PT Modernland Realty Tbk (MDLN), a midsize listed property developer, plans to raise Rp 1 trillion ($72 million) from issuing bonds, PT PP Properti Tbk (PPRO) tripled its net income to Rp 300 billion ($14 million) last year from 2014, while PT Summarecon Agung Tbk (SMRA) sets aside higher capital expenditures in 2016 to fund more property projects.
Moderland to raise $72m from bonds issue
Modernland Realty, member of Modern Group, plans to raise Rp1 trillion from issuing bonds later this year to pay back debts, corporate secretary Cuncun Wijaya said in a statement. The company has yet to determine a schedule for the issuance, but it has an outstanding $150 million bond due in October.
The bond was issued in 2013 by Singapore-based unit Modernland Overseas, bearing 11 per cent coupon. Modernland Realty plans to spend Rp 1 trillion this year in capital expenditure, the same amount as last year’s realisation investment.
Modernland plans to acquire more land, including 1,300 hectares in Bekasi, West Java, for its development of the Modern Bekasi Residential and Industrial Park. The company will also develop its industrial complex Modern Cikande Industrial Estate in Banten, Cuncun said.
PP Property triple’s net profit in 2015
PP Properti, the property developer unit of state-owned contractor PT PP Tbk (PTPP), managed to triple its net income to Rp 300 billion ($14 million) from 2014 on the back of timely sales of its project. The achievement bolstered the company’s plan to expand with a Rp 600 billion capital expenditure this year to acquire more land.
Groundbreaking of the company’s latest apartment tower – Ayoma Serpong in Banten, Amartha View in Semarang, Central Java, and Grand Dharmahusada Lagoon in Surabaya – lifted the company’s marketing sales to Rp 2 trillion last year. The figure, however, will not enter the company’s financial report before the projects are completed.
“We achieved this thanks to an apt marketing strategy… and punctual project construction,” president director Taufik Hidayat said.
He added that the company plans to raise Rp 300 billion from issuing medium-term notes later this year to help finance its expansion plan.
Summarecon sets aside $194m capex
Other property developer Summarecon Agung has sets aside a Rp 2.7 trillion ($194 million) capital expenditure this year to continue its property projects, president director Adrianto Adhi said. The company plans to use internal funds, loans or proceeds from selling real estate investment trusts (REIT).
Summarecon is now sitting on at least Rp 1.05 trillion in capital after last month securing a Rp 550 billion loan from PT Bank Central Asia Tbk (BBCA), Indonesia’s third largest lender, and issuing Rp 500 billion worth of bonds in November.
Summarecon Agung is also mulling a plan to sell $200 million REITs as an alternative to the failed initial public offering of the company’s subsidiary PT Summarecon Investment Property (SIP), Adrianto said. Adrianto did not elaborate on projects the company wishes to pursue this year.