An Overview of Bumi Serpong Damai (BSDE)

Bumi Serpong Damai (BSDE), a subsidiary of the Sinarmas Land Group, stands as one of Indonesia’s largest and oldest township developers, with a powerful presence in the Greater Jakarta area. Established in 1984, BSDE’s flagship project, BSD City, has been a cornerstone of its success since its inception in 1989. As of the third quarter of 2024, BSDE boasted a land bank of 4,389 hectares, with 2,156 hectares located within BSD City, ensuring sustained development for the next 15-20 years.

Resilient Pre-Sales Growth: A Key Strength

BSDE has consistently demonstrated exceptional resilience in pre-sales growth, outperforming peers during market downcycles in 2016 and 2020. The company’s FY24 pre-sales were equivalent to 147% of FY19 levels, showcasing its ability to adapt to shifting market dynamics. Forecasts indicate a steady 3% CAGR increase in pre-sales from FY24 to FY26. This growth is attributed to BSDE’s extensive low-cost land bank and its high mortgage mix, which accounts for 80% of total pre-sales, making it a robust proxy for real buyers rather than speculative investors.

Diversified Project Portfolio and Strategic Acquisitions

BSDE’s strategic acquisition of PT Suryamas Dutamakmur Tbk (SMDM) in 2024 further diversified its geographic footprint, expanding its presence into Jakarta’s Eastern and Southern corridors. Key projects include:

• Harvest City: The largest township in Cibubur, spanning 1,350 hectares, with residential land prices ranging from IDR 4-8 million per sqm and homes priced between IDR 600 million to IDR 1.2 billion.
• Rancamaya Bogor: A prestigious township in Bogor with direct toll-road access. Residential land prices range from IDR 9-13 million per sqm, while homes are priced between IDR 1.2 billion to IDR 2.5 billion. A notable feature is the township’s 18-hole golf course.
• Royal Tajur: The smallest township in the portfolio, spanning 88 hectares, with residential land prices of IDR 10-12 million per sqm and home prices between IDR 1.1 billion to IDR 2.1 billion.

The acquisition of SMDM added a land bank of 845 hectares, with an implied land cost of IDR 235,000-314,000 per sqm. This transaction strengthens BSDE’s portfolio and enhances its ability to capitalize on growing demand in these regions.

Key Projects and Developments

BSD City

Located 30 kilometers west of Jakarta, BSD City covers an expansive area of 5,950 hectares. The development is divided into three phases:

• Phase 1: Focused on residential and commercial properties, including ITC BSD and Damai Indah Golf.
• Phase 2: Features flagship commercial properties such as AEON Mall, The Breeze, and ICE BSD.
• Phase 3: Launched in 2021, this phase includes premium clusters like Hiera, Eonna, Tanakayu, and Terravia, with house prices ranging from IDR 1.6 billion to IDR 7.6 billion.

In late 2024, BSDE completed the construction of Toll Serbaraja 1B, enhancing connectivity to the Legok area near Hiera.

Grand Wisata

Situated in Bekasi, Grand Wisata spans 1,081 hectares and offers homes priced between IDR 1.2 billion to IDR 7.5 billion. The township contributed 9-10% of BSDE’s total pre-sales in 2024.

Kota Wisata

Located in Cibubur, Kota Wisata covers 921.5 hectares and enjoys direct access to the Cimanggis-Cibitung toll road. Houses in this township are priced between IDR 1.7 billion to IDR 3.5 billion.

Grand City Balikpapan

BSDE’s only major township outside Greater Jakarta, Grand City Balikpapan, is located near IKN city in East Kalimantan. It contributed 3% of total pre-sales in FY24.

Strong Financial Performance and Margins

BSDE’s premium positioning in BSD City ensures robust margins, second only to Pakuwon Jati (PWON). The company is expected to turn net cash in FY25, supported by strong free cash flow generation and modest capital expenditure. Despite its low return on equity (ROE), which is attributed to overcapitalization and the absence of dividend payouts since 2017, BSDE’s current P/B valuations already reflect this limitation.

Analyst Recommendation

PT Maybank Sekuritas Indonesia re-initiates coverage on BSDE with a BUY rating and a target price of IDR 1,200, representing a 28% upside from the current share price of IDR 935. The recommendation is based on BSDE’s resilient pre-sales growth, strategic project locations, and diversification efforts, which position the company for sustained growth in the coming years.