21 Mar 2019 - Indonesia (Medan)
Jet lag is manageable as I board my flight at Kuala Lumpur and despite crossing the sea and landing in another country the flight is up and down in just over an hour. I am now in a 2nd country in a week, arriving in the city of Medan, Northern Sumatra, Indonesia looking at commercial development land market. Arriving in the morning means I have avoided all of the long-haul flight midday arrivals, and whilst Europeans may not consider Medan as a destination numerous flights from the Middle east, South East Asia and China suggest we are missing something. I am quickly through immigration and after a week in KL I am less affected by the heat which has climbed to33 degrees, I am in the taxi and arrive at my Hotel and it is not even 11 am.
The city centre is bustling and noisy with what appears to be a constant horn blowing culture, and I am convinced that every vehicle, bike, bus and scooter taxi each having 2 air-horns a piece! The city is home to some 2 million residents, and they all seem to be out to greet me on day one of my inspections. There is a real charm to the place with friendly interaction with everyone keen to shout at the top of their friendly voices ‘’Hello Mister ‘’ to me as I walk the city blocks.
As with all cultures, lunchtime is a key component of life, and the host of my meeting insists I join him and his colleagues for lunch and there is no debate. Sandwiches for us Brits, 3 courses for the French but Indonesians and Medanese in particular…. well loosen the belt because it’s a feast… literally 12-15 plates arrive with the most amazing food and all are addictive.
The city is a sprawling one with its composition predominately low-rise and very closely knitted to each adjoining plot and/ or buildings. Space in the city is limited only because of the density that surrounds each and every location. Government buildings do enjoy set back and large grounds but only a very few commercial projects have some setback. There are also very few high-rise projects, the most notable being the JW Marriott Hotel, and the new Podomoro super block a multi-use development scheme that is on a 5-hectare site directly opposite the JW Marriott. Podomoro It is set to provide modern offices, apartments, hotel and a large shopping centre. There are virtually no new development sites in the city centre and in most cases, sites offered are with existing projects and would require significant redevelopment activity.
Small sites on the perimeter of the city centre are available and these are typically up to 2 hectares and are sought after by developers for Shop House projects - providing literally a shop or storage facility on the ground floor with residential upper parts. These schemes are attractive for developers as they can create numerous Shop Houses on a very small site. Larger sites between 3- 5 hectares are typically further out of the city and whist possible to find due these are typically impacted by multiple ownership issues and to amass sites of this size.
Many of the luxury residential plots and larger sites in Medan are located near the old Polonia Airport, which is also minutes away from the Medan CBD. With continued development the scarcity of residential land in Polonia, developers have focused on developing luxury home areas with facilities/concepts on the fringes of the city, with varying degrees of success. The most prominent developments include the Kompleks Cemara Asri to the northeast, Graha Helvetia to the northwest, Royal Sumatera to the south and Kompleks Tasbi to the west. Asking prices in these locations around the city range from IDR 4 million - IDR 23 million / sq m (USD 282 – USD 1,600) depending on type of scheme, exclusivity and location.
Podomoro multi-use scheme
Typical shop house development project