Business Activity of The Company

Currently, the business activity carried out by the Company is operating in property development field of apartment which connects with Shopping Centers in several areas in Jakarta and West Java and the current focus of the construction is residential in the form of apartment and commercial area.

No.Name of ProjectLocationEstimated Year of ConstructionCompletion TargetLand Area (m2)Building Area (m2)Total Unit
1Gateway Park
Bekasi, West Java2017202653.674249.4424.226
2Urban SignatureCiracas, East Jakarta2018202362.239217.3664.365
3Urban SkyCikunir, West Java2018202212.650107.5913.306
4Urban SuitesCikunir, West Java2019202310.80086.0432.106

Competitive Advantage

The Company believes that the Company has a competitive advantage compared to companies engaging in the same industry. The advantages of the Company among others are as follow:

• The Company has a Joint Operation (KSO) with ACP which is one of the subsidiary of the biggest contractor in Indonesia to develop a project of the Company. At the moment, ACP is also developing LRT project which is near to the projects of the Company.

• The Company applies the concept of one stop living in each of its project, where the residents can have convenience and comfort in meeting all of their staples without having to commute far.

• The Commercial Area of the Company developed within the LRT stations is in a high-traffic area in which this can be attractive for tenants and consumers in the area.

• The location of the projects of the Company are strategic and have high accessibility because they are integrated with the LRT stations.

• The Company’s management team is supported by experienced human resources in their field.

The Company has other land target that will be developed in the future located in Jabodetabek. The Company will continue to construct and provide projects that are innovative, modern, high quality and with an affordable price.

Business Strategy

The purpose of the Company is to be one of the best Property Developers. In operating its business activity, the Company implements the following business strategy:

• Development of residential property for middle segment in cities with high economic and population growth
Currently, the Company has 4 commercial and residential properties being developed which are Gateway Park, Urban Signature, Urban Sky, and Urban Suites . In the future, the Company plans to acquire new lands or to conduct a cooperation system with land owners where the Company acts as the developer who will give a value added to the portfolio of the Company. Residential properties targeted by the Company also focus on strategic location to target the middle-income market with high economic and population growth in Jakarta area and nearby.

• Focus in the area of suburban Jakarta and surrounding area which in general provide a wider land
Due to the scarcity of land in Jakarta as well as its high price, the Company will selectively look for land in Jakarta suburban area and its surroundings. The property development in wide, vast area, with strategic location and affordable price becomes the target of the Company in planning a construction.

• Always innovate and give a unique and creative product offer with the concept of ” Transit Oriented Development” and “One Stop Living” to the consumer
The products produced by the Company always emphasize the concept of Transit Oriented Development (TOD) which connects the residence with LRT, where in this case the Company cooperates with ACP. In addition to TOD, the Company will also develop a concept of One Stop Living in each of its project where this concept will facilitate the residents in meeting their needs. The residents will no longer need to commute far just for buying household needs, using sport and entertainment facilities. These two main concepts are brought up by the Company in order to differentiate it with the product of other property.

• Optimize financial resources for business development
The Company will continue to support and optimize the business development of the Company through a prudent combination between cash flow from operation and bank Loan, if and whenever needed. The Company thoroughly monitors the position of cash flow of the Company, actively manage the recurring income, and sales of the Company to help ensure sufficient cash flow for the Company’s ongoing need for capital expenditure. Next, the Company will also perform financial discipline in managing debt, liquidity, and cash flow of the Company to help ensure the financial stability of the Company as a whole and the adequacy of financial resources of the Company for future growth of the Company.

• Improving effective internal management control
The Company is committed to keep upgrading the company’s governance standard and internal control, utilizing expertise and management experience to improve the Company’s operation in the future, by setting clear responsibilities for each operational unit of the Company in order to improve overall efficiency of the Company and ability of the Company to quickly respond to changing market condition. By maintaining the flexibility and efficiency in the project level, the Company aims to improve all financial abilities and cost control of the Company as a whole.

Urban Jakarta is committed to develop property projects as a solution for urban communities, especially in Jakarta and surrounding area. In time it will increase the value of the Company and our financial profile. The future of the Company is in its business strategy that is different from other developer companies in general.

a. Concept of Transit Oriented Area (KBT) or Transit Oriented Development (TOD)
Jakarta as the capital city of Indonesia, every year witness rapid growth in the number of personal vehicle. The lack of organized growth and not followed by sufficient infrastructure development, caused Jakarta to be one of the city with the worst traffic in South East Asia. If the growth in the number of personal vehicle keeps continue, the growth of infrastructure is unable to keep up with the number of personal vehicle and can make the development of the city to be wasteful, inefficient and unorganized. From the problem, a concept of Transit Oriented Development (TOD) emerges to address the problem. The implementation of TOD has already been conducted by large countries such as the United States, Hongkong, Australia and countries in Europe. The purpose of TOD concept is to build a residence near to general transportation, Shopping Centers, business district, and entertainment destination so that it can reduce the public dependency on use of personal vehicle. With the concept of TOD oriented area, the Public may gain from the following (source: www.jakartamrt.co.id):

– Reducing traffic and pollution

– Creating a healthy and active environment by walking

– Facilitating access to work space and economic centers

– Improving the value of property nearby TOD area

– Adding options of transportation mode in urban area

Business Prospect

General transportation built to support the TOD concept among others are LRT (Light Rapid Transit), MRT (Mass Rapid Transit), and bus terminal. The concept of TOD is created to support the passenger transporting power as optimum as possible by creating an area where various facilities to support the public necessities available in nearby areas as illustrated below.

