The country’s largest listed developer, Bumi Serpong Damai (BSD), is ready to spend Rp 25 trillion (US$1.9 billion) to support its expansion in the next five years, with a number of projects to take place outside its flagship township in Tangerang.
BSD, part of major property group Sinarmas Land, was ready to spend around Rp 4 trillion to Rp 5 trillion each year in the next five years for project developments nationwide, said Monik William, an unaffiliated director.
“We are committed to spending between Rp 20 trillion and Rp 25 trillion for projects developments, excluding for land acquisition,” Monik told reporters after a press conference on Wednesday.
“The source of the funding, including possible bank loans, will depend on each of the projects.”
The company plans to disburse up to Rp 4 trillion of capital expenditure (capex) this year to finance a number of its projects.
The developer had previously raised Rp 1.65 trillion from releasing new shares equal to 5 percent of its enlarged capital in a private placement in February that was absorbed by its Singapore-listed parent company.
It has further issued a US-dollar denominated bond amounting to $225 million maturing in five years with the coupon set at 6.75 percent a year to finance the company’s capex.
BSD, which saw its profit soar by around 42 percent to Rp 3.82 trillion last year, has also decided to pay out only 7.56 percent of its net profit as dividends, meaning more than 90 percent of its bottom line is retained and available for its projects development.
BSD director and corporate secretary Hermawan Wijaya said his company would use the allocated capex for projects that could help the company achieve its net profit target of around Rp 4.39 trillion this year, or around a 15 percent increase year-on-year.
“Our capex will be allocated for infrastructure development, land acquisition and development of new projects in Greater Jakarta, Surabaya [East java], Semarang [Central Java], Balikpapan [East Kalimantan], Palembang [South Sumatra] and Manado [North Sulawesi],” Hermawan said.
Some of the company’s projects this year are located outside the company’s flagship township BSD City in Tangerang, Banten. The projects are a mixed-use Aerium development at Taman Permata Buana in West Jakarta worth Rp 2 trillion in investment; the Elemen Rasuna apartments worth Rp 2 trillion; a mixed-use building worth Rp 3 trillion in Tanjung Barat, South Jakarta; as well as residential project Grand City Samarinda in East Kalimantan.
In the Tangerang township itself, the company is also working on low-rise office compound Green Office Park and cooperating with international developer Hongkong Land on the 68-hectare residential Nava Park project, as well as with AEON Mall to establish the Japan-based firm’s first Indonesian shopping center, which is expected to launch late this month.
The company is also developing two apartments in the township that are expected to be launched this year and next year.
The projects are expected to help the company meet its marketing sales target of Rp 7.5 trillion, up by around 15 percent from the Rp 6.5 trillion recorded in 2014.
The company has secured Rp 1.8 trillion in marketing sales in the first quarter, about a 27 percent increase compared with the same period last year.
Anggi M. Lubis, The Jakarta Post