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Metland allocates Rp 1t to build five hotels (17/02/2012)

Fri, 02/17/2012

Property developer PT Metropolitan Land Tbk (Metland), a subsidiary of property giant Ciputra Group, plans to allocate Rp 1 trillion (US$111 million) in capital expenditure, partly to finance the construction of five budget hotels this year.

The bulk of the expenditure, or about 60 percent, will come from internal cash with the rest from bank financing, corporate secretary Olivia Surodjo said on Thursday.

Metland, through its subsidiary PT Metropolitan Permata Development, and PT Wahana Arthadinamika and PT Dwi Kencana Motoer, signed an agreement on Thursday to establish a new company called PT metropolitan Deta Graha, which will develop budget hotels in various places in Indonesia.

“For its first working plan, Metropolitan Deta Graha will develop budget hotel @HOM in Bandung, Cirebon and Tasikmalaya with a total investment of Rp 70 billion. The budget hotels are expected to facilitate the growing number of tourists and businessmen in those cities,” Olivia said.

The hotels, which will have 60 to 100 rooms, are scheduled to be built in the middle of this year and expected to be completed in 2013. The company aims to build 20 budget hotels by 2015.

“The budget hotels will significantly contribute to revenue, at about 10 percent, if the number reaches 20,” Nandya said.

Metland president director Nandya Widya said that his company expected to see up to a 30 percent increase in revenue and net profits this year.

“This year we are hoping for 20 percent to 30 percent growth in revenue and net profits, in line with the property industry’s estimated growth at about 10 to 30 percent,” Nandya said on Thursday.

The company has yet to announce its financial performance in 2011. However, Nandya said that Metland would likely report double increases in revenue and net profits for 2011 compared to 2010.

Metland’s financial report in September 2011 showed that the company reaped Rp 280.62 billion in revenue, increasing by about 36 percent from Rp 177.77 billion in the first nine months of 2010. Metland’s net profit doubled to Rp 76.19 billion during the January to September period of 2011 from Rp 36.52 billion in the same period of 2010.

The significant increase in revenue will be supported by sales and recurring income.

Olivia said that the company aimed to reap Rp 800 billion from total sales and recurring income, increasing by 11.5 percent from Rp 718 billion in 2011.

“To reach the target, Metland will increase commercial property business in the Grand Metropolitan [the company’s ongoing shopping mall project in Bekasi] and the Hotel Horison Bekasi Extension. The company will also improve promotion for sales of office space and apartments in the Grand Metropolitan area,” Olivia said.