Property Industry Rebounds, LPKR’s Revenue Expected to Grow Significantly

Jakarta, April 28, 2021 – The Indonesian government has issued a series of incentives to stimulate growth in the property sector. These measures have proven effective in reviving the domestic property market. Several listed property developers have reported improved performance despite the ongoing Covid-19 pandemic.

One such company is PT Lippo Karawaci Tbk. (“LPKR”), which believes that this year will be favorable for the property sector. Despite the current pandemic, LPKR remains optimistic about the strong underlying demand for first-time homebuyers. Based on last year’s sales and early results this year, LPKR noted that the highest demand is for landed houses. In fact, new project launches have sold out within hours.

“This year, we are projecting 30% growth compared to 2020,” said LPKR CEO John Riady. Even before the government introduced tax incentives for property buyers, LPKR had already posted strong performance.

In Q1 2021, LPKR recorded marketing sales of IDR 1.31 trillion, a year-on-year increase of 86% from IDR 703 billion in Q1 2020. Sales during the quarter were driven by mid-market landed house clusters, which accounted for 63% of total sales.

Over 50.6% of Q1 2021 sales were attributed to the successful launch of Cendana Icon, LPKR’s largest landed housing project in Lippo Village, which marked the company’s highest single-day sales performance in over 20 years.

According to John Riady, the highest property demand is for landed homes priced below IDR 2 billion, with around 80% of buyers being first-time homeowners, and approximately 60% utilizing mortgages.
“This reflects real economic activity and real demand, which we must support and continue to nurture,” he stated.

LPKR plans to launch numerous new projects starting in April 2021. “We will continue to grow, and we are seeing strong demand. Even in Meikarta, sales have doubled compared to last year,” he added.

The Value-Added Tax (VAT) incentive borne by the government, available until August, is expected to have a positive impact on LPKR’s performance. According to Chris Aprilliony, an analyst at Jada Utama Kapital Sekuritas, property sales in the western corridor of Jakarta are trending upward, driven by the growing mid-market segment and new product offerings. Therefore, LPKR’s outlook remains strong.
“In the medium to long term, the stock is indeed promising,” he noted.

The successful launch of several new projects has further strengthened LPKR’s revenue outlook. Chris believes the property sector will gain more momentum in the second half of the year, boosting the revenue of property developers like LPKR.
“Especially in the western corridor of the capital,” he added.

F. Rach Suherman, CEO of Property Excellent & Advisory, echoed this sentiment, highlighting that developers like LPKR in the western corridor have a competitive edge in terms of market segmentation. He noted that the IDR 500 million to IDR 2 billion price segment continues to see strong demand, yet supply remains limited.
LPKR’s presence in this segment is a major advantage.
“The segment above IDR 500 million is sizable. In the western corridor, LPKR’s housing supply meets this market demand,” he said.

Suherman also forecasted that the national property sector will experience accelerated growth in the second half of the year as consumer purchasing power improves, supported by government VAT incentives. He further predicted that property demand in Jakarta’s western corridor would outpace that of the eastern corridor.

For further information, please contact:
Danang Kemayan Jati
PT Lippo Karawaci Tbk.
📧 DanangJ@lippokarawaci.co.id