Publicly listed property developer, PT Pakuwon Jati Tbk (PWON), keeps improving its recurring income through its development of malls and office towers. PWON director, Ivy Wong, recently stated to KONTAN that the Company is looking forward to Supermal Pakuwon Indah Surabaya operating December this year. She estimated that this year’s recurring revenue will keep growing as a result of the recurring income assets addition, that is Tunjungan Plaza (TP)5 and Sheraton Hotel Gandaria City. However, this year’s increment in recurring revenue will not be significant as both assets will start operating Q4 2015. “Mall TP5 operates end of October and the Hotel starts operating end of year. Therefore, the growth is not significant this year.” 

Furthermore, PWON also has not set this year’s target regarding increment in recurring revenue because the Company is still waiting for its 2015 financial report. In Q3 2015, recurring revenue contributed 48% towards the Company’s total revenue. Besides operating Supermal Pakuwon Indah shopping center, the Company is also planning to launch two office towers in the second half of 2015, one in Kota Kasablanka Jakarta and another one in TP6 Surabaya. Around 60% of the both towers will be for sale and the rest will be leaseable.

PWON decided to launch both project between Q3 and Q4 to give them time to assess how the property market perform in the first half of this year. The launching for Kota Kasablanka office tower was originally planned in last year but was postponed due to unfavorable market condition. Ivy, however, has not disclose further about this project.  The Kota Kasablanka project is estimated to be finished by 2018. On the other hand, TP6 office tower is projected to operate by 2017, earlier than its Jakarta counterpart. Both office towers are also anticipated to be able to support marketing sales target or pre sale that PWON has set at Rp 3.1tn this year. Meanwhile, in residential sector, the Company is looking at launching new clusters in Grand Pakuwon Surabaya.

Only Ivy cannot guarantee the timing of the launching because the Company will first assess the situation based on the previous launch of the currently existing clusters. If the existing clusters are sold out then the Company will soon launch new clusters.

In Grand Pakuwon itself the Company has launched three clusters targeting middle to upper market. Each cluster will have around 15 ha of land area. Currently, Pakuwon has approximately 160ha of land bank for Grand Pakuwon project alone.
This year, Pakuwon has budgeted capital expenditure between Rp 1.7tn to Rp 1.9tn. The capex will be mainly spent on projects that have been launched. 
That amount is almost equal to capex spent last year. “Last year we budgeted around Rp 2tn but we only spent Rp 1.7tn,” commented Ivy.

Capital expenditure this year will be financed by both internal cash flow and bank loan with 50-50 composition. The Company still has no plan to sign on new loans as it still has cash flow from syndication loan that the Company entered in 2015 amounted to Rp 1.25tn from PT Bank Mandiri Tbk and PT Bank Central Asia Tbk.

Beside the budgeted capex, Pakuwon has also prepared Rp 400bn – Rp 500bn for land acquisition. To this day, for all existing project, Pakuwon has acquired up to 457ha of land bank which include 4.5ha raw land in TB Simatupang.