Indonesia is one of the fastest growing economies in the world, thanks to an enterprising, hardworking middle class. These opportunists, accounting for 20% of the population, flood to Indonesia's biggest cities in search of new career opportunities and contribute substantially to the nation's economic growth.
However, the 52 million Indonesians that fall into this bracket are arguably the worst off. With prices skyrocketing in bigger cities, the middle class often need government subsidies to buy. These however are unobtainable due to their higher-income bracket.
Wealthy investors are also interested in the property market, further contributing to the housing shortage in cities. This has seen housing backlog increase over time with years of slow to no improvement on the supply side. Unfortunately, building new middle-class property in Indonesia's cities has a unique set of challenges many companies are not willing to take on.
Indonesian property developer BSA Land has devised a pioneering solution with an ESG-driven approach to property development. According to co-owner Steve Suryadinata, the previously high-end property developer saw a gap in the middle-class market that others were avoiding. "Typically, property developers want to be associated with luxury to quickly build their brand," he says."We have taken a different angle and believe that BSA Land can create a much bigger impact by providing high-quality homes at affordable prices."
Today, the company is running 30 projects across Indonesia. This has resulted in the development of 20,000 residential and commercial units primarily for millennials and young working families. The projects have been hugely successful so far, which can be attributed to the company's insightful outlook: "Knowing the positive impacts that you give to society, can often outweigh the monetary benefits," Steve Suryadinata says.
Rather than building investor-owned ghost towns to maximize profit, the company strives to create vibrant middle-class communities. "80% of our buyers are young families, as are 80% of our employees. This allows us to directly relate and understand their struggles, where it largely serves as the foundation of our mission to combat the housing crisis in our country that continues to grow". Alongside housing, the commercial developments promote entrepreneurship and provide opportunities for SMEs, further bolstering the rapidly growing economy.
The company's success continued through the pandemic, with sales increasing by20% in 2020 to 1,500 units. Accolades have followed including multiple international awards from Real Estate Asia. Their collaborative approach in sharing expertise with competitors has also contributed to the snowball effect in the sector and has seen large numbers of affordable housing for millennials, young families, and newly-weds newly constructed.
Overall, nearly half a million people have benefitted from BSA Land developments, showcasing how property developers can enter the middle-class property markets successfully, both financially and socially. Housing is a basic need and the increasing effect of the wealth gap continues to trigger housing crises all over the globe, making this an important model for other property companies to adopt.
BSA Land is the largest property developer in Indonesia, specializing in the middle-class sector. The company believes greater impact can be created by focusing on social impact rather than profitability alone. It has won multiple international awards for their contribution to the Indonesian market and positive social impact.