Premier invests Rp 120b to develop luxury homes

Viva Goldner, The Jakarta Post, Jakarta

French property developer Premier will invest Rp 120 billion (about US$12 million) in a luxury housing project at Bumi Serpong Damai, signaling confidence in Jakarta's high-end property market.

The company's second venture is worth four times the amount invested in their pilot project, Taman Provence, a residential development in west Jakarta, completed in 2000.

Having entered Indonesia during the peak of the economic crisis in 1998, Premier's business development manager Ronan Arzel said the company remained convinced of Jakarta's prospects.

"We believe in the potential of Jakarta to become one of the major cities in the world," Arzel said in an interview on Friday.

With medium-sized residential projects established in France, Spain and Germany, Premier successfully sold 85 houses at Taman Provence for Rp 1 billion to Rp 1.5 billion.

The new venture, Fontainebleau Golf Residence, comprises 105 houses surrounding a golf course, and is expected to be completed in 2004.

Arzel said the availability of land in good locations had prompted Premier to make Jakarta their first Asian subsidiary.

"The market in Europe is becoming very tough -- it is increasingly difficult to get land. We decided to try and develop in a country that, at that time (1996), was fast-growing, with a lot of land available," he said.

When the crisis hit in 1997, Premier took a chance on Jakarta's long-term prospects and went ahead with the project as planned.

"What we have seen from the customers we meet -- often high- ranking executives -- is that these people put aside money, so even with high interest rates of 20 per cent, they still had the potential to buy houses with their own money," Arzel said.

He said Premier was unusual as a European developer in Jakarta's locally-dominated property market.

"Premier is one of a few French developers who have tried to expand in Jakarta," he said.

"There are several Japanese groups that are very active, but more at an investment level, rather than direct development."