By Yanto Soegiarto
Indonesia’s Lippo Group is developing a $21 billion (Rp278 trillion) industrial city on the outskirts of Jakarta near the location of many new industrial estates and townships.
The new city, to be known as Meikarta, is being dubbed the “Shenzhen of Indonesia” and represents Lippo’s largest project to date. Shenzhen is a city in southeastern China connecting Hong Kong with mainland China and is one of China’s largest manufacturing hubs.
“We foresee that the future of the Indonesian economy is on the outskirts of Jakarta. Together with the government’s massive infrastructure development plans — which aim to connect the capital with the Greater Jakarta area — we believe our project can create jobs for at least 6 to 8 million people in the near future,” Lippo Group deputy chairman James Riady told the media in May.
In the first stage of development, the industrial zone will be built on a 2,200-hectare area located in a corridor connecting Jakarta with Bandung. The area will be developed into an industrial center where millions of cars, motorbikes and electronic products will be produced every year. It is currently the home of Japanese manufacturing giants such as Honda and Yamaha.
Lippo Group has been planning the project since 2014 and has already begun to build 250,000 houses as part of the first phase of the project. The group began construction of 100 high-rise towers in January last year. The concept will be environmentally friendly, based on the grid concept for which New York is famous. “Meikarta will also have a Central Park,” added James.
Pre-sale of residential units began on May 13 and the company is targeting to sell 3,000 to 5,000 units per day. The first stage of construction of the entire project will be completed within three years.
The group has been planning the project since 2014 and has already started to build 250,000 houses as part of the first phase of the project. Construction of 100 high-rise towers began in January last year.
Lippo is financing the project using its own capital as well as funding derived from properties sold by pre-sale, loans and bonds. It will also finance the project through its joint venture with companies based in Taiwan, Japan, South Korea and Qatar.
Lippo Group will enter into partnership agreements with Japan’s Mitsubishi Group, Toyota and Sanko Soflan Holdings to build the city and it is also partnering with local contractors including Total Bangun Persada, Wijaya Karya and Pembangunan Perumahan, or PP.
The project is strategically located in the eastern corridor of Jakarta, where the government has been developing infrastructure including a light-rail transit line connecting major industrial zones in the area. The corridor will also connect Jakarta with the Patimban seaport and Kertajati International Airport in Majalengka, West Java.
President of Meikarta Ketut Budi Widjaja explained that the location of Meikarta will be the heart of a new economic hub surrounded by the new townships of Lippo Cikarang, Jababeka and MM2100.
Meikarta will have seven shopping centers with a total area of 1.5 million square meters, international-standard hospitals, an international financial center, ten five-star hotels, a national library, an opera theater and art center, international elementary, junior high and senior high schools, three national universities, an industrial research center, international exhibition center and an Indonesian Silicon Valley.
Land prices in the area currently stand at between Rp18 to Rp20 million a square meter but Meikarta offers discounted prices to under Rp12.5 million a square meter, as well as 20- to 25-year home ownership credit schemes with an interest rate of 8.25%. Buyers only need to pay a booking fee of Rp2 million and a down-payment of just 10%.
“Meikarta guarantees this is the best home investment in Southeast Asia with the massive investment in infrastructure and the facilities that will be built. We are pleased to have the support of the regional government and the opportunity to build something that is unique and benefits the people and nation,” Ketut said.
Lippo Group president Theo Sambuaga said Meikarta will promote a new living standard in Indonesia. “We are proud that our own team was capable of introducing a new and dynamic concept,” he said.
National figure Ginanjar Kartasasmita appreciated the new breakthrough made by Lippo Group and praised the group’s courage to make such a huge investment. Economist Didik Rachbini said the project will create employment. “In the midst of a global, regional economic downturn and low investment mood, Lippo Group came up with new ideas and consistently supports national development,” he said.
Separately, senior associate director of Colliers International Indonesia, Ferry Salanto, said Meikarta will create a positive impact in the long term for the people in the area. “They will get new jobs and hopefully Meikarta will also reduce the population density in Jakarta.”
In a latest development the grand launching of the Meikarta apartments sale has broken the record of Indonesia’s Museum of Records, or MURI, for the largest number of buyers in one day.