Leading Property Firms Collaborate for Rp8 trillion (US$823 million) Development

Leading property firms Lippo Group and Sentul City will team up to develop an integrated urban area in Sentul, near Bogor, the pair have announced.

The project, to be built over 20 hectares, will include a 250,000-square-meter shopping mall and a central business district. It is estimated to cost at least Rp 8 trillion ($823 million).

Sentul said in a statement that it expects to tap into Lippo Group’s experience in developing new urban centers such as Lippo Cikarang.
The statement added that Lippo Group will build on the site several public facilities, including an international school, hospital and office spaces.

This development is expected to fuel Sentul’s growth as a new urban center in Greater Jakarta, attracting an estimated 50 million visitors each year.

Kwee Cahyadi Kumala, president director of Sentul City, said the company would providing ready-to-use land to investors.

“The cooperation is expected to bring supporting facilities to Sentul city area in line with consumer needs and demands,” Cahyadi said, adding that Sentul planned to ultimately develop a 50-hectares central business district in the satellite city.

The developer has built a wide range of urban facilities in the satellite city, which is home to 27,000 people, including a racing circuit and a world-class convention center.

One major expansion project being built by Sentul City is a theme park, Jungleland Asia. Bank Pan Indonesia last April agreed to issue a Rp 200 billion ($21 million) loan to the property developer to help finance the theme park.

Sentul City has been steadily increasing its land bank through acquisition. It recently added another 1,800 hectares to its landbank by becoming a majority shareholder in the Bakrie Group’s Bukit Jonggol Asri.

Sentul City booked profit of Rp 221 billion on Rp 623 billion in revenue last year.

Lippo Group subsidiary Lippo Karawaci paid Rp 270 billion in dividends this year, equal to 38 percent of total net income for 2012. Profit at Lippo Karawaci jumped 50 percent to Rp 708 billion as total revenue climbed 47 percent to Rp 4.19 trillion.

Shares in Lippo Karawaci closed unchanged at Rp 1,350 on Monday and shares in Sentul City were also unchanged at Rp 290.

Jakarta Globe is a part of Lippo Group.