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CapitaLand enters joint venture on integrated development in Jakarta

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An artist's impression of Raffles City Changning in Shanghai, China. It is a mixed use development comprising three office towers and two retail podiums. Property giant CapitaLand has entered into a 50-50 joint venture with a subsidiary of Indonesian real estate, auto and mining group Credo Group to develop an integrated development in Central Jakarta.

PROPERTY giant CapitaLand has entered into a 50-50 joint venture with a subsidiary of Indonesian real estate, auto and mining group Credo Group to develop an integrated development in Central Jakarta.

The development is not expected to have a material impact on net tangible assets or earnings per share for its current financial year. It will comprise a Grade A office tower, mid- to high-end residential units, serviced residences and supporting retail space, with a total gross floor area of more than 40,000 square metres. Construction is expected to begin in 2015, and finish in 2018. The total development cost is about S$220 million.

The joint venture will buy from Credo a one-hectare site in Jakarta's central business district (CBD), CapitaLand said in a statement. The site is "close to embassies, renowned civic buildings, offices, affluent residential neighbourhoods and the National Monument, and also has good connectivity to major roads within the CBD and other areas in Jakarta".

CapitaLand president and CEO Lim Ming Yan said the move marks a milestone for a "re-energised CapitaLand as we build a pan-Asian portfolio with a focus on integrated developments".

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He added that Jakarta was one of the fastest growing cities in the world for the office and prime residential sectors in 2013. "This uptrend is expected to continue with a rising middle-class population. With a strategically located site, positive market demand and a reputable local partner, we are confident this project will be well-received by the market," he said.

Judith Soeryadjaya, chairwoman of Credo Group, said the group plans to consolidate its assets and properties to maximise value and increase the scale of its future business activities. CapitaLand has been operating in Indonesia since 1995 through its serviced residence business subsidiary, The Ascott Limited.

CapitaLand closed trading last Friday at S$3.25 a share.

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