Property projects put on hold as crisis worsens

JAKARTA (JP): Economic and political uncertainty in the country has put more commercial property projects on hold in the second quarter of this year, according to property consultants First Pacific Davies Indonesia (FPDI).

The company said that many projects stopped as economic and political uncertainty mounted.

"The majority of projects have been suspended for an indefinite period, while others have slowed down and have revised completion dates," the company said in its latest study.

According to the study, the retail sector has been worst hit, with almost all new retail projects put on hold until 2000.

The company said that 93 percent of the total of 473,862 square meters of retail developments that were planned have now been suspended.

There is, however, 31,000 square meters still under construction, although the rate of progress has slowed considerably, the report said.

In the office sector, 1.03 million square meters or 66 percent of confirmed developments have been put on hold. Delayed projects are expected to increase to 84 percent of confirmed developments by the end of 2000.

About 57 percent of the confirmed supply of apartments, some 14,943 units, are currently on hold. Within the next two years the number of suspended projects will increase and an extra 3,857 units consequently put on hold. The total number of delayed units will then amount to 72 percent of the confirmed supply.

In the hotel sector, most of the projects put on hold are four-star hotels. Seventy two percent of three-star hotel developments have continued with construction.

Of all confirmed hotel projects to 2000, delayed developments now represent 4,350 rooms, or 54 percent of the confirmed supply.

The number of delayed hotel projects is expected to increase to the equivalent of 5,018 rooms, or 62 percent of the confirmed supply for the next two years, the report said.

Hotel projects that are currently on hold consist of 1,483 five-star rooms, 2,416 four-star rooms and 450 three-star rooms.

The study shows that only 193,244 square meters of office space will be added to the city during the rest of this year, including 10,500 square meters of strata titled offices, 51,190 square meters of leased premises, and 131,554 square meters of strata/leased projects.

Two office projects, Gedung Data Script and one tower of Taman Perkantoran Kuningan, are due to open in the second quarter of this year.

In the residential sector, Puri Imperium came on stream this month, and FPDI estimates that 6,800 new units will enter the market over the remainder of this year.

A total of 5,935 strata titled units, 108 leased units and 784 serviced units made up the new apartment units supply.

Of these units, 90 percent are located outside the central business district.

The totals include Kempinski Plaza and Eksekutif Menteng III and IV which are due to be completed shortly.

Because many of the hotel projects are already well advanced, construction is continuing as planned.

The study estimates that by the end of this year, the central business district will have an additional 360 five-star rooms and 287 four star-rooms.

Other areas of the city will gain an extra 915 four-star rooms and 441 three-star rooms.

The hotels include the five-star Kempinski and The Park Lane, and the four-star Menara Peninsula, all of which are expected to open in this quarter. (das)