Industrial estate and construction firm PT Surya Semesta Internusa (SSIA) will allocate IDR 1.3 trillion of capital expenditure (Capex) in 2023 for the development and construction of Subang Smartpolitan through land acquisition and development.
Established in 1971 with the original name of PT Multi Investments Limited, the company changed its name to SSIA in 1995. It currently focuses on building construction, real estates, industrial areas, building management and others. The company’s diverse investment portfolio includes Suryacipta City of Industry, Subang Smartpolitan, Edenhaus Simatupang, Graha Surya Internusa (which will be rebuilt as SSI Tower), Gran Melia Hotel Jakarta, Melia Bali Hotel, Jumana Bali (formerly Banyan Tree Ungasan Resort Bali) and BATQA Hotels.
Smartpolitan project
Surya Internusa is focusing on the IDR 1 trillion development of Subang Smartpolitan in Subang regency, West Java. The construction of Subang Smartpolitan has kicked off in 2020.
SSIA President Director Johannes Suriadjaja said in 2020 that the Subang Smartpolitan would be a future city with a smart and sustainable concept on a 2,700-hectare (ha) plot of land. The first phase of the development started on a 400-ha area, located in the strategic future business area in West Java covering the Rebana Metropolitan. Rebana Metropolitan consists of three cities of Cirebon, Subang and Majalengka.
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Erlin Budiman, Vice President Head of Investor Relations of SSIA, said the IDR 1 trillion funds would be allocated for the construction of Subang Smartpolitan, specially for the development of the area and land acquisition. Other funds from the IDR 1.3 trillion Capex will be for other business units, especially the Edenhaus Simatupang and its hotel segment.
“The company’s 2023 Capex is IDR 1.3 trillion, which is mainly for Subang Smartpolitan of IDR 1 trillion,” Budiman explained during a public expose on December 15, 2022.
SSIA Director The Jok Tung said the company needed the Capex to expand Subang regency. The company still needs to acquire strategic land for the construction of infrastructure. He added that the company still had remaining funds from the leftover warehouse sales. In June 2022, the company divested warehouses worth IDR 560 billion.
Risks in property sector
However, there are specific problems in the construction and property industry. The obstacles such as permits and financing have been a problem. Meanwhile, the COVID-19 pandemic added more strain to the industry.
“Currently there are obstacles in the housing development, starting from Building Permits, Online Single Submission (OSS) as well as housing construction financing. So these two issues are actually the main problems of housing development in the country,” Paulus Totok Lusida, Chairman of the Indonesian Real Estate Central Executive Board, said.
Another problem includes the high cost of materials in the industry, causing both investors and actors in a dilemma.
