Citigroup BSDE analyzed non-rated snapshot

 Takeaways from our property conference — BSDE participated in the Citi Asia Pacific Property Conference 2010. Below we highlight the takeaways from management. BSDE is a property developer built by a consortium of shareholders in 1984 to develop BSD City as a township in Serpong, Southwest of Jakarta. The current major shareholders are Sinarmas Group (50.7% stake) and Warner Investment (16%). BSD City has the largest landbank among listed property companies with 3,200 hectares.

 1Q10 pre-sales — Marketing sales surged 81% y-y to Rp545bn in 1Q10, underpinned by low mortgage rate and more aggressive launches. The company expects to book the entire 1Q10 pre-sales as FY10 revenue. Pre-sales target for FY10 is Rp2trn, up 50% y-y. Landed housing is expected to still contribute about 60% to total pre-sales as in the past few years.

 Recent development — BSD City’s master plan development has 3 phases. The first (1,500ha) has successfully been developed since 1989 and completed in 2008; now it is home to 100,000 residents. It has begun the second phase on 2,000ha of land in the west part of Cisadane River, sketching on middle-up housings, and CBD. The first stage of 850ha is scheduled to be completed in 5 years (2008-13), and the remaining 1,150ha in 2020. The third phase (2,000ha) will take place in 2020, located further west of the river.

 …Landed Residential… — The company is currently developing two clusters located in the second phase zone, Foresta and The Icon, pricing the land at Rp2.2-2.6m/sqm with land size ranging from 84sqm-670sqm. Fifty percent of the presales used mortgage as buyers take advantage of the historic low rate.

 …Office Park… — Located in the heart of BSD City, Sunburst CBD Office Park (42ha) is planned to be the next prominent CBD development in the Greater Jakarta Area. The district will be equipped with advanced infrastructures, caressed by greenbelt areas which ensure cleaner air & water and preserved nature. The company expects to boost its recurring income in the next several years to 30% of total revenue.

 Supporting Infrastructure — BSD City is accessible through several toll roads, mainly by Serpong-Merak (from West Jakarta) and Jakarta-Serpong (from South Jakarta). Jasa Marga has committed to building two toll-road sections with total length of 26.4km in 2011 (Cengkareng-Kunciran, Kunciran-Serpong) that will connect Serpong to the airport. Upon completion, BSD will be accessible by four toll roads.