ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Thematic (Sector/Industry)

The Indonesian property sector has only had a few glittering moments in the sun over the past five years, since the boom times of 2012-2013. The sector continues to trade at near record discounts to NAV despite the back-drop of record-low mortgage rates, rising affordability and high levels of pent-up demand. In this series under Smartkarma Originals, CrossASEAN insight providers <a href="https://www.smartkarma.com/profiles/937" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://www.smartkarma.com/profiles/937&amp;source=gmail&amp;ust=1546997131129000&amp;usg=AFQjCNEM6J5W9qoLicOCQg406eGu30soUw">AngusMackintosh</a> and <a href="https://www.smartkarma.com/profiles/3145" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://www.smartkarma.com/profiles/3145&amp;source=gmail&amp;ust=1546997131129000&amp;usg=AFQjCNGeAUtnEDEyoHjpHfSEb4E1G5KE2A">Jessica Irene</a> seek to determine whether or not we are close to the end of the rainbow and to a period of outperformance for the sector. Our end conclusions will be based on a series of company visits to the major listed property companies in Indonesia, conversations with local banks, property agents, and other relevant channel checks. 
In this series of Insights we will discuss in depth:
<ul>
<li>The drivers to the property sector, including the economic drivers, with a more benign outlook on interest rates, overall supply and demand, correlations to mortgage rates, the currency impact, construction costs, regulation and tax law change over the years and the influx of foreign developers and potential buyers. </li>
<li>The profiles of the biggest players in each segment of the property market. We will also map out the details of each company's location, accessibility, and longevity of their land bank.</li>
<li>How each development is interconnected and how it benefits from new infrastructure projects, such as the new toll roads or MRT, or LRT projects, and the rise of the T.O.D. (transport orientated development). </li>
<li>Each developer's target segment, whether they are focused on landed township developments, high rise, mixed-use, or industrial developments, and how each segment fared during boom time (2012-2014) or bust (2015-2018).</li>
<li>How much of each developer's revenues are coming from recurrent investment property sources such as the office, hotel, or retail properties, and which have the biggest proportion of speculative buyers versus end-users?</li>
</ul>
Last year saw a pick-up in sales activity for most developers but the question is can this be sustained going forward? With a more benign outlook on interest rates and a less hawkish tack from Bank Indonesia for 2019, the potential for positive regulatory changes to support the property sector, and a potential post-election tailwind from May onwards, there are good reasons to revisit this beaten up sector.

The Indonesian property sector has only had a few glittering moments in the sun over the past five years, since the boom times of 2012-2013. The sector continues to trade at near record discounts to NAV despite the back-drop of record-low mortgage rates, rising affordability and high levels of pent-up demand. In this series under Smartkarma Originals, CrossASEAN insight providers AngusMackintosh and Jessica Irene seek to determine whether or not we are close to the end of the rainbow and to a period of outperformance for the sector. Our end conclusions will be based on a series of company visits to the major listed property companies in Indonesia, conversations with local banks, property agents, and other relevant channel checks. 
In this series of Insights we will discuss in depth:

The drivers to the property sector, including the economic drivers, with a more benign outlook on interest rates, overall supply and demand, correlations to mortgage rates, the currency impact, construction costs, regulation and tax law change over the years and the influx of foreign developers and potential buyers. 
The profiles of the biggest players in each segment of the property market. We will also map out the details of each company's location, accessibility, and longevity of their land bank.
How each development is interconnected and how it benefits from new infrastructure projects, such as the new toll roads or MRT, or LRT projects, and the rise of the T.O.D. (transport orientated development). 
Each developer's target segment, whether they are focused on landed township developments, high rise, mixed-use, or industrial developments, and how each segment fared during boom time (2012-2014) or bust (2015-2018).
How much of each developer's revenues are coming from recurrent investment property sources such as the office, hotel, or retail properties, and which have the biggest proportion of speculative buyers versus end-users?

Last year saw a pick-up in sales activity for most developers but the question is can this be sustained going forward? With a more benign outlook on interest rates and a less hawkish tack from Bank Indonesia for 2019, the potential for positive regulatory changes to support the property sector, and a potential post-election tailwind from May onwards, there are good reasons to revisit this beaten up sector. 

Indonesia Property - In Search of the End of the Rainbow? Introduction to a Series.

