REPUBLIKA.CO.ID, JAKARTA -- The Investment Coordinating Board (BKPM) said strong growth was recorded in direct investment in the property sector in 2017. BKPM estimated the trend to continue through 2018.

"Investments rose 36 percent in the housing, industrial estates and office buildings projects and 41 percent in the sub-sector of hotels and restaurants," head of the sub-directorate of Economic Area of BKPM Noor Fuad Fitrianto said here on Wednesday.

Noor Fuad said foreign investments (PMA) still were dominant accounting for an average of 70 percent in the sub-sector of housing industrial estates and office buildings and 77 percent in the sub-sector of hotels and restaurants. He said BKPM will seek to create program of partnership with regional administrations to increase investments not only in the property sector.

"Cooperation with regional administration is needed especially related to licensing facility for investors to implement their projects," he said.

He said there are many challenges to be coped with in the implementation of investment as reflected by low realization of investment commitments. There were investment commitments cumulatively valued at Rp8,239.1 trillion both foreign and domestic investments from 2015 until the first quarter of 2018, but realization was only 27.1 percent, he said.

"We continue to push for realization of investment commitments, but we still have many bottlenecks hampering investments," he said.

"The target is that investments would grow still in 2018," he added.

Meanwhile, deputy chairman of the Indonesian Real Estate (REI) Hari Ganie said the role of related government agencies Ministry and Industry is needed in boosting expansion of the property sector.

"Development of industrial estates will need support in the policy of the Industry Ministry and development of the hotel and restaurant sector will need cooperation with the Tourism Ministry," Hari cited.

Simplification of the licensing procedure both in the center and regions is an important factor to attract investment not only in the property sector, he said.

Simplifications in procedure is needed such as inbanking , infrastructure and taxation, he said, adding, there are 10 licenses to be secured in the regions.

Hari said decline was recorded for the foreign investment in 2017 both in number of investors down from 1,151 to 302 companies - in value shrinking from US$2,321.5 million to US$779.9 million.

He said the property sector still is attractive for both foreign and domestic investors in 2018. Hari said political, legal, security and economic growth stability and domination of middle class population by 40 percent and improvement in the availability of infrastructure make the country a favorite place for investment in the world.

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