By Yanto Soegiarto
Slow economic growth in 2016 had an impact on most businesses in Indonesia including the property sector. As an experienced operator and one of the leading developers of malls, superblocks and residential towers, publicly-listed PT Pakuwon Jati met the challenge with innovations to achieve positive growth in 2017.
Now run by president director Stepanus Ridwan and director Ivy Wong, Pakuwon is continuing expansion of its recurring income projects by, among other steps, developing its mall business. The company is completing its newest Tunjungan Plaza 6 in Surabaya and expects it to be operating by September.
With a net leasable area of 27,000 sq m, Tunjungan Plaza 6 will complement Tunjungan Plaza 5, which started operations in the fourth quarter last year. Development of Tunjungan Plaza 5 and Tunjungan Plaza 6 is costing a total of Rp1.2 trillion.
“The occupancy rate of Tunjungan Plaza 6 is expected to be 80%. Around 50% of the tenants will be in the food and beverage business. The rest include fast fashion retailers such as Uniqlo, H&M and Zara,” Ivy Wong said during a public expose in June.
Pakuwon is also preparing a new apartment and office tower project on 4.5 hectares of land in the TB Simatupang area in South Jakarta. “In the first stage, we will build one to two towers. Then we will split the project in three stages. The apartments will be offered at a price of Rp2 billion a unit. Each tower will have 400 units,” she said.
At its malls in Surabaya and Jakarta, Pakuwon booked occupancy rates well above 90% during the first quarter of 2017.
Tunjungan Plaza had an occupancy rate of 97%, Kota Kasablanka 99%, Gandaria City 96%, Pakuwon Mall 91%, Pakuwon Trade Center 92%, Royal Plaza 97% and Blok M Plaza 90%.
Moody’s Investors Service has upgraded PT Pakuwon Jati’s corporate rating from Ba3 to Ba2 with a stable outlook. The upgrade reflected Pakuwon’s continued growth in scale and its maintenance of a strong financial and liquidity profile. Moody’s expects Pakuwon’s revenues to grow about 10%, with half the revenue coming from recurring income from its investment properties, assisted by its ongoing financial discipline.
Pakuwon Jati was founded by Alexander Tedja and his wife Melinda in 1982 with a plot of land on Jl. Basuki Rahmat in Surabaya. He knew from the start that the land had high commercial value and moved quickly to develop it. Plaza Tunjungan I began operation in 1986 and the project became his stepping stone to become a national-scale property player. He then built Plaza Tunjungan II and Menara Mandiri in 1991. From there he built Pakuwon City and other prestigious projects that became Surabaya landmarks.
The businessman is seldom quoted by the press and maintains a low-profile stance but his business plans are always big and stylish. Unlike other property players, Alexander Tedja maintains a less aggressive approach but plays a very active role in promoting creativity, which he says is the only way to achieve market equilibrium in a highly competitive environment. He believes that strengthening capital structure can only be achieved through consumer trust, creativity and innovation.
According to GlobeAsia sources in Surabaya, the couple still remain active behind the scenes in the company in policy and decision-making.