JAKARTA (IFT) – A listed property company, PT Royal Oak Development Asia Tbk (RODA), partnered with Sahid Group to build the tallest office tower in Jakarta with investment of Rp 1.5 trillion. Pikko Land Corporation, a company based in Singapore, owns Royal Oak.
Nio Yantony, President Director of Royal Oak said that the company will use internal cash for the development, besides pre-sales proceeds. The construction will apply an operational cooperation (KSO) scheme.
“So, Royal Oak provides the fund and Sahid Group supplies the land,” he said.
Sahid Sudirman Center project will need a one-hectare land. The building will have 52 floors and four basement levels. The building area is 132 thousand square meters. Hariyadi B. Sukamdani, Vice President of Sahid Group claims that the building will be the tallest office tower in Jakarta.
The construction phase will begin by the end of May 2012, and will be completed in two years. The building is a hybrid type because some units are leased while others are strata-titled.
In this cooperation, Sahid Group will receive 44 thousand square meters of business space in the building. One third of the total office space will be available also for profit sharing, while the remaining area is for the developer.
Around 88 thousand square meters will be sold by Royal Oak. The sales price is US$ 3,000 per square meter, and the lease price is US$ 20 per square meter per month.
According to IFT Research Department, Royal Oak’s potential revenue from the sales of 88,000 square meter office space is Rp 2.37 trillion assuming the sales price per square meter is around US$ 3,000 with exchange rate of Rp 9,000 per US$.
As of the third quarter of 2011, its revenue was Rp 88.9 billion from the sales of land and apartment units. Sahid Group is estimated to reach the revenue of Rp 95 billion per year from lease office space of 44,000 square meters, assuming that the lease price of US$ 20 per month with the exchange rate of Rp 9,000 per US$.
The construction of the office tower owned by Sahid Group and Royal Oak will increase office space supply in Central Business District (CBD) Jakarta.
Colliers International Indonesia recorded that the office space supply in Jakarta in 2012 will increase by 425,000 square meters. Around 400,000 square meters of which are in CBD. The remaining is located outside CBD, such as TB Simatupang, MT Haryono and Kelapa Gading.
The cumulative office space in Jakarta reaches 6.66 million square meters.
Ferry Salanto, Research Division Manager of Colliers International Indonesia, said that the office space utilization will grow this year due to foreign companies’ expansion and relocation, particularly after Indonesia obtained the investment grade status.
Besides Sahid Sudirman Center, Royal Oak will build a superblock in Kemayoran in the second quarter of 2012 consisting of apartments, offices and hotel on a land of more than 20 hectares.
It is also developing Botanica apartment project in Simprug, South Jakarta on a land of three hectares with the investment of Rp 1.5 trillion for upper middle class. It will build three towers with a total of 600 units. (*)