On 8 May 2020, the Republic of Indonesia's cabinet secretary promulgated Presidential Regulation Number 60/2020 (PR 60/2020) about Indonesia's capital city, which have been signed earlier by President Joko Widodo on 13 April 2020. The PR 60/2020 introduces the 2020-2039 spatial plan and zoning regulation for Greater Jakarta Area, which in this context is known as Jabodetabek-Punjur. Apart from providing a higher legal basis for the local leaders to construct their detailed spatial plan and zoning regulation, this new PR 60/2020 also contains some important information for all real estate actors. After a quick skimming, we found PR 60/2020 implies two important things that will shape our real estate industry landscape for years to come.
First, DKI Jakarta will still serve as Indonesia's capital city for the moment, at least on paper. Political and economic situations might change suddenly in the future; therefore, we cannot safely assume that the government has abandoned the new capital city plan in East Kalimantan. However, this situation does coincide with our internal view about the risk associated if you are investing in the new capital city hype. You may read our full internal view here.
Secondly, the built-environment density in DKI Jakarta could be higher than ever before. In PR 60/2020, the DKI Jakarta region was designated as the core city area with national and international importance. As a consequence, the new regulation allows DKI Jakarta to have a higher density in most areas. The notorious well-preserved green area, South Jakarta, is also affected by the new regulation. Yet, how the provincial government and other stakeholders' actions to capitalize on this new regulation are still unknown, especially in the midst of the COVID-19 pandemic situation.
In the end, for those who are interested to read the PR 60/2020 in full, we have provided links to download the documents in PDF format.
Author: Restaditya Harris