Blog

By: Prabowo Sutantyo

Surabaya, 2016

Recently we had the chance to re-visit the second largest city in Indonesia, Surabaya, for a condominium development plan, this time in the Northern part of Surabaya. Surabaya is home to 3.2 million people, with much of its development located in the City Centre. This is where high-rise buildings from condominiums, malls, to offices can be found, typial of a metropolitan city that can be found elsewhere.  But what if a high-rise residential development is to take place in an unlikely neighborhood, outside of the prime area of the city centre?

Location

In Northern Surabaya, there lies a historic religious site of Sunan Ampel Mosque, with a neighborhood infamously known as “Kampung Arab” (Arab village). This is a vibrant community with its residents largely consists of the Indonesian-arabic ethnicity. Most of the locals here are and has been merchants for generations, which shapes the area into a busy marketplace with various trade activities, food stalls opening until midnight, and of course its main atraction as a religious tourism destination. You can expect the area to be packed with tourists daily, as well as relatives from other cities returning to visit their families especially during Ramadhan.

Dwellings

Residents of Ampel neighborhood’s main preference is to reside close to the Sunan Ampel mosque. What’s most striking about residential houses in the area is that they are very densely clustered, strongly characterized by narrow roads where cars are not allowed along most of the residential roads. Apparently, families are reluctant to move out of the area, as they have very strong attachment with this ‘village’ they call home. Over time, homes have evolved into typically smaller lots, to enable their second and even third generation to live in the same area as well. This also resulted in scarce parking space, which most homes in the area does not have.

However, given its physical limitations, housing prices is exceptionally high. At almost Rp.1.8 Billion (end 2015 price), this will only get you a small 2-storey house on a 60 sqm land. Meanwhile, population is steadily growing. It’s obvious that there is shortage of living space in this neighborhood. It seems inevitable, that to enable the community to grow further within the neighborhood, it needs to start building a high-rise condominium to maximize space.

Competition

Our study on the Condominium market in Surabaya shows that high-rise condominiums are mostly found within the city center (Central Surabaya), which has wider range of facilities and amenities. Most importantly, this allows broader reach of various potential target markets. Such is the case with new condominium projects in Surabaya like Praxis Apartment, The Peak & One Icon (at Tunjungan Plaza), and the recently completed Sumatera 36. A notable highlight from the study also revealed that buyers are found to be mostly investors expecting to acquire capital gains, aside from just a handful of end-users. This of course is not a surprise, as speculators and investors are commonly the driving buyers in big cities.

However, in this case, a high-rise condo development in Ampel neighborhood of North Surabaya would have to mainly target the niche market in the neighborhood, who are in desperate need of a living space. Going high-rise would enable them to have a decent living space, with facilities such as parking space as an added value they never could have had. In short, potential end-users would be the main target market, as opposed to speculative buyers commonly found in most condominium projects in the city centre of Surabaya (as is commonly the case in Jakarta).

Going High Rise?

Going high-rise in Ampel neighborhood of Northern Surabaya, to a certain degree would therefore makes sense as the area is expected to see leaps in their population. Urban planners increasingly see high-rise as the answer to reducing urban sprawl (to bigger cities and towards city centers) and creating more sustainable cities and neighborhoods. One may argue that this may transform the face of the the neighborhood, and whether people are ready to live high-rise is yet to be proven, where the market is yet to be tested. Of course, this is just one layer of the complication. Adapting to living high-rise generally requires a certain period of time, and there are bound to be environmental impacts.

Perhaps, an underlying factor that justifies for a high-rise vertical living is the foundation upon which they stood: as the prime necessity to fulfill a shortage of living space for conventional landed residential homes. And hopefully, this may shape the neighborhood towards a more sustainable living for the younger generation in the long run, which still very much like to preserve their bond with their community.