How Metland Indonesia deals with weaker residential purchasing power
The real estate firm continues to expand with residences that are attractive to consumers because of pricing, the ‘growing house’ concept, and sustainable features.
The decline in purchasing power for real properties after the pandemic might be a great challenge for developers to overcome, but the desire of the Indonesian people to acquire housing remains strong.
According to Wahyu Sulistio, director of PT Metropolitan Land Tbk. (Metland), the complexity of the setbacks in the industry, from company layoffs to inflation and the rise in cost of materials as a result of the conflict in Eastern Europe, housing remains one of the primary needs of Indonesians.
In fact, landed houses are still the prima donna of the residential market, said Wahyu. The Metland executive explained that landed houses have an advantage because they embody the concept of a growing house, where consumers can add space as needed.
His insights are well aligned with the findings of the house search site, Lamudi.co.id, which noted an increase in online property searches of 9% at the end of 2022, despite the high-interest rate set announced by Bank Indonesia. From these findings, landed houses are the dominant search target with 76% of search data from June to December 2022.
“Then the question is how to deal with high demand with reduced purchasing power? So what we are doing is adjusting so that we can deliver more affordable products targeting the middle, lower middle and slightly upper middle segments,” Wahyu told Real Estate Asia.
Mindful of the financial circumstances of its consumers, Metland has implemented a strategic approach to address their needs in particular development areas. The company has designed products with lower selling prices, based on the fixed monthly incomes that many of its customers make as employees.
“First, we made a compact building with enough room that the occupants could renovate in the future. The compact building keeps the selling price affordable,” Wahyu said. Some of the property products offered by Metland include residences with an area of LB30/LT60 square meters and LB35/LT72 square meters.
The company never loses its concept of a growing house in its projects. As a result, even though the building area is small, residents can add space up and to the side at a more affordable price.
Because most of Metland’s consumers use the housing mortgage or Kredit Pemilikan Rumah (KPR) system in obtaining housing, the company also provides convenience from down payment (DP) installments and DP subsidies, to several promos such as free land acquisition taxes or Bea Perolehan Hak atas Tanah dan Bangunan (BPHTB), deed of land sale and purchase or Akta Jual Beli (AJB), and KPR provisions.
How to attract consumers
Besides providing convenience in making payments and trying to provide affordable products to consumers, Metland also offers various facilities to attract consumers.
Wahyu said Metland provides public facilities for residents to be able to carry out outdoor activities, set up a clubhouse, and be close to F&B shops. Each house is also designed with a multi-purpose room that can be a place for residents to work in response to the current work from anywhere trend.
In addition, it offers facilities in the form of access to public transportation modes such as commuter lines. One of its housing estates, the Metland Cibitung in Bekasi, West Java, is positioned as such, making it easier for residents to do activities that require them to commute.
Metland Cibitung also epitomises the Metland principle of sustainability by having a plastic waste processing facility. “We have also prepared a Water Treatment Plant and we have also applied lamps using solar cells and eco-friendly building materials in our housing, such as in Metland Cibitung and Metland Cikarang,” Wahyu told Real Estate Asia.
Another facet of Metland that attracts consumers is its innovative sales through advertising promotions and digital marketing strategies on social media such as YouTube, Twitter and Instagram. “This marketing is quite effective in increasing Metland's brand awareness, but transactions are still commonly done face-to-face because buying a house is a long consideration that involves many family members,” Wahyu said.
Target in 2023
In the first quarter of 2023, Metland earned operating revenues of IDR322.4 billion ($21,56m) and a net profit of IDR68.2 billion ($4,56m). Both rose 30% and 11%, respectively, from the same period last year.
This year, the company is targeting marketing sales consisting of pre-sales and recurring revenue worth IDR1.8 trillion ($120,4m).
Metland’s acquisition in the first quarter of 2023 consists of residential sales and recurring income. Existing projects such as Metland Puri and Metland Cibitung are contributors to revenue from sales in the first quarter, while recurring revenue is obtained from the shopping center and hotel units owned by Metland.
At present, the company is all set to completely develop existing residential projects such as Metland Puri in West Jakarta and Metland Cibitung and prepare a new residential project, namely Metland Cikarang and projects built with the aerocity concept, namely Metland Kertajati.