Government policy related to Transit Oriented Development (TOD) is blessing for the construction company owned by State-Owned Enterprise (SOE). As regulated by the rule issued by the Ministry of Agrarian Affairs and Spatial management/National Land Agency (ATR/BPN), valid TOD management is carried out by the government and business entity.
In one of the rules, it is mentioned that the management of TOD area can be taken by government, provincial government, regency administration, partnership between local or partnership between government and business entity. Some SOE issuers, such as PT Adhi Karya Tbk (ADHI) and PT Wijaya Karya Tbk (WIKA), develop property di TOD Areas. ADHI tried TOD project at Jabodetabek light rail transit (LRT) stop named LRT City. This red-plate company has commenced the development of four LRT City areas. The four area being developed are LRT City East Bekasi-Eastern Green covering an area of 16,9 hectares (ha), Jaticempaka-Gateway Park 5, 9 ha in partnership with PT Urban Jakarta Propertindo. Then, Ciracas-Urban Signature 11, 5 ha in partnership with Perum Pengangkutan Penumpang Djakarta (PPD), and LRT City Royal Sentul covering an area of 14, 8 ha. Meanwhile, WIKA start to develop TOD project through its subsidiary, WIKA Realty. The company is preparing several new projects for the future. However, it has not decided that the target projects to be officially introduced to the market, such as two TOD areas at Tegalluar Bandung and Jalan MT Haryono Jakarta. An Analyst of First Asia Capital David Sutyanto assessed, property in TOD area has become one of the hot item with fairly strategic location. This will generate will positive impact on the issuers developing the TOD, moreover with the high property price in TOD area.
“It is surely profitable for the issuers, a new business, fairly premium location, a vitamin for the issuer,” David said, Wednesday (27/9). According to David, amid the slowing down property business, TOD product has advantage with premium location. In the future, better prospect will come to issuer such as ADHI although no significant profit from LRT, but from the TOD project developed. David recommends to buy the ADHI’s shares at target price of IDR 2.500, buy WIKA’s shares at target price of IDR 2.500.