located near their offices.

"Young couples between 25 and 35 years old with an average salary of Rp 3 million (US$1,376.14) to Rp 7 million per month with two children can afford them," Peach said at the soft launching ceremony of the Casa Grande Condominium.

The Casa Grande Condominium complex will be developed by PT Angkasa Interland, a subsidiary of the Gajah Tunggal Group.

"The building will consist of four towers with 988 units and its construction is scheduled to start next January," Sutrisno, director of PT Angkasa Interland, said.

According to Peach, "a total of 18,000 apartment units have so far been sold and another 40,000 units will be offered over the next two to three years."

He explained that basically there are two market segments in this business: the first is for expatriates and the second is for middle class Indonesians, whose number is steadily rising in line with the country's economic growth.

Last year, buyers flocked to the sale counters of Taman Rasuna apartments, developed by PT Rasunavest Caturindo Corporation, a subsidiary of the Bakrie Group in Kuningan, South Jakarta, because the company offered low rates.

A total of 2,000 units were instantly sold at that time with the price ranging from around Rp 125 million (about US$59,500 at the current rate) to Rp 242 million each.

By comparison, the price of a Casa Grande Condominium will start between $105,500 and $416,500 per unit.

Peach said that there were various advantages to living in apartments, including the fact that many will be located closer to business centers.

"About 15 million people are projected to live in Jakarta by the year of 2005 and it will be impossible to have houses outside of the city because of the hectic traffic," he said.

Meanwhile, Rubiyanto, commissioner of PT Angkasa Interland, said that Casa Grande Condominiums will be sold under the strata title system.

"The right of the land on which the building is built will be set in a collective ownership arrangement, with the owners of condominium units getting the right of 20 year building permits (HGB)," Rubiyanto said.

Under Law No. 16 of 1985 regarding vertical house buildings, owners are not only entitled to their own apartment units but also have the right to the land which is shared with other settlers

The proportion of the collective land ownership is calculated based on the area and the cost of the units they occupy.

The tenants are required to establish an organization to be in charge of managing tenant's interests, including the collection of land taxes and for the maintenance of available public service facilities. (yns)