Property developer PT Jaya Sukses Makmur Sentosa Tbk (RISE) has allocated IDR 600 billion (US$ 39 million) Capital expenditure (Capex) in 2023 for several projects, including warehouse and hotel.
The company, which is also known as Tanrise Property, focuses on real estate property development and management. Tanrise was founded in 2003 in Sidoarjo, East Java. It developed the Tritan Point Warehouse, comprising of warehouses and shophouses, in several cities of Sidoarjo, Malang, Surabaya, all are in East Java; Medan in North Sumatra; and Bandung, West Java. In 2011, the company expanded to the hotel industry in Malang and Gresik, East Java and Bali. Its famous properties include the Vasa Hotel Surabaya, Arc 100, Kyo Society and Tritan Point Warehouse.
Tanrise focuses on market education
Tanrise has a number of expansion programs this year using its 2023 Capex. “The Capex will be used for the development of warehousing, housing, shophouses, hotel construction and land acquisition in several areas,” Finance Director Herlina Prayogo said on March 5, 2023, as quoted by kontan.co.id.
The company is focusing to achieve its sales target in 2023. It is currently educating the market about potential investment and the optimal moment to invest through the “Untung Beli Properti” (Lucky, I buy a property) program. Through the program, the consumers are educated in the functional and value of Tanrise’s property.
“Tanrise has arranged various exclusive promotions such as 0% down payment, free additional fees, business incentives and other benefits to make it easier for customers to start investing and get these benefits,” Prayogo said.
She added that consumers would be able to process the property investment and easily access the program. “Through this program, we hope we can accelerate post-COVID-19 pandemic business recovery and encourage economic activity in Indonesia,” she said.
The company has prepared several programs in the hotel business to attract customers through its special promo events such as breaking the fast together during the Ramadan fasting month and hotel room packages.
Risks in property business
According to a survey from economy.okezone.com, there are several challenges in the property business, including the threat of a global recession this year.
“The property market situation in 2023 will again face challenges. The threat of recession and rising global interest rates will make residential sellers and supply providers careful in making decisions,” Marine Novita, Country Manager for Rumah.com, said on December 15, 2022.
The strengthening of the US dollar may last last long due to the macroeconomic condition, which is still uncertain because of the impact of the Russia-Ukraine war. The US federal interest rate which is increasing also resulted in the strengthening of the US dollar to the Rupiah.
“Due to these factors, property developers have complained about the rising production costs which eventually increase property prices,” Novita said.
