Property group, PT Javaland Promosia Indonesia and Singapore-based real estate crowd-funding company CoAssets Pte Ltd has set up a strategic joint venture (JV) for the country’s first crowd-funding platform which will be launched in Surabaya, East Java. The move is part of the CoAssets’ strategic plans to expand into the growing Indonesian market.
CoAssets, which was recently listed on the National Stock Exchange of Australia to form CoAssets Limited (CoAssets) (NSX code: CAX), will hold 49 per cent shares in the joint venture firm with the remaining 51 per cent owned by Javaland. Javaland will utilize the CoAssets’ platform for all its property developments in Indonesia, and will facilitate the introduction of new developers to the JV, CoAssets said in a statement.
“This joint venture is a key step in CoAssets’ plans to expand throughout the ASEAN region. Javaland has been successfully operating in Indonesia for a decade, building solid relationships with both the investment community and government departments,” Getty Goh, CEO of CoAssets said.
“We are also very fortunate to be working with JavaLand, spearheaded by Fernanda Reza Muhammad and Christopher Koh. While Muhammad has a deep and extensive network within the Indonesian business community, having been the Committee Chairman for the Economic Development of Central Indonesia Regional of the Indonesian Chamber of Commerce and Industry from 2009 to 2014,” it said.
Koh is a successful Singaporean entrepreneur and has businesses in several ASEAN countries, including Indonesia.
“Through this partnership, we are confident that we will be able to rapidly grow our investor and revenue base, by providing users with a greater array of real estate investment opportunities. Our aim is to be the major real estate crowd-funding platform in Asia-Pacific,” added Goh.
Real estate crowd-funding potential
Indonesia is South-East Asia’s largest economy ($890 billion), and PwC recently rated Jakarta as a top 3 destinations for real estate investment in the Asia-Pacific region, and first for development potential.
“I believe that Indonesia has a lot of potential and this sector looks set to grow with the recent initiatives introduced by the Government. We are contemplating in doing a platform ourselves. However we eventually chose to work with CoAssets as they are a listed company and a clear market leader in the area of crowd-funding, especially within the region,” CEO of Javaland Muhammad said.
A major growth opportunity exists for crowd-funding, as land acquisition by developers in Indonesia cannot be funded by domestic bank loans. As a result, local property players are increasingly open to tapping offshore bond and bank loan markets or alternative methods of funding, which is a niche that the JV firm seeks to penetrate.
To kick start outreach efforts, the JV will collaborate with Indonesian financial institutions to organize a two-days Expo for Property, Investing and Crowd-funding (EPIC) in Surabaya on Nov. 25-26, 2015. These will be close door trade events, organized for the clients, as well as staff, of these institutions.
Christopher Koh, Director of Javaland said CoAssets has been organising these series of expos for the last two years and he has witnessed the success of crowd-funding through these events. Therefore, he expects the two-day event the generate investors’ interest.
“Akin to previous expos, EPIC also gives us an avenue to engage the local financial institutions. For example, DBS Bank was the venue sponsor for EPIC (Singapore) 2014, while MayBank was the title sponsor for EPIC (Singapore) 2015. Similarly, we are currently in deep discussions to work with Indonesian financial institutions for EPIC (Surabaya) 2015 and hopefully that will translate into a long-term working relationship with these entities.”