Indonesia: Intiland Development to Start Artificial Island Megaproject

PT Intiland Development Tbk (DILD) plans to develop an artificial island megaproject in Pluit, North Jakarta.

The project is applying the concept similar with Palm Islands in Dubai, Uni Arab Emirates.

According to the plan, the artificial island is located not far from one of Intiland’s signature projects, Regatta.

For the initial phase, the 150-hectare island will be reclaimed with the project value of IDR 5 million per square meter.

In other words, Intiland is expected to put IDR 7.5 trillion investment.

“We have secured the permit for developing an artificial island. Based on the master plan drawn up by Jakarta Provincial Government, the island bears the code Island H,” said Intiland president director, Hendro Gondokusumo.

According to Hendro, the new project is still being discussed internally. He said the artificial island is to be developed in a number of stages in a period of several years. ”Right now we are taking care of the licensing,” he said.

Intiland corporate secretary, Theresia Rustandi, said the company is requesting the license for the reclamation of one artificial island in Pluit. The licensing process should be done by the end of this year. ”That is why we cannot as yet make sure whether we are ready to market by 2014,” she explained.

Theresia added that the company is using the combination of internal cash reserve, pre-sales, and bank loans to fund the project.

Yet, the funding composition has not been finalized. “There are no detailed data yet,” she asserted.

Nevertheless, Theresia is optimistic that the funding for the project would be available. The company recorded positive performance this year. Until June 2013, Intiland recorded a net profit of IDR 140.48 billion, an increase of 74.8% from the same period last year, in which the company gained IDR 80.18 billion. The company’s operating profit increased 76.2% to IDR 250.62 billion.

The company’s operating profit for the first half of 2013 was IDR 764.89 billion, an increase of 44.1% from the first semester of 2012.

The increase of profit especially comes from sales of residential and industrial estates.

Development income is still the biggest contributor recorded at IDR 687.78 billion—increasing 89.92%. The rest comes from recurring income.

“For capital expenditure, we have realized 53% of the allocation for 2013 capital expenditure of IDR 1.5 trillion. Intiland’s expansion is also strengthened by July’s bond sales of IDR 500 billion,” Theresia added.

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Press Release, September 19, 2013