Together with the Honda Imora Group, they are developing a project called Summarecon Bogor which will be officially launched on 17 October 2020.
On an area of 500 hectares, the developer who was pioneered by Soetjipto Nagaria for more than four decades has invested Rp 20 trillion.
The numbers are not insignificant considering that Summarecon’s location is in an already “finished” area, namely Sukaraja with access to the Jagorawi South Bogor Toll Gate (GT).
In addition, this project is also flanked by two fields golf 63 holes with an area of about 210 hectares and has been established cottage as well as the five star Royal Tulip hotel Golf Resort Mountain Geulis.
To develop basic infrastructure and land acquisition alone, they spent IDR 1 trillion.
As stated by the Director of PT Summarecon Agung Tbk Herman Nagaria, Summarecon Bogor is Jakarta’s Pondok Indah.
“It not only offers housing, but also comfort, environmental quality, and prestige. We develop the concept of an independent city that is ideal for first home family, “said Herman, Tuesday (29/9/2020).
As an initial development, Summarecon offers 600 units covering three clusters, namely The Mahogany Residence, The Agathis Golf Residence, dan The Mahogany Island.
Director of PT Summarecon Agung Tbk Sharif Benjamin detailed, The Mahogany Residences includes 321 units with 114 units marketed in the first phase. The price is set at around Rp. 1.35 billion to Rp. 2.1 billion.
Then The Agathis Golf Residence developed 198 units with a benchmark price of Rp. 2.9 billion to Rp. 4.9 billion.
Seven units at The Agathis with a price of Rp. 4.9 billion will be marketed using an auction system.
Furthermore, the The Mahogany Island cluster, which is a plot measuring around 10×20 square meters, is priced at Rp 1.4 billion, totaling 79 units.
“Because it is a city-scale development, residential and supporting facilities such as business, commercial, education, health and entertainment places will be integrated with each other,” said Benjamin.
Questioning the market absorption opportunities
So, why did this duo dare to release a project that had been planned for 10 years, at the time of the Covid-19 Pandemic and economic conditions were on the verge of recession?
What is their chance of attracting market interest, especially in the Bogor area which is not as strong as Bekasi, Serpong and Jakarta?
President Director of PT Summarecon Agung Tbk, Adrianto P Adhi, explained that the company will never stop contributing, including during the Covid-19 Pandemic.
“We will continue to carry out business activities, so that the economy continues to run. I project the contribution of the property sector to national economic growth of more than 2.3 percent (BPS data),” said Adrianto.
This is because the property sector powers hundreds of related industries (multiplier effect) starting from the building materials industry, furniture, construction services, architectural services, marketing services, to construction personnel or human resources (HR).
When a property project is undertaken, the economy of the surrounding area will also move. Despite the Pandemic, the more so the crisis, Summarecon continues to market and build new projects.
Because in fact, property is an essential requirement (board) which the market will continue to need. The company is also optimistic that Summarecon Bogor will get market enthusiasm.
As said CEO of Leads Property Indonesia Hendra Hartono.
According to him, although it is different from the projects in Bekasi, Serpong or Karawang which were marketed when the property sector was at its peak, Summarecon Bogor has a great opportunity to become the choice of home seekers with the middle-upper segment.
“They have a high reputation, sell trust. Commitment to handing over and tidiness of the physical construction quality is also a mainstay,” said Hendra.
So, he added, it would be easy for Summarecon to sell the initial units to young upper-middle class Bogor families, as well as the surrounding cities.
In addition, these developers always have a loyal customer base who is sure to invest in every property they develop.
Arief N Rahardjo, Director of Research and Consultancy Cushmand and Wakefield, said the same thing, that many consumers would have bought products in the previous Summarecon project.
“And objectively, the factor of accessibility, location, and masterplan this project is well planned. That’s the consumer’s consideration, “said Arief.
The target of the first 60 units sold out seems to be realized. Likewise with the total units of the initial stage of the offer.
Conversely, even if it fails, the risk will not be as high as building an apartment. Housing construction will follow the number of units sold.
Meanwhile, the apartment must be built, even though the units sold are still below expectations.
Although it is projected to be able to attract market interest, it is project joint venture with the respective composition of Summarecon Agung 51 percent and Honda Imora Group 49 percent, there will not be price growth in the near future.
In Hendra’s view, the price offered is considered high as a logical consequence of the already established condition of the Sukaraja area.
“It is clear that this area will form its level of prestige from potential buyers who are end user, not a hunter for price increases and investments. End user will live in the house they bought. It’s different from ‘rent-seeking’, “continued Hendra.
Price growth can only be determined by buying and selling transactions on the secondary market, and supply is less than demand.
“So price growth Most likely, it will be small during this pandemic, “concluded Hendra.