Pagebluk COVID-19 Makes Several Property Developers Layoffs

Illustration. (Angga Nugraha / VOI)

JAKARTA - Pagebluk COVID-19 also beat the property business in the country. Property developers expressed difficulties and eventually had to make a decision to terminate some of their employees.

Layoff steps were taken by the developers because of the stagnant cash flow of the company. Pagebluk COVID-19 also disrupts the company's operational activities.

As a result, a number of activities in the property business were running on a limited basis and even stopped within this one to three months. One of the property developers, PT Metropolitan Land (Metland), in a disclosure of information on the Indonesia Stock Exchange website quoted on Thursday, May 28, said that 17 employees had laid off 17 out of 1,105 employees. Meanwhile, 221 others were affected with other status.

"The corona virus has disrupted activities in the mall business line in Bekasi and Cileungsi as well as the hotel business in Bekasi, Cirebon and Bali," said Director of Metropolitan Land Tbk, Olivia Surodjo.

He explained that regarding the mall business, the operational restriction was initiated by a reduction in opening time to the limited number of tenants' operations considering that they were only allowed to open a few tenants according to the PSBB provisions. The mainstay malls for this developer are Mall Metropolitan Bekasi and Grand Metropolitan Bekasi.

In fact, the contribution of income from affected operational activities reached 25 percent of total revenue during the past year. Olivia said that his party was trying to minimize the effects of the COVID-19 outbreak by preparing several policies.

"To minimize the impact further, Metland is trying to maintain the availability of cash flow so that it is sufficient to finance operational needs and pay bank loan obligations until the end of the year," Olivia explained.

In addition, continued Olivia, Metland implements more efficient and effective business processes in operational activities, limits spending on advertising and marketing promotion activities, delays the development of new projects, and delays or slows down the construction of ongoing commercial projects.

"Then, delay the purchase of land for expansion of new projects and maintain the company's financial ratio in accordance with the provisions required by the bank," he said.

Apart from Metland, another developer affected by the COVID-19 outbreak is PT Sentul City Tbk. The company also had to lay off 20 employees, while 89 people were affected with other statuses.

BKSL Corporate Secretary Kwee Liana Kumala said, COVID-19 has resulted in the cessation of operational activities for 3 months. Meanwhile, the business lines that have been disrupted during the coronavirus are hotels and property sales in Sentul City, Bukit Jonggol Asri, GazeIle Indonesia, Sentul PP Properti, and Natura City Development in Serpong.

"In fact, the contribution from the sector whose operations were suspended to total company revenue reached 75 percent last year," said Kwee Liana.

To face a much bigger impact, said Kwee Liana, his party streamlined the organization, efficiency, and negotiated with creditors to ask for relief, both in terms of the amount of interest, procedures and grace periods for paying interest and principal loans.