WALK

Pedestrian within shaded area covered with trees to ensure that walking is still convenient even during daytime.

MIX

The creation of various functions of land uses and buildings.

CYCLE

The design of the road guarantees safety for cyclist with a special interconnected bicycle lane. The availability of shaded spots and the availability of bicycle parking lots are two most important things for cyclist.

DENSIFY

Residential, close and easy access to public transport and other points of interest within the area.

CONNECT

Properly connected bicycle and pedestrian paths will generate a shorter and direct access to goods, services and public transports.

COMPACT

TArrangement of the smart city will help create an environment where residents workplace, school, shopping centers and points of interest are adjacent with each are. This will impact directly to travel time and exhaust emissions.

PUBLIC TRANSPORT

High frequency, quick and reliable public transport can reduce dependency on private vehicles.

SHIFT

Appropriate parking rates and reduction of land for parking lots will be applicable an incentive for people to take public transport, cycle and walk.

b. Development of Projects with a model of Mass Transportation Especially Light Rapid Transport (LRT)
Mass transportation development has been successfully developed in numerous developed countries including countries in South East Asia such as Malaysia, Singapore and Thailand. The development of the transportation infrastructure is supported by sufficient economic development, infrastructure development in a country will indirectly influence the country’s economy. The growth of investment on transportation infrastructure may accelerate the time spent on the way hence improving work effectiveness and decrease the costs incurred for transportation. By improving time effectivity and costs it will increase the people’s productivity and influence the Company’s performance on a micro scale. The improvement of good Company’s performance will also improve the macroeconomic condition in the country.

Indonesia is a country with the highest sales of personal vehicle in ASEAN (source: www.industri.kontan.co.id) particularly in Jabodetabek area. As one of the solutions to address traffic in Jabodetabek area, the Government proclaim that the construction of MRT and LRT has to be conducted. For LRT development, the President of the Republic of Indonesia, Joko Widodo has appointed ACP to develop the LRT project as the contractor and PT Kereta Api Indonesia as the operator in accordance with Perpres No. 98/2015. The development of LRT project will be developed in two stages where there will be 24 LRT stations when all of the stages are completed. The process of MRT construction is targeted to be completed in March2019 and the LRT is targeted to be completed in May 2019. From the LRT’s official site, there is currently four official TOD projects and two among them are the projects belonging to the Company (source: www.lrtcity.com).

The success of this LRT project will highly influence the business prospect of the Company in the future because the concept of the Project brought up by the Company. The more LRT railways that will be constructed by the Government in the future, the higher the business prospect of the Company.

c. Prospect of Property Industry
The projected economic growth increase in Indonesia in 2019 is expected to be a positive driver for property industry in general. The Company believes that the business prospect of the Company in the future is very promising with the improvement of Indonesia economic condition which can give positive impact to property industry in Indonesia. Some of the indicators that can support the business prospect of the Company among others are:

1. Plan of massive infrastructure development carried out by the Government, such as Light Rail Transit (LRT), Mass Rapid Transit (MRT) and toll road in order to support the development of property industry by adding more access between residential location with business districts and commercial area.

2. Increase in economic growth driven by increase in domestic consumption which is supported by increase in the people’s buying power, resulted in an increase in demand on housing both from the middle lower segment as well as middle upper segment.

3. Increase in demand on vertical housing due to changes in lifestyle and investment trend.

4. Increase in the people’s standard of living resulted in changes in lifestyle and demand on high quality and complex housing.

Indonesia’s population pyramid is also classified as the expansive type with population growth rate for the period of 2010-2017 amounting to 1,34% (source: Central Bureau of Statistics, 2017) per year, the high number of Indonesia’s population in productive age is expected to drive demand on new residential property. The trend of Foreign Direct Investment or direct capital investment by foreign investors also show an increasing trend and therefore can drive the growth of property sales whether for office, residential or shopping centers sectors. Based on the index data released by the Bank of Indonesia (BI) until quarter I of the year 2018, growth of demand on residential in the form of apartment in Jabodetabek area is approximately 7,53% YoY.

With the increase in apartment demand in Jabodetabek area, then through the Competitive Advantage of the Company with a problem-solving, unique concept and affordable price, the Company believes that the product created by the Company can be absorbed fully by the market.

With the tax amnesty program under the Regulation of The Ministry of Finance of the Republic of Indonesia Number 118/PMK/03/2016 concerning the Implementation of Law Number 11 Year 2016 concerning Tax Amnesty by the Government, the Company also believes that the property industry will witness a higher increase, considering there will be capital inflow to Indonesia by the investors which will be invested in the property industry.

The Company is not dependent on industrial, commercial or financial contract including contract with customers and/or government.

Marketing Activity

The following is the process of Marketing Activities carried out by the Company:

By conducting its Marketing Activities, the Company starts from creating a marketing strategy specific to the segment, target and price of the target market. After the strategy is established, various marketing media such as flyer, digital marketing as well as presentation directly used as an approach to retail consumer, to approach corporate consumer, the Company uses means of presentation and negotiation. If a retail consumer is interested to buy the apartment unit offered, the Company will start processing the consumer’s order starting from preparation of down payment, letter of order and contract. After the apartment construction process reaches 20%, the sales contract can be prepared to be signed by the customer, after the Project is completed then the process delivery of unit can be executed and the process of Marketing Activities ends.

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