111210-FINAL-RusminLawin

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CROSS BORDER REAL ESTATE & SEMENYIH LAND OWNERS CONTRIBUTOR: RUSMIN LAWIN
RUSMIN LAWIN
Rusmin Lawin , born in May 1971 and
raised in Medan, North Sumatra, his
roles in various organizations of
business, political and social - have
recognized himself as one of the well-
respected young leaders, both within
Indonesia and ASEAN Region.
The owner of development company
that develop various types of projects
started his business 17 years ago, after
graduated from Law School at
University of North Sumatra 1994.
Well-known as the “Nokiaman”, with
his significant roles by connecting real
estate business community between
Malaysia and Indonesia. Recently active as speaker in variuos International
forum and writer, especially about Indonesia property market and
International Property in various foreign magazine. Currently, he holds
several strategic positions in the domestic and International business
organizations including the following:
Secretary General of FIABCI Asia Pacific Regional Secretariat
(2012-2014)
Secretary-General of FIABCI Asia Pacific (2010-2011)
Committee Member of Indonesia, Malaysia and Thailand Growth
Triangle (IMT-GT) Sub-Regional Cooperation of ASEAN
Deputy Secretary General of the National Real Estate Of Indonesia
(REI) 2010 - 2013
President of Real Estate Of Indonesia (REI) Northern Sumatra
(2008 - 2011)
Vice President of Medan Chamber of Commerce and Industry (KADIN)
2003-2013
Mobile : +6281933294866 ; +60192984108
email : rusminlawin@gmail.com
Skype: rusminlawin Facebook : Rusmin Lawin

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Indonesia’s real estate; a giant awakes June 2011
There is a ring of excitement among property players in the real estate
industry in Indonesia that many real estate-related analysts agree signal the
awakening of a giant in the republic.
The Indonesia property market is not only chalking double digits growth
this year, it promises to outperform many economic sectors as a key driver
of economic growth.
Two recent developments - Indonesia’s promotion to investment grade
status and real estate foreign ownership reform tabled in late October last
year - will ensure a robust growth in Indonesia’s property market for years
to come.
Achieving investment grade status means that Indonesia is recognized as a
reliable and stable borrower of funds whilst the strong lobby by both REI
(Real Estate Indonesia) and FIABCI (International Real Estate Federation)
Indonesia has resulted in the Indonesia’s legislature relaxing restriction on

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foreign ownership of real estate.
A more relaxed foreign ownership ruling will certainly boost the overall
property market in Indonesia where its property market even in its capital -
Jakarta - is still undervalued when compared to other major cities in Asia.
Other growth centres are in cities such as Medan in Sumatra, Pontianak in
Kalimantan and Manado in Sulawesi and of course touristy Bali.
Real estate analysts have predicted steady strengthening of the real estate
market in Indonesia which has a population of 240 million people. There
are at least three factors driving this growth.
The first factor is the Indonesian economy is more than likely to post
another year of strong growth in 2011 – GDP had grown by 6.9% year per
year in the 4Q 2010, the highest figure in the last 6 years and this year’s
growth is predicted to reach 8%.
Indonesia’s growing economy will very likely have a positive impact on
the real estate market; higher incomes mean increase in the purchasing
power of the middle and upper income groups, allowing them to invest in
new residential properties.
Another positive impact of the high level of growth will be a higher
demand for commercial real estate in the retail sector and the ever growing
mall segment. There is also a strong demand for office space, particularly
for Grade A property, which has historically been in short supply.
A high and stable growth at the rate of 6-7% will certainly make banks
more confident to lend with requests coming from the demand for new
development projects and the rising supply to boost the expansion of the
Indonesian mortgage market.
A second factor is the government’s proposed land acquisition law
submitted to Parliament in late 2010 that will speed up land price
negotiation for acquisition that usually can take more than a year. This
impending law is expected to cut in half the time needed to start
infrastructure projects.

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This law will facilitate the
plan by the National
Development Planning
Agency (Bappenas)
which has estimated in its
Mid Tern Development
Plan for 2010-2014 that
the government needs to
spend 2,000 trillion IDR
(216 billion USD) on
i n f r a s t r u c t u r e
development.
Over the next five years, the government is expected to work with private
investors to build 20,000 kilometers of roads and 15,000 megawatts of
electricity through public-private partnerships.
The third factor that is expected to enhance the real estate market is the
passing in December 2010 of a revised housing law that will allow low
income home buyers greater access to financing.
There is a strong call for the government to consider allowing foreigners to
own property in Indonesia in view of the fact that there are approximately
90,000 expatriates living in Indonesia.
Two months ago, conglomerate Ciputra Development reported substantial
demand for property in spite of high rates for housing loans — at around 9
percent to 9.5 percent.
With its strong economy, expanding middle class, growing housing loan
market and increasing demand for high-end real estate in the residential,
commercial and retail segments, the fundamentals for the local property
market are solid.
The government is putting in place the legal framework to support
investment and acting to resolve issues related to land acquisition; these
pro-active measures will give the real estate sector a welcome fillip and
should help to maintain sustained growth over the long term.

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INDONESIA COMMERCIAL MARKET :
SIGNIFICANT YEARS AHEAD July - August 2011
Indonesia real estate seems “risk-averse” and by all reckonings, it is
bucking the property trend currently.
The global financial crisis over the past two years should have impacted the
real estate negatively but it did not, instead rent of commercial property in
fact has risen significantly.
I expect this upsurge to continue and rents in most cities and in each of the
three sectors - office, retail and industrial - to rise further in each of the next
two years.
Analysts have predicted that Indonesia’s property sector will improve in
2011 chalking up 10 per cent in growth, despite increasing inflation and
higher interest rates.
Retail properties and office space will be the strongest performers as retail
and business sectors grow, The Jakarta Globe has reported.

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CROSS BORDER REAL ESTATE & SEMENYIH LAND OWNERS CONTRIBUTOR: RUSMIN LAWINAccording to Tommy Bastamy, senior VP of research and consultancy at
Coldwell Banker Indonesia, the property sector is expected to grow as
much as 10 per cent this year compared to last year’s eight per cent growth
because of increases in both supply and demand.
Last year, retail property slumped as supply decreased as well as demand.
In 2010 the supply of retail properties in Jakarta was only about 99,000
units compared to 228,000 available in 2009.
Demand slipped to 88,000 units last year from 168,000 in 2009.
Bastamy has noted that there will be 5 percent increase in retail this year
with the completion of new malls, especially in Jakarta, such as Agung
Podomoro’s Kuningan City and Ancol Entertainment Center.
The two will add approximately 110,400 square meters of retail space to
the market to meet expected higher demand.
For example, Mitra Adiperkasa, Indonesia’s leading lifestyle retailer, has
recently announced that the company had allocated Rp 350 billion
(US$40.3 million) for capital expenditure and planned to reach more than
1,000 total outlets by the end of this year.
“Even with increasing inflation, people do not seem to be worried because
per capita income is increasing and minimum wages are continuously
increasing,” Bastamy was quoted as saying.
In addition to retail properties, Bastamy also expects office space rentals to
increase this year. Last year, demand for office space grew to about
208,000 square meters, up from about 160,000 square meters in 2009.
“Office space will grow by 7 percent this year, especially supported by the
projected 6.5 percent economic growth and increased investment,” he said.
Utami Prastiana, the head of research and consultancy at property
consultant firm Procon Indah, is another expert who has pronounced good
news from the property sector.
She has said inflation and higher interest rates would impact apartments
and houses that are directed toward middle- and lower-income groups as
those segments are the ones more exposed to mortgages.

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However, she also said, it also depended on the bank providing the
mortgage and with the current 25 basis point hike in the interest rate, there
are no apparent increases in mortgage rates.
In general, the Indonesian economy is growing steadily. Our global trade
with net exports contributed only 2.8% to GDP in 2009 while private
consumption and capital investment made up the bulk of GDP.
This heavy reliance on domestic consumption has helped to shield the
Indonesian economy from any slowdown in the Chinese and/or US
economies this year or next year.
Like in all countries, the healthy growth of the property sector is relative to
Indonesia’s economic growth.
Indonesia did not go into recession during 2009 and bounced back in 2010.
Analysts have now predicted the 2011 GDP growth to record 5.9%. This
growth rate has generated considerable optimism in the commercial
property market.
On the positive rent increase in spite of the global slowdown, I like to quote
from a report in the London-based Business Monitor International

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magazine.
"What is noticeable,
and unusual, from
the picture of
I n d o n e s i a ' s
c o m m e r c i a l
property market is
that increased rental
returns are being
r e f l e c t e d i n
increased yields.
"It is usual to see
increased rental
returns leading an increase in property values that erodes, or even replaces,
any increase in yield.
"The explanation here seems to be that property owners/investors are
content with the increase in rents and see no reason to sell. As a result there
have been too few property transactions completed to show any significant
upward trend in property prices," the report noted.
In the residential sector, however, demand for luxury residential property -
both purchases and rentals - has been weak since the end of 2009, and
remained stagnant throughout 2010.
To prop up this, there was a plan announced by the government to allow
foreigners to buy property in Indonesia. But this was put aside.
A revised proposal to allow foreigners to buy long-term leases of up to 70
years is on the card now.
With or without foreign ownership, just meeting a basic need – shelter –
and the retail and commercial property demands to move Indonesia
forward, will continue to sustain the property sector in the years to come.
The world's fourth most populous country, comprising 17,508 islands, has
over 238 million people. End.

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A fillip to boost-up Indonesian residential market
September - October 2011
Law to allow foreign ownership of properties in Indonesia
The Indonesian residential market is expected to pick up and see an
increase as the Indonesian government has finally approved the Housing
and Settlement Law to allow foreign ownership of properties in Indonesia.
However, since the law was just recently passed, the full details and
implementation of the law is yet to be finalized. The property market will
still have to wait for feedback from all of the vast provinces in the country
to gauge the effects of this law.
With the passing of this law, foreign property investors will see
opportunities in the Indonesian residential housing market that was
previously a closed door to them. Now, the REI (Real Estate Indonesia) and
FIABCI Indonesia together with other stakeholders are pushing for a longer
leasehold tenure that is to extend it up to 70 years.
The current weak property market in Indonesia, perhaps, may finally see a
change in fortune with this law in place.
Earlier, this law was postponed and put on hold as government officials had
expressed concerns insisting on safeguards to prevent speculative purchases
in a bid to avert price spiral that may undermine the real estate industry.
How to avert spiraling property prices due to the new law
One way of checking this is to limit landed residential property ownership
only to permanent residents. Removing foreign ownership limits is seen as
the panacea to help revive the real estate sector at a time when the global
economy is showing signs of recovery, save for the latest temporary snag
caused by S&P’s downgrade of the credit rating of the United States.
In spite of this, many quarters still think the sheer scale of demand for
“shelter” by the world's fourth most populous country, comprising
17,508islands, with over 238 million people, will fuel and sustain the
property sector in the years to come.

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CROSS BORDER REAL ESTATE & SEMENYIH LAND OWNERS CONTRIBUTOR: RUSMIN LAWINThere is tremendous pent-up housing demand. Meeting a basic need –
shelter – in the low-mid residential market is huge with a shortfall reaching
eight million units this year.
In general, the relatively poor performance of residential real estate prices
in Indonesia has puzzled many. Despite strong economic growth and high
levels of investment, the demand for luxury residential property – both
purchases and rentals - has continued to weaken since the end of 2009, and
had remained stagnant throughout 2010.
What’s stopping the Indonesian property market from
growing
Real estate analysts have attempted to explain what hampered the growthof
Indonesia’s property market. Most agreed that the major contributing
factors are:
•High mortgage interest rates
•Foreign ownership
•High costs of building materials
•High tax rates
•Government red-tape; and
•In s u f f i c i e n t i n f r a s t r u c t u r e s
developments
President Susilo Bambang Yudhoyono
(SBY) has officially launched the
Master Plan for the Acceleration and
Expansion of Economic Development
of Indonesia (MP3EI) some time ago.
It was marked by the commencement
of a number of infrastructure
development projects in six Indonesian
corridors:-
•Papua – Maluku
•West Nusa Tenggara – Bali
•Sulawesi – North Maluku
•Kalimantan

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•Java, and
•Sumatera.
The giant project is projected to swallow a budget of Rp 3000 trillion until
2014, through planned investments of state-owned enterprises (BUMNs)
and national private companies. An economic Master Plan represents a
lighthouse for the future of this nation and, of course, it becomes crucial in
its implementation stage. Therefore, a number of challenges and obstacles
must be addressed with wisdom. This extra-ordinary program is expected
to boost up the whole country’s economic growth.
During the year to end-Q1 2011, residential property prices rose by
4.48%,according to the latest Central Bank of Indonesia Residential
Property Survey. But when the house prices have been adjusted for
inflation, they have actually dropped by 2.2% over the same period.
Indonesia enjoys good economic growth but it is never translated to strong
house price increases. The economy is expected to grow by 6.6% in
2011with high domestic consumption and investment, and healthy export
revenues.
One possible reason for the slide is Indonesia’s highly unpredictable
inflation rate, typically outpacing economic growth. Small-type houses,
measuring 36 square meters and below, experienced the most notable price
increases of 5.2% (-1.5% in real terms) year-on-year toQ1 2011.
On the other hand, medium-type houses, measuring between 36square
meters and 70 square meters, had the smallest increase of 3.9% (-2.8% in
real terms) over the same period. Large-type houses, measuring more than
70 square meters, saw average price increases of 4.4% (-2.3% in real terms)
over the same period.
Property sales rose by 4.5% y-o-y to 17,714 units in Q1 2011. In 2010,there
were about 67,707 units sold, up 13.8% from 59,498 units in 2009.
Jabodetabek-Banten (Greater Jakarta) led among regions, with property
prices up 5.74% over the year to Q1 2011. However, in inflation-adjusted
terms, prices were down by 1% over the same period.
It was followed by Manado (the capital of North Sulawesi) and Makassar
(the capital of South Sulawesi and home to several prominent landmarks

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including Fort Rotterdam), with
price increases of5.47% (-1% in
real terms) and 5.32% (-1.4% in
real terms), respectively.
On the other hand, Pontianak,
the capital of West Kalimantan
which is also known as the
Equator City, has the smallest
nominal price increase of 1.6%
in the year to Q1 2011. When
adjusted for inflation, property
prices also dropped by 5% over the same period.
Residential property prices are expected to continue rising (in nominal
terms) albeit at a slower pace, according to Bank Indonesia. In the year
toend-Q2 2011, residential property prices were projected to have risen
by4.8%, with Greater Jakarta expected to have experienced the highest
price increase of 6.6% over the same period.
From 58% in 1998 and 20% in 1999, inflation was wrestled down to 3.8%
in 2000. In 2001 and 2002, inflation soared to more than 11%. Then iteased
to 6% in 2004. Then the consumer price index jumped again to10.5% in
2005, and 13% in 2006. Inflation dipped back to 6.2% in 2007before rising
to 9.8% in 2008. Then, it eased again to 4.8% in 2009 and5.1% in 2010.
High inflation with its subsequent effect on economic growth, wages and
interests increase the level of uncertainty over the economy. This tends to
discourage people from borrowing to finance house purchase.
Another possible reason for Indonesia’s lackluster residential prices has
been the massive amount of real estate construction when the economy
grows.
The overhang of apartment is expected to reach 120,000 by 2011,according
to Colliers International. This massive rise in the number of apartment units
has impacted prices – and some say the downward pressure is likely to
continue.

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Cambria Property Group - Australia with Minister of Public Housing of
Republic of Indonesia Hon. Suharso Monoarfa
In conclusion
At best, relaxing foreign ownership will promote inflow of investment in
the property sector, the government has still to intervene to curb high
inflation, reduce red tape, introduce fiscal policies to keep prices of
building materials down and hold interest rate at a sustainable level. ends

111210-FINAL-RusminLawin

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