Jakarta. Industrial estate developer Puradelta Lestari has set aside Rp 900 billion ($67 million) in capital expenditure this year, the bulk of which will be used for land acquisition and developing infrastructure in its integrated township in Cikarang, West Java, the developer said in a filing to the Indonesia Stock Exchange on Monday (22/05).
"At least Rp 700 billion will be allocated towards building infrastructure in Kota Deltamas, while the remainder will go towards buying new land," Puradelta Lestari corporate secretary Tondy Suwanto said. He added that the company will use internal cash for capital expenditure.
Kota Deltamas is an integrated township in Cikarang, with a total development area of 3,053 hectares and a signature project named Puradelta.
As of Monday, the company had already sold 36 hectares of its industrial land to tenants, which include foreign and local manufacturers. This figure is equivalent to 60 percent of the company's target for this year.
Land sales are expected to increase further this year.
The developer has achieved Rp 559 billion of its Rp 1.5 trillion marketing sales target the first quarter.
Puradelta also suffered from a slowdown in property demand this year amid challenging economic conditions. This saw the developer's net income decline 54.6 percent year-on-year to Rp 123 billion in the first quarter.
Revenue was also down 68.5 percent to Rp 222 billion.
Puradelta has been diversifying its business by developing its non-industrial business segment, such as commercial and residential developments, to expand revenue sources.
The company still relies on its industrial estate business, which involves the sale and management of land for tenants in its estate. The bulk of its revenue, or 80.5 percent of the total as of end of March this year, came from this segment.
This proportion has been reduced from 98.7 percent in the same period last year, amid a strong push by the company to diversify.
The commercial business segment contributed 12.1 percent, while the residential and hotel business segment contributed 3.8 percent and 3.6 percent, respectively.