Luke Rowe

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Meet Luke Rowe. The Head of Residential Project Marketing at Jones Lang LaSalle who loves surfing, nature, and most of all his family.

Luke, could we start with a little background information, where are you from?
I was born in Geneva, Switzerland. My grandfather was serving there as the Australian ambassador. My father was in Vietnam as a professional soldier. My mother chose to spend the time in Switzerland rather than being alone in Australia, however our home base is in Manly – a beachside suburb of Sydney.

How long have you been living here in Indonesia?
I first moved to Indonesia in 1993 until 1995, then spent two years in Sydney again. I chose to come back to Indonesia in 1997. I have always specialised in commercial and residential real estate. It has been a wild ride, many years, several presidents, economic upheaval, massive political changes and most of my business time has been spent in and around Jakarta. I learned recently that the greater metropolitan area Jakarta is home to 26,500,000 inhabitants making it the second-largest city in the world after Tokyo.

What do you enjoy most about Jakarta? How do you and your family usually spend your weekends?
Grandtyana is my beautiful Indonesian wife, and school sports and organised sports, like soccer, basketball, swimming and tennis keep us pretty busy. I’m still an avid surfer and regularly make trips to Pelabuhan Ratu. There is a relatively good fraternity of people here who enjoy the sport of surfing and thanks to this I have made some lifelong friends who are as silly and as interested as I am.

Foreign ownership is a difficult and often confusing issue here. How can foreigners invest in property in Indonesia?
I always answer this question with tongue in cheek; marrying a local like I did. But actually that is a flippant answer. Really, there are only four routes. First, you can form a foreign investment company and invest in HGB real estate like the vast majority of Indonesians. This is secure, long-term, renewable title, which is mortgage-able and the company can own a 100% interest in the asset. Second, use a nominee structure (this puts a lot of trust in the nominee). Third, take a long-term lease. A lease contract here is effectively registered. Therefore a long-term lease contract is a very safe way to get the exclusive enjoyment of a property. Obviously this does not deliver the benefits associated with full ownership tenure, but it certainly is a safe way to enjoy a place in Indonesia. Fourth, expatriates with a work permit in Indonesia have the right to purchase property under a formal title called Hak Pakai. It is remarkably similar to HGB, but can be registered directly in the foreigner’s name.

What traps can expats fall into when buying property?
I guess the greatest trap for a young player is to place too much trust in a questionable nominee arrangement. The road is littered with corpses, where people entered into property deals hastily, did not get adequate security of tenure, did not have a mechanism to withdraw their capital and did not have a mechanism to exit the arrangements. My advice is relatively simple: Carry out thorough due diligence, use professional advice and spend the extra money on hiring a law firm capable of property transactions. Before making any purchase decisions, get very clear agreements and buy from reputable developers. Look at financing alternatives ahead of emotional purchase decisions, and be as thorough as possible – because this is a major and expensive decision.

Where do you see Indonesia’s property market headed in the future?
It is incredibly exciting to think that this vast metropolitan area with 26,500,000 people only has approximately 80,000 apartments. As the city continues to develop, as the traffic snarls worsen, as the infrastructure fails to be delivered in pace with population growth, there is a real trend towards inner-city living and we believe that this will continue for the foreseeable future. We are naturally pretty excited by this trend and we have ramped up our residential project marketing business accordingly.

Keep an eye out for JLL launching new projects. We find the middle market segment the most interesting. Capital values are still reasonable even though they are rising swiftly. Rental yields are unbelievably good in comparison to other more developed cities in the region and the world. As Indonesian mortgage rates continue to become more attractive, we will see a growing Indonesian middle-class, becoming more affluent and able to afford this kind of accommodation. This will create long-term demand. Simultaneously foreign companies are expanding in Indonesia and so they will continue to be a requirement for rental accommodation.

Do you think that Indonesia has adequate infrastructure in place to support rapid growth?
Naturally I would like to keep this article as positive as possible. However the infrastructure development has not been sufficient to meet the growing challenges facing this heaving metropolis. So many automobiles and motorbikes are being sold month in and month out and traffic continues to worsen. The public transportation system still requires lots of work and clever thinking in order to actually service population. The tendency is to enjoy the private car, because the public transport alternative is not attractive. I sometimes laugh with my friends when they complain about traffic. I always offer them a very simple solution: “Take an ojek!”

So where do you see yourself in the future, do you plan on staying here in Indonesia or moving on from here?
Life is all about opportunities. My life is focused upon my family, specifically my wife and children. We continue to be happy here in Indonesia. It’s nice to watch my children become bilingual, and to see my wife thrive in her natural environment. Thanks to my very challenging business life and being able to chase waves, I continue to enjoy living here in Jakarta. I have waited a long time for the Indonesian economy to build and grow in the manner that it is right now. It would be foolish to leave any time soon as we are entering a long and prosperous period in this country.

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