<div class="content-highlight"><h2></h2>The 7th Annual JLL Indonesia Real Estate Forum in Jakarta saw record attendance, with around 600 real estate clients attending. The room was often full to the brim with standing room only. The central focus of the conference and panels was on how e-commerce is driving the take-up and makeup of office space in Jakarta.</div>Despite strong demand from these new e-commerce tenants, the impact is somewhat eclipsed by record levels of new supply for Grade A Office space. However, prime Grade A properties in SCBD are seeing strong take up and a bottoming out of rents. Another theme of the conference was the impact of new transport infrastructure (MRT/LRT and new toll roads) on residential property demand, as well as the resurgence of demand for condos, especially smaller sized affordable units. With 37% of the working population (192.6m) of Indonesia being Millenial, consumer behaviour in the property world is changing, with more demand for affordable living and co-working and even co-living spaces. Retail space is also changing in terms of the mix of tenants, with malls seeing the mix changing toward more F&amp;B and lifestyle choices, as retail malls become the "new hospitality". It is not easy to get pure exposure to the office or retail space in Jakarta, as most listed developers are more focused on residential township and mixed-use developments. <a href="https://www.smartkarma.com/entities/8550" target="_blank" data-smartkarma-citation="entities:8550:1">Pakuwon Jati Tbk Pt (PWON IJ)</a> provides quality exposure to retail through its Kota Kassablanc and Ganderia Malls, with around 50% of earnings coming from retail and office investment properties. <a href="https://www.smartkarma.com/entities/15498" target="_blank" data-smartkarma-citation="entities:15498:1">Bumi Serpong Damai Pt (BSDE IJ)</a> has strong exposure to residential through its Serpong BSD township but has also diversified elsewhere. <a href="https://www.smartkarma.com/entities/5693" target="_blank" data-smartkarma-citation="entities:5693:1">Summarecon Agung Tbk Pt (SMRA IJ)</a> has exposure to mixed-use developments and shophouses, as well as landed residential, with a long and well-established track record.

The 7th Annual JLL Indonesia Real Estate Forum in Jakarta saw record attendance, with around 600 real estate clients attending. The room was often full to the brim with standing room only. The central focus of the conference and panels was on how e-commerce is driving the take-up and makeup of office space in Jakarta.Despite strong demand from these new e-commerce tenants, the impact is somewhat eclipsed by record levels of new supply for Grade A Office space. However, prime Grade A properties in SCBD are seeing strong take up and a bottoming out of rents. Another theme of the conference was the impact of new transport infrastructure (MRT/LRT and new toll roads) on residential property demand, as well as the resurgence of demand for condos, especially smaller sized affordable units. With 37% of the working population (192.6m) of Indonesia being Millenial, consumer behaviour in the property world is changing, with more demand for affordable living and co-working and even co-living spaces. Retail space is also changing in terms of the mix of tenants, with malls seeing the mix changing toward more F&amp;B and lifestyle choices, as retail malls become the "new hospitality". It is not easy to get pure exposure to the office or retail space in Jakarta, as most listed developers are more focused on residential township and mixed-use developments. Pakuwon Jati Tbk Pt (PWON IJ) provides quality exposure to retail through its Kota Kassablanc and Ganderia Malls, with around 50% of earnings coming from retail and office investment properties. Bumi Serpong Damai Pt (BSDE IJ) has strong exposure to residential through its Serpong BSD township but has also diversified elsewhere. Summarecon Agung Tbk Pt (SMRA IJ) has exposure to mixed-use developments and shophouses, as well as landed residential, with a long and well-established track record. 

Indonesia Property - Harnessing the E-Commerce Boom in Indonesia - On the Ground in J-Town

Indonesia

PT Bekasi Fajar Industrial Estate Tbk is a real estate development and management company that develops industrial parks in Indonesia.

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Bekasi Fajar Industrial (BEST IJ)

Indonesia Property - In Search of the End of the Rainbow? Introduction to a Series.

The Indonesian property sector has only had a few glittering moments in the sun over the past five years, since the boom times of 2012-2013. The...

Angus Mackintosh

Indonesia Property - Harnessing the E-Commerce Boom in Indonesia - On the Ground in J-Town

The 7th Annual JLL Indonesia Real Estate Forum in Jakarta saw record attendance, with around 600 real estate clients attending. The room was...

Angus Mackintosh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)