October 2017

Feasibility Study IBID Jakarta

Study of Relocation Plan to Astra Biz Centre BSD

FOR INTERNAL DISCUSSION PURPOSES ONLY

STRICTLY PRIVATE AND CONFIDENTIAL
 Executive Summary (1/2)
PURPOSE
 IBID was offered by Astra International to fill 23,000 m2 of Astra Biz Centre (ABC) in BSD for 10 years
 This feasibility compares the investment return between 2 alternatives: stay on current location option or move to ABC BSD.
 This feasibility also calculate the maximum ABC lease price if IBID requires the same IRR as if they stay at current place

RESULTS
 If ABC land rent price/year is 240,000/m2 (raw land), the relocation option is less feasible for IBID (IRR is below 60%). The maximum
rent price IBID can absorb is Rp135,600/m2, but includes the PPh 23 and the cost of land preparation until it is ready to be used.
Option A: Option B:
Stay at current location Move to Astra Biz Centre BSD
Ciputat: 10,000 m2
Veteran: 411 m2 If we set equal NPV same with existing, the max
Area size Astra Biz Centre: 23,000 m2
Cikunir: 6,300 m2 rate is Rp95,250/m2/year (include PPh 23 and
Total: 16,711 m2 cost of land preparation). The IRR is 95.4%

Average Rp111,702/m2 until Normal rate: Max rate (set IRR = existing): PBB rate:
Lease
year 4, and assumed to Rp240,000/m2 (raw land), Rp135,600/m2 (ready to use Rp12,700/m2 (raw land),
rate/year
increase 150% in year 5. 10% increase per year land), 10% increase per year 10% increase per year
Land rent: Rp24.3 bio Land rent: Rp88 bio Land rent: Rp49.7 bio Land rent: Rp4.6 bio
Building: Rp4.14 bio Land prep: Rp11.5 bio Land prep: - Land prep: Rp11.5 bio
Total 10 Year
Equipment & LVA: Rp4.1 bio Building: Rp4.5 bio Building: Rp4.5 bio Building: Rp 4.5 bio
Capex for FS
Total: Rp32.46 bio Equipment & LVA: Rp4.1 Equipment & LVA: Rp4.1 bio Equipment & LVA: Rp4.1
assumptions
bio Total: Rp 58.3 bio bio
Total: Rp 108.1 bio Total: Rp24.7 bio
10-year NPV NPV = Rp56.6 bio NPV = Rp27.9 bio NPV = Rp51.5 bio NPV = 56.7 bio
and IRR IRR = 85.79% IRR = 42.0% IRR = 86% IRR = 69.8%

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 Executive Summary (2/2)
ADDITIONAL SCENARIOS
 If IBID should rent in ABC with normal rate (Rp240,000/m2/year, under what condition IBID can generate 60% of IRR?

Option A: Option B:
Stay at current location Move to Astra Biz Centre BSD
Ciputat: 10,000 m2
Veteran: 411 m2 Astra Biz Centre: Astra Biz Centre: Astra Biz Centre:
Area size
Cikunir: 6,300 m2 23,000 m2 23,000 m2 15,000m2
Total: 16,711 m2
Business Current Condition and Current Condition and Optimist Growth (At Year 6, Current Condition and
Assumptions grows modestly grows modestly unit sold is 2x of current) grows modestly
Average Rp111,702/m2 until Normal rate: Normal rate: Normal rate:
Lease
year 4, and assumed to Rp240,000/m2 (raw land), Rp240,000/m2 (raw land), Rp240,000/m2 (raw land),
rate/year
increase 150% in year 5. 10% increase per year 10% increase per year 10% increase per year
Land rent: Rp24.3 bio Land rent: Rp88 bio Land rent: Rp88 bio Land rent: Rp57 bio
Building: Rp4.14 bio Land prep: Rp11.5 bio Land prep: Rp11.5 bio Land prep: Rp7.5 bio
Total 10 Year
Equipment & LVA: Rp4.1 bio Building: Rp4.5 bio Building: Rp4.5 bio Building: Rp 4.5 bio
Capex for FS
Total: Rp32.46 bio Equipment & LVA: Rp4.1 Equipment & LVA: Rp4.1 bio Equipment & LVA: Rp4.1
assumptions
bio Total: Rp 108.1 bio bio
Total: Rp 108.1 bio Total: Rp73.4 bio
10-year NPV NPV = Rp56.6 bio NPV = Rp27.9 bio NPV = Rp84.8 bio NPV = 42 bio
and IRR IRR = 85.79% IRR = 42.0% IRR = 60% IRR = 60%

