As the property market in Jakarta and surrounding cities remains bleak, Indonesian property developers are eager to expand in the regions outside of the island of Java. Two examples are Batam, an island located not far from Singapore that is equipped with booming urban and industrial zones, and Medan, the biggest city on Sumatra.
Property developer Agung Podomoro Land, one of the listed real estate developers in Indonesia, recently changed its strategy. Previously, it was mainly focused on the Greater Jakarta area (especially vertical property development such as apartment towers, office towers and malls). However, the property market in this area is still not showing signs of a rebound. Therefore, Agung Podomoro Land has turned its focus to other parts of Indonesia.
Veri Setiady, Deputy President Director of Agung Podomoro Land, said the company needs to focus on business expansion in regions outside Java island to meet its sales target. Possibly the biggest project of the company was the land reclamation project in the bay north of Jakarta. However, the project was suspended by Indonesian President Joko Widodo in April 2016 due to alleged violations of - and/or hiatuses in - Indonesian law.
Moreover, a corruption scandal emerged involving Agung Podomoro Land and a local Jakarta legislator (Muhammad Sanusi). Former Agung Podomoro Land General Director Ariesman Widjaja was later sentenced to three years in prison and an IDR 200 million fine by the Jakarta Corruption Court as he was found guilty of bribing Sanusi in a bid to influence the outcome of deliberations on two draft bills with regard to Jakarta's Zoning Plan and Coastal Northern Territory (RZWP3K) for the period 2015-2035 and the North Jakarta Strategic Area Regional Spatial Plan. Agung Podomoro Land's subsidiary Muara Wisesa Samudra had earlier been awarded the rights to develop Islet G, a big residential and commercial property project called Pluit City.
Although apartment units of the ambitious land reclamation project have already been sold to consumers, the future of the project is highly uncertain now, especially after Anies Baswedan was voted to become the next Jakarta governor. Baswedan and his running mate Sandiago Uno have repeatedly expressed their objection to the ambitious reclamation project in Jakarta.
Therefore, Agung Podomoro Land is now focused on regions such as Batam, Medan (North Sumatra), and Balikpapan (East Kalimantan). Still, it remains faithful to its successful concept of "integrated superblock" which consists of apartment towers, a mall, office towers and supporting facilities.
In Medan, for example, it is developing Podomoro City Deli Medan, an integrated superblock that basically is a copy of the successful Central Park block that was developed in West Jakarta.
On Tuesday's trading day (22/08) shares of Agung Podomoro Land were flat. So far this year, however, its shares have climbed 10.48 percent to IDR 232 a piece. This growth is caused by a rebound after plunging last year when it became involved in the above-mentioned corruption case.
Stock Quote Agung Podomoro Land - APLN: