Ciputra Residence Secures Rp 350 Billion Loan

Screen grab from Ciputra's websitr

Jakarta. Ciputra Residence, the subsidiary of listed property giant Ciputra Development, has secured a Rp 350 billion ($29.4 million) loan from Bank Mandiri to finance new projects across the country.

The loan will be due in one year and is revolving in nature, according to a press statement obtained by the Jakarta Globe on Tuesday.

Ciputra plans to use the funds to expand on its residential projects, according to Ciputra Residence president director Budiarsa Sastrawinata.

“Through this loan, we seek to bolster  business development in rapidly developing areas — both in terms of supply and demand — supported by the country’s stabilizing economy and the rising housing backlog,” said Budiarsa, who is also managing director of Ciputra Group.

Indonesia’s Housing Ministry estimates the country is currently short of 15 million housing units and would require some 900,000 new houses and apartments every year. Property developers, however, are only able to supply half of the housing demand, the ministry said.

Ciputra Residence — whose portfolio includes office buildings, shopping centers and residences — currently has projects in Cilegon and Tangerang in Banten; Palembang, South Sumatra; Pekanbaru, Riau Province; Jambi province; and Jakarta.

The property developr previously received a Rp 36 billion loan from Bank Mandiri to build a Theme Park & Food Center in Tangerang, a residential infrastructure project in Citra Garden, Jakarta and a Waterpark t in Palembang.

Additionally, it raised approximately Rp 500 billion from selling three-, five-, and seven-year bonds earlier in March to expand its residential projects.

Ciputra Residence contributed approximately 22 percent to Ciputra Development’s Rp 5.1 trillion revenue last year.

The news boosted shares of the parent company, which rose 1.1 percent to Rp 935 on the Indonesia Stock Exchange (IDX) on Tuesday. That compared to 0.1 percent increase in the benchmark index.

Fransisca Nelwan Mok, corporate banking director at Bank Mandiri, said the lender’s the one-year loan to Ciputra Residence showcases Mandiri’s commitment to help increase Indonesia’s housing supply for the public.

“This partnership is a way to tackle the potentially large backlog in housing,” said Fransisca, citing a potential 21.6 million shortage on houses throughout the archipelago by 2030.

Bank Mandiri, the biggest lender in Indonesia by asset, disbursed Rp 10.3 trillion in loans to the property industry in this year’s first quarter, a 23 percent growth compared to the same period last year.

By Vanesha Manuturi on 09:16 pm Jul 01, 2014