Several key figures from Colliers served as speakers at the recent event titled "Jakarta Property Watch: H2 2023 Market Update and 2024 Property Projections" webinar.
Source: Colliers
One noteworthy aspect to highlight is the current state of Indonesia's property market, which is currently in the recovery stage.
The recovery is marked by a fascinating journey, with landed houses leading the way towards what promises to be a booming stage. Interestingly, this surge is putting landed houses in a race against hotels and industrial properties, which have already established themselves in the booming stage.
Source: Colliers
With the same spirit, PT Sentul City Tbk (BKSL) can now be confidently positioned in its recovery phase, ready to deliver exciting news for property investors.
In the near future, Spring Valley buyers will soon witness the handover of their homes. Anticipated to take place in early 2024, this event marks a historical achievement for BKSL, breaking an almost eight-year hiatus in property handovers.
Having successfully sold all 127 units, BKSL has recorded an impressive IDR 172 billion in marketing sales from Spring Valley which currently in its finishing stages.
The progress witnessed in each zone of Spring Valley speaks volumes about BKSL's commitment to establishing a robust foundation for comfort and security within Sentul City.
Source: BKSL
More milestones are on the horizon as the company gears up for a series of property handovers. The handover of Parkville residences is scheduled for September 2024, followed by Centronia Square and Centronia Residence, both expected to be delivered in 4Q24.
Highlighting the sales achievement of Centronia Square, this accomplishment is a source of pride for BKSL. All 25 units were sold out in 3Q23, generating an impressive IDR 42 billion in marketing sales. Currently, BKSL is planning to relaunch Centronia Residence with a more affordable price, aligning with the demand of property buyers.
Source: BKSL
With numerous upcoming projects in the pipeline, such as Spring Valley Extension and Spring Residence set for handover in 2025, one can only imagine the substantial gains awaiting BKSL. To provide a glimpse, the potential marketing sales for Spring Residence alone are estimated to reach IDR 500 billion.
The recovery observed in properties like BKSL is undoubtedly bolstered by factors such as proximity to infrastructure and transportation facilities, which open up opportunities for property development.
Colliers, in its webinar, emphasized that the LRT and MRT systems should serve as catalysts for enhancing Transit-Oriented Development (TOD), with the potential to stimulate new urbanization. The integration with other public transportation modes is anticipated to fuel property demand, as evidenced by the positive trends seen in BKSL.
Source: BKSL
With improved accessibility and the completion of several cluster developments, coupled with the expected sped-up delivery date of Spring Valley and the restart of Saffron Noble and Opus Park, these factors undoubtedly serve as the driving force propelling business growth.
This momentum holds the promise of achieving our forecasted 64% CAGR in marketing sales over the next five years, aiming to reach IDR 3.6 trillion by 2027.
BKSL Marketing Sales and Projection (Rp bn)
Moreover, BKSL's strategic partnerships with leading banks such as BNI, NOBU, BRI, BTN, and the latest addition, BSI, further enhance the company's position.
For instance, with Bank BSI, homebuyers at BKSL can benefit from a fixed-rate for the first year with a maximum tenure of 30 years. The package includes no administrative fees and commissions, ensuring fixed installments until full repayment.
Source: BKSL
Additionally, BKSL offers an enticing installment program known as the "one price system." Typically, purchasing a home through mortgage, installment, or cash involves different pricing structures, but at BKSL, all payment methods carry the same cost.
This unique approach makes homeownership more affordable for buyers, setting BKSL apart in providing favorable terms to its customers.
In essence, we strongly recommend that investors closely monitor the ongoing and gradual recovery of BKSL, with a keen focus on its marketing sales achievements and improvements in the balance sheet. The evidence of on-track deleveraging progress, as indicated by a decline in net gearing from 0.21x in 2022 to 0.13x, is particularly noteworthy.
BKSL Net Gearing Projection (x)
There is a positive outlook, aligned with the forecast by our analyst, Niko, suggesting that BKSL is poised to achieve net positive gearing within the next six years.
Hence, we anticipate a significant financial transformation to unfold from 2024 onwards and are optimistic that BKSL will deliver a robust performance. As a result, we recommend BKSL with a target price of Rp 122.