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Teddy Tjokrosaputro

INDONESIA - Real Estate & Construction

Stock price increased by 50% over 9-month period

President Director, PT Rimo International Lestari Tbk


As one of the shareholders,Teddy Tjokrosaputro was appointed CEO of PT Rimo International Lestari, Tbk. (RIMO) in March 2017. With more than 20 years experience in various businesses, he has owned and operated many types of industries (real estate development and management, food, textile, retail shops, entertainment, book publishing, and agri-business). He graduated with a BSc in business administration from University of Southern California (USC), and has participated in some business organizations as well as Non-Profit NGOs. 

"We will build affordable, low-cost housing to support the government's One Million Houses program."

Can you tell us more about Rimo International Lestari’s recent acquisition of Hokindo Properti Investama?

RIMO was once one of the largest retail department stores in the country back in the 1990s. Fierce Competition from other Retailers and Online Shops had made RIMO suffer big loss. Being listed in Indonesia Stock Exchange (IDX), Change of Ownership and Management was inevitable. In March 2017, New Management changed the business strategy by acquiring PT Hokindo Properti Investama (HOKINDO), an integrated Property Landbanker and Developer, by issuing new shares in the public valued at IDR4.1 trillion (USD 300 million). In December 2017, from a loss-suffering company, RIMO made approximately Rp 430B in total revenue and Rp 145B in net profit. Stock price increased by 50% in nine-month period of time.

Would you give us a brief overview of Rimo International Lestari’s current activities and key projects?

In Jakarta, we have two projects; one is the apartment building in Kuningan and another is in Gandaria and is still in the planning stage. We are preparing the master plan and applying for the development permits at present. We also have one project in Cianjur, West Java, which is 200ha of land where we will build a golf course designed by Jack Nicklaus. We will sell villas at that development and build a five star hotel.

Will the golf course development in West Java be your biggest investment currently?

No, we have larger investments. Low-cost housing is in fact the largest investment because we will build 30,000 houses for a housing project in West Kalimantan in Pontianak. It is a 800ha development site and we will acquire more land to bring it up to 1,000ha. We will build affordable, low-cost housing to support the government’s One Million Houses program.

Will low-cost housing projects become a major profit center for Rimo International Lestari’s given that this is a continuing government program?

Of course, we want to make a profit; however, we also want to develop the region because once we build in West Kalimantan, the area will become more developed and we can sell higher-priced houses there as well, which will reap greater profits.

How does the financing work for the government’s One Million Houses program?

There are in fact no government loans for the construction of these projects; however, there are subsidized loans for consumers who want to buy the houses. They receive government-subsidized interest rates on their loans and the down payment is only 1%. Homebuyers only pay around half the usual mortgage interest rate under this scheme.

Why did you choose West Kalimantan as the region for this development? Was it through your own feasibility studies or was it a direction from the government?

West Kalimantan is strategically important for the government because it is close to Singapore and Malaysia. Given its strategic location, the government intends to build many projects there. In fact, the government wants to move the capital city to West Kalimantan and also wants to build a large port, new bridges, schools, toll roads, railways, and other infrastructure there. It wants to develop new infrastructure to support all the palm oil plantations in the region as well. When we chose West Kalimantan for this low-cost housing development, it was purely on our own initiative; however, we directed it specifically at the government’s housing program. We believe we have to be involved in building this low-cost housing.

What is the timeline for building these 30,000 low-cost houses?

Beginning in December 2017, we will start Phase I and build 1,000 houses. It is not just local people in West Kalimantan that need these houses. Personnel from the army, navy, and police force also need housing and they qualify for these government loans too. We have a number of other smaller projects around the country as well.

How would you compare the real estate opportunities in Jakarta compared to other parts of Indonesia?

It is only possible to build apartment buildings in Jakarta because land there is extremely expensive. However, outside Jakarta there are still great opportunities to build houses, especially low-cost homes. They are considered like consumer goods—everyone needs them. In particular, with the government subsidy it is like the government giving houses away to people. Therefore, anywhere and anytime a company builds houses it will sell.

What is the current state of the Indonesian property market at the moment?

Some say the real estate sector in Indonesia is slowing down currently. However, it all depends on the type of real estate being built. The market for low-cost homes is not slowing down. No matter how many houses are built they will always be sold. In terms of medium to high-end apartment developments, it all depends on the quality of the buildings and the location. Today, there is always new construction technology being introduced, and we have to be efficient and innovative. Even when we build low-cost housing it has to be of good quality and attractive. We use the latest technology to build houses faster. We must always follow new construction technology, for example, using prefabricated components for walls, floors, and roofs in order to build houses quickly.

How will you finance your future expansion and what direction are you hoping to head in?

Financing will come from the bank as well as from our shareholders because we are a listed company. This means we have access to strategic partners and financial investors. Today, our share price is quite remarkable; RIMO is one of the most active shares on the stock exchange right now, giving us access to funding either through bank loans or financial investors and strategic partners from the capital markets. In terms of the company’s direction, we are still open to new things, for example perhaps buying hotels in regions where we already have a base.



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