Luxury apartments offered to highest bidders
Sandy Darmosumarto, The Jakarta Post, Jakarta
Real estate developer Duta Buana Permai Development is working together with MGI Global Auctions to sell 90 units in one of the four towers of the luxury Apartment Pavilion complex in Jakarta's business district.
Fifty-five one- to four-bedroom apartments, ranging from 82 square meters to 356 sqm, are to be auctioned off without a minimum bid.
Real estate giant Coldwell Banker Indonesia's director, Rio Kondo, who has been appointed spokesperson for MGI, said MGI expected to sell one property every three to five minutes, or 12 to 15 properties an hour during the Dec. 14 auction.
Duta Buana president Husodo Angkosubroto said, "... over 500 potential bidders from Indonesia and Singapore have already come to take a look at the units to be sold."
Rio said the auction scheme offers a win-win situation in which potential buyers were able to determine their own prices while developers would gain from optimal prices offered.
In regards the price list of units to be auctioned that is included in a catalog for potential bidders, he said the listed prices were neither market prices, nor based on construction costs per unit.
Muhammad Ichsan, a lawyer with the Indonesian Consumers Foundation, told The Jakarta Post that the price list "is meant to influence the bidding process".
"The auctioneer has a target price. Providing a price list in an open bidding will inflate the bidding price," he explained.
MGI will deduct a 3 percent commission from the purchase price, while buyers will be charged a 0.3 percent auction tax by the government.
About 90 percent of the units in the other three towers have already been sold through conventional real estate transactions. Each tower consists of approximately 120 units.
Construction of the complex itself began prior to the 1997 economic crisis, and Duta Buana is just now putting the finishing touches on the interior of the apartment units.
This is the first time that an open bid will be applied to the sale of apartment units here. Potential bidders will be required to make an initial deposit of Rp 50 million (US$5,800) on the day of the auction.