Foreign Property News | Posted by Zarni Kyaw
Government's announced farewell to Jakarta expected to create 500,000 jobs.
A day after President Joko Widodo announced his plan to move Indonesia's capital to East Kalimantan Province, property developer Agung Podomoro Land placed a full-page ad in a national newspaper offering investment opportunities in a new apartment and commercial complex in the province's largest city.
"Borneo Bay City, world-class resort ... best investment in the new capital in East Kalimantan," reads the ad, published in Kompas on Tuesday.
It adds that the "superblock" will consist of luxury apartment towers, a five-star hotel, shopping malls and other facilities. Further, it will be "strategically located," a 20-minute drive from the future capital.
Agung Podomoro Land's share price gained 8% the same day.
Some business executives have been euphoric since Widodo on Monday ended months of speculation and announced that the new capital will sit on 1,800 sq. km of land in the Penajam Paser Utara and Kutai Kartanegara districts in East Kalimantan Province, on Borneo Island.
The current capital, Jakarta, is on the island of Java and some 1,400 km southwest of where its successor is to rise.
The prospective move will give a direct advantage to property developers and construction companies already operating in East Kalimantan as well as to players with the potential to take part in its development.
The shares of PP Properti, the property development arm of state-owned construction company Pembangunan Perumahan, jumped nearly 18% on Tuesday. One day earlier, President Taufik Hidayat said his company has a hotel and shopping mall in Balikpapan, East Kalimantan's largest city.
"We've started [planning] to develop more properties across 500 hectares of land," Hidayat told reporters shortly after Widodo's announcement. "Since four months ago, we've been studying potential opportunities from the relocation plan ... to focus on [what] measures to take."
The shares of Bumi Serpong Damai, another major property developer and part of the Sinar Mas Group, are also on the rise. The company is known to have more than 5 sq. km of land in East Kalimantan, divided between Balikpapan and Samarinda, the provincial capital. Both cities are close to the site of the future capital.
Ref: Property Report
