Developers Propose New Funding Model for Housing
The regional branch of Real Estate Indonesia (REI) is proposing a new funding strategy for President Prabowo Subianto’s ambitious “3 million homes” program, a major national initiative aimed at addressing the country’s housing supply shortages. The association has suggested that developers should increasingly use initial public offerings (IPOs) to raise the necessary funds. Arvin F. Iskandar, the head of REI’s Jakarta branch, emphasized the importance of a stronger connection between the property sector and the capital market, as well as global investors. He noted that currently, only a small fraction—just 1 percent of REI’s approximately 500 members—are listed on the stock exchange, highlighting a significant untapped opportunity to professionalize the industry and enhance competitiveness, particularly for those managing large-scale, strategic projects.
A Systematic Plan for Capital Market Integration
To facilitate this strategic shift toward the capital market, REI has outlined a systematic, multi-year plan. The association plans to work directly with a total of 50 developers to assist them in going public, starting with a group of five companies this year. The long-term vision is to help 10 to 20 developers annually to either launch an IPO or issue other property-related investment instruments. To broaden their reach and appeal, the association is also strengthening its partnerships with major global investment institutions, including private equity and venture capital firms. This phased approach demonstrates a clear strategy to systematically integrate the real estate sector with the financial markets, providing a more robust and sustainable funding pipeline for future projects.
Enhancing Transparency and Policy Engagement
Beyond its direct efforts to facilitate public listings, REI Jakarta is also undertaking several initiatives to improve market transparency and governance. The association plans to establish a new Jakarta Property Index, which will function as a performance indicator for the region’s real estate market. This index will serve as a reliable reference for both domestic and foreign investors, providing greater clarity and confidence in the market. Furthermore, Arvin Iskandar confirmed that the regional executive board is drafting a comprehensive policy brief. This document will contain substantive recommendations that will be formally presented to the government, showcasing the association’s commitment to influencing public policy and ensuring that the regulatory environment is supportive of its market-driven solutions.
