Nusantara New Capital: Post-incentive preparation
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Ibu Kota Nusantara: Ancang-ancang pascainsentif
14 March 2023
By: Afiffah Rahmah Nurdifa and Hendra Wibawa
Several investors are preparing to invest in Nusantara Capital City (IKN) in East Kalimantan following the ease of business stimulus in the new capital city.
IKN in North Penajam Paser in East Kalimantan is a new magnet in Indonesia.
The strength of IKN to attract capital has improved after the issuance of the investment incentive regulation set forth in Government Regulation No. 12/2023 on Granting of Business Licensing, Ease of Doing Business, and Investment Facility to Business Players in Nusantara Capital City.
One of the investors that is interested in IKN is PT Ciputra Development Tbk (CTRA). The leading property developer is starting to prepare to invest in IKN.
CTRA Director Harun Hajadi said that Ciputra is starting to study locations in IKN that can be developed into integrated areas in the new capital city. “We have to study it. For example, regarding the location, and is the market medium term or long term? What is the market segment? What is the product? And other [aspects],” he said to Bisnis on Monday (13/3).
CTRA is currently studying Government Regulation No. 12/2023 to plan suitable development projects in IKN.
However, Harun has yet to confirm the schedule as it is still in the study stage. “It is still being studied, but we will provide support. So, the future will be great,” he said.
Ciputra is currently focusing on a new project, Citra Garden Serpong, which is a townhouse in Cisauk with three clusters sold during the pre-launching in February 2023.
CTRA is planning to release the newest cluster in May 2023 that has 2 storey and 3 storey houses. The prices are predicted to increase by 10% from the previous clusters.
Ciputra Director Budiarsa Sastrawinata said that he is interested in participating in the IKN development project.
This is proven by a letter of intent that was submitted by Ciputra Group to the government to carry out activities in IKN.
“The letter of intent has been submitted by Ciputra Group to carry out activities in IKN. We believe that the letter will be followed up to make a new history,” Budiarsa said at IKN’s market sounding in October 2022.
Real Estate Indonesia (REI) Foreign Relations Deputy Chairperson Rusmin Lawin reckoned that the ease of business stimulus set forth in Government Regulation No. 12/2023 is quite progressive in attracting investors. Moreover, the incentive is in line with the demand of business players and improves the confidence of investors in IKN.
“That is what we have always needed. The building use permit (HGB) of 80 years is enough, and it is even business friendly. We hope that this can be a legal certainty for investors,” he said.
The regulation that was signed by President Joko Widodo on 6 March 2023 regulates business use permit (HGU) to be 95 years and HGB to be 80 years for business players.
Article 18 of Government Regulation No. 12/2023 states that the period of HGU over the management right (HPL) of IKN Authority shall be granted for a maximum of 95 years through one cycle of three stages.
In the first stage, a granting of rights is provided for a maximum of 35 years. In the second stage, an extension of rights is provided for a maximum of 25 years. Then, in the third stage, a renewal of rights is provided for a maximum of 35 years.
The period of HGB over the HPL of IKN Authority and the right of use shall be granted for a maximum of 80 years through one cycle with a granting of rights of 30 years, an extension of rights of 20 years, and a renewal of rights of 30 years.
The HGB that is provided for one cycle that has a maximum period of 80 years shall be specified in the decision to grant the rights recorded in the HGB certificate.
Next, HGB extension and renewal are provided after 5 years that the HGB has been used and/or utilised effectively according to the purpose of the granting of the rights.
Regarding this matter, the HGB regulation is specified to building housing property and to transfer them to the people.
