“Property is still a good business. So clearly, we will stay in a business that we see a bright future.”
In January this year, Ciputra Development went through one of its most significant restructurings since it went public in 1994, a move that consolidated its position among the country’s largest property firms. To give the firm more liquidity, financial strength and investor appeal, the firm’s founder Ciputra injected two related firms, the listed PT Ciputra Surya and PT Ciputra Property, into his flagship company. Investors cheered the move, driving up the market cap of Ciputra Development by more than 20% to Rp 22 trillion (as of mid-July).
“Previously, investors were only interested in Ciputra Development, and the two other firms only got a small amount of investment. Now, everybody is happy. It is also cheaper for us to do financing under one holding company,” says Ciputra Development President Director Candra Ciputra, 52, the eldest son of Ciputra (who uses only one name).
The move was also timed to offset the property downturn during the last few years—which even Ciputra Development could not escape. Its revenue fell 10% to Rp 6.7 trillion last year, from Rp 7.5 trillion in 2015, resulting in a 33% decline in net profit to Rp 861 billion last year. For 2018, however, Corporate Secretary and Director of Investment Ciputra Development Tulus Santoso predicts that the market will start picking up this year.
The company remains a family affair. Candra, who has an MBA from Golden Gate University, has been leading the company since 2002. The Ciputra family retains a 57% stake in the firm, as well as in other related firms, such as Metrodata. “In a family business, the title in the company is secondary compared to position in the family. Pak Cik [Ciputra’s nickname] can be really active if he likes a project,” says Candra.
Ciputra remains president commissioner of the firm, while Candra’s siblings and in-laws also have roles. Both of Ciputra’s daughters, Rina Ciputra Sastrawinata and Junita Ciputra, are directors. Candra says the family’s strong commitment to the listed firm is a plus for outside investors. “Investors are not willing to take risk if there’s no family control anymore. Investors only put in money, but we are the ones who run the business. So we will maintain our position as the majority shareholder,” Candra says.
The company divides its business into two categories: residential development, especially large-scale township residential, and the development and management of commercial properties. Started in 1981, the company has developed approximately 76 projects over that time, such as housing, apartments, shopping centers, hotels, golf courses, hospitals and offices spread over more than 33 major cities. Aside from residential and retail, the company now also develops strata title apartments and offices. Its leasing services include shopping centers, hotels, apartments, offices, golf courses and water parks.