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Projection of IBID Jakarta Performance - Existing

Variable Cost Fixed Cost

Rp4.9 Billion, 5%
AUCTION Cost 14.39% Revenue EXPEDITION Cost 2.58% Revenue Employee Cost JKT
increase/year
Rp1.4 Billion, 5%
SECURITY Cost 2.36% Revenue OTHER Cost 2.18% Revenue Other Opex JKT
increase/year
ADVERTISING & IBID HO Management Rp12.1 Billion, 5%
7.35% Revenue INCOME TAX cost 25% EBT
PROMOTION Cost Fee (ALL HO Expense) increase/year
OUTSOURCING Cost 3.14% Revenue

Investment Assumptions
Projection Length 10 Years
Working Capital Requirement 3 months
Cost of Capital 100% Equity, with cost of 20% p.a.
WACC 20%

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 Investment Assumptions for Feasibility Study
Asset Value for Existing Condition

Capex for ABC – Normal Price Capex for ABC – Max Price Capex for ABC – PBB Rate Price

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Investment Schedule for Feasibility Study
For 6 years contract,
Rent/year increase 10% p.a

Notes: Investment of land in year 5 is to renew land rental contract for 6 years. Investment in building, LVA and equipment is to replenish the obsolete assets
Capex for land preparation,
office and auction house

(Rp240,000/m2/year; grow 10% p.a.)

Capex for office and auction

house

(Rp135,600/m2/year; grow 10% p.a.)

Capex for land preparation,

office and auction house

(Rp6,400/m2/m2/year; grow 10% p.a.)

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 October 2017

Scenario: Stay at Current Location

Current Scenario Based on Existing Business Condition and Grows Modestly

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Projected Income Statement: Stay at Current Location

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Projected DCF: Stay at Current Location

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 October 2017

Scenario 1:
Relocate to ABC with Rp240,000/m2/year Rent Price
Current Scenario Based on Existing Business Condition and Grows Modestly

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Projected IS: Relocate to ABC (Rp240,000/m2/year) – Current Ops

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Projected DCF: Relocate to ABC (Rp240,000/m2/year) – Current Ops

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 October 2017

Scenario 2:
Relocate to ABC with Rp240,000/m2/year Rent Price
Optimist Scenario to Achieve IRR 60% (Upgrade Revenue, Maintain Margin per Car and
Reduce Auction Cost)

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Projected IS: Relocate to ABC (Rp240,000/m2/year) – Optimist Ops

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Projected DCF: Relocate to ABC (Rp240,000/m2/year) – Optimist Ops

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 October 2017

Scenario 3
Relocate to ABC with Rp240,000/m2/year Rent Price
Current Scenario Based on Existing Business Condition and Grows Modestly. However, we
rent only 15,000 m2

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Projected IS: Relocation to ABC; Rent only 15,000m2; Existing Ops

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Projected DCF: Stay at Current Location

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 October 2017

Thank You

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 October 2017

Appendix

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Projected Income Statement: IBID’s Max Price (Rp135,600/m2/year)

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Projected DCF: IBID’s Max Price (Rp135,600/m2/year)

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Projected Income Statement: PBB-rate Price (Rp12,700/m2/year)

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Projected DCF: PBB-rate Price (Rp12,700/m2/year)

FOR INTERNAL DISCUSSION PURPOSES ONLY 24

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PBB Calculation for Astra Biz Centre

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