Don't Be Surprised! Land Prices at Hotel Sultan Could Reach This Level

Jakarta - The dispute over the former Hotel Sultan area in Senayan, Central Jakarta, is inseparable from its enormous asset value. Amid the government’s ongoing eviction process, the owner, PT Indobuildco, has revealed that the current asset value of Hotel Sultan has reached more than Rp20 trillion. This value derives from the land price and the buildings standing on it. The building value of Hotel Sultan is estimated at around Rp6 trillion, while Rp14 trillion comes from the land value in one of the most strategic areas of the capital. The magnitude of this asset value aligns with the condition of Jakarta’s premium property market, which has continued to rise in recent years.

“The NJOP for land in the CBD, Sudirman, SCBD, is already Rp150 million and above. In Sudirman it’s Rp150 million and above, including around Senayan where some have reached Rp100 million,” said Martin Samuel Hutapea, Associate Director of PT Leads Property Services Indonesia, on Friday. According to him, market land prices do not always follow the NJOP. However, in practice, many landowners and developers use the NJOP as a basic reference before determining their desired selling price. “Historically, the market value must be above the NJOP. We are not regulated by any rule or policy on whether the market value must be above or below the NJOP. But often developers make it a benchmark for their expectations of their land value,” he said.

In the SCBD area, the gap between NJOP and market price can even be very wide. In a number of transactions, the land value has been recorded as reaching one and a half times the applicable NJOP. “In SCBD there are some up to 1.5 times the value. So if, for example, the NJOP is Rp150 million, multiplied by 1.5, that’s Rp225 million. That exists. But that’s fine, because indeed no one regulates it,” explained Martin. If the assumption is that premium land prices in central Jakarta are in the range of Rp200 million to Rp225 million per square metre, then the valuation of the Hotel Sultan land, which spans more than 12 hectares, could reach tens of trillions of rupiah. It is no wonder that the area has become a highly contested asset by various parties. He also assessed that the upward trend in land prices in Jakarta’s premium areas still has the potential to continue in the long term. In fact, it is not impossible that the NJOP in the CBD area could one day reach a much higher level than today. “I think the NJOP per metre might one day, not now, reach Rp250 million,” said Martin.