Any REITS in IDX

[satomoto]

Hi, is there any REIT funds listed on IDX.

Lippo has REIT but it is listed in SGX but not IDX.

 

[satomoto]

Following up on the first question, I've read that

"OJK is calling for tax rates on Reit products to be further reduced from the current 5 per cent to 1 per cent as a way of drawing more investors."

Anyone has any experience?

[1]http://www.straitstimes.com/business/indonesia-aims-to-build-up-reit-market

 

[dafluff]

There is like one REIT I think on IDX. There are also a bunch of property and developer companies.

https://www.indonesia-investments.c...-ihsg/property-and-real-estate-index/item901?

 

[dafluff]

Also, the Indonesian term for REIT is DIRE (Dana Investasi Real Estate), in case you want to do searches on it.

The one listed on IDX is Cipta Dana https://www.bloomberg.com/quote/XCID:IJ

 

[Asun]

Judging from price to rent ratio for many Indonesian real estate, I'm wondering how REIT can make any money at all.

 

[satomoto]

Also, the Indonesian term for REIT is DIRE (Dana Investasi Real Estate), in case you want to do searches on it.

The one listed on IDX is Cipta Dana https://www.bloomberg.com/quote/XCID:IJ

Thanks! I've just found out that it's call DIRE in bahasa, though DIRE doesn't sound like a very good name for a stock term, lol.

 

[satomoto]

Judging from price to rent ratio for many Indonesian real estate, I'm wondering how REIT can make any money at all.

Do you mean the price of rent is too low, or the price of purchasing a property is too low.

Frankly having lived in a few countries, Indonesia's price/rent ratio is the best for a landowner. A purchased property seems to be able to recoup the investment in ~15 years which is super fast compared to many other markets.

Comments welcomed

 

[lifelongexpat]

Other attractive destinations include Panama, Jordan, Colombia, Georgia and Moldova.

http://nomadcapitalist.com/2015/12/02/5-best-countries-for-property-rental-yields/

I believe this was last updated in April this year.

 

[Daniel50]

Do you mean the price of rent is too low, or the price of purchasing a property is too low.

Frankly having lived in a few countries, Indonesia's price/rent ratio is the best for a landowner. A purchased property seems to be able to recoup the investment in ~15 years which is super fast compared to many other markets.

Comments welcomed

I have found rents to be cheap for houses, in general. You could spend 3 billion for a place or rent it for 60 million per year. Try recouping your investment esp. through a mortgage on that. It seems apartments are a bit more expensive, compared to a house. Some areas are obviously more expensive but a person can get rentals for quite cheap really.

 

[Asun]

Do you mean the price of rent is too low, or the price of purchasing a property is too low.

Frankly having lived in a few countries, Indonesia's price/rent ratio is the best for a landowner. A purchased property seems to be able to recoup the investment in ~15 years which is super fast compared to many other markets.

Comments welcomed

Rent is way too low in Indonesia to make any money, particularly combined with the high interest rate for mortgage.
For comparison, the same amount of money earning interest of 8%, which is doable in Indonesia would double in less than 10 years. This is a lot less risky than holding property which requires maintenance, property tax, tenant turnover, etc.
One should never bank on the asset appreciation when considering feasibility of a rental property.

 

[dafluff]

Do you mean the price of rent is too low, or the price of purchasing a property is too low.

Frankly having lived in a few countries, Indonesia's price/rent ratio is the best for a landowner. A purchased property seems to be able to recoup the investment in ~15 years which is super fast compared to many other markets.

Comments welcomed

It really depends on location, but in general rental returns are low. Especially for residential areas. I routinely rent land at 1/100th of the sale value (eg. sale price Rp 500 million, rental price Rp 5 million/year) for long term rentals (30+ years). The land lord expects the return to come from any improvements I add on the land, but will have to wait at least 30 years for it.

Commercial real estate has better rental to purchase ratio, as I understand it.

The REIT (or DIRE, lol) that is listed on the IDX has not been an attractive investments, with around 6% yield and no discernible increase in price over the last 5 years.

 

[satomoto]

Rent is way too low in Indonesia to make any money, particularly combined with the high interest rate for mortgage.
For comparison, the same amount of money earning interest of 8%, which is doable in Indonesia would double in less than 10 years. This is a lot less risky than holding property which requires maintenance, property tax, tenant turnover, etc.
One should never bank on the asset appreciation when considering feasibility of a rental property.

That's a valid point. It never occured to me that in Indonesia you can actually double your savings in 10-12 years simply through savings. This is quite unheard of. I thought rent/price ratio was good, but now that we factor TD, it's actually TD that is safer.

 

[satomoto]

It really depends on location, but in general rental returns are low. Especially for residential areas. I routinely rent land at 1/100th of the sale value (eg. sale price Rp 500 million, rental price Rp 5 million/year) for long term rentals (30+ years). The land lord expects the return to come from any improvements I add on the land, but will have to wait at least 30 years for it.

Commercial real estate has better rental to purchase ratio, as I understand it.

The REIT (or DIRE, lol) that is listed on the IDX has not been an attractive investments, with around 6% yield and no discernible increase in price over the last 5 years.

Thanks that's an interesting observation. I was wrong because I calculated that you get to recoup in 15 years in areas like Sudirman or Senayan area. But IDR's interest rates itself is also racing very fast.