Less than a year after Donald Trump Jr. was in Jakarta to mark the Trump Organization’s entering into Southeast Asia’s biggest country, his ultra-luxury project in Bali is facing a new reality: Indonesians are holding back spending as the covid-19 decimates the nation’s $1 trillion economy.
The U.S. developer’s local partner and conglomerate, PT MNC Investama, is now considering remodeling the design of the Trump-branded six-star hotel and residential venture in a bid to make the property more affordable to buyers seeking to save, tycoon and Chairman Hary Tanoesoedibjo said in an interview.
“I see people have become more modest,” Tanoesoedibjo, 54, said on Monday. “It shouldn’t be too lavish. Maybe it will be just a five-star or a tad below five-star because lifestyle in the future will change drastically.”
The pandemic has hit Indonesia harder than the 1997 Asian financial crisis, battering small and big businesses alike, President Joko Widodo said last week.
With the economy on course to contract as much as 3.8% this quarter, even rich Indonesians aren’t in the mood to splurge. Average monthly sales of luxury cars from Mercedes Benz to Lexus and BMW have plunged 50% in April and May from the previous quarter.
Luxury properties aren’t just falling out of favor in Indonesia. Home prices in London’s wealthiest districts fell the most since early 2009 in April as the spread of the virus derailed a nascent recovery in the city’s priciest postcodes.
Manhattan deals came to a near standstill in May, as contracts to buy co-ops fell 80% from a year earlier and condo sales plunged 83%.
PT MNC Land, a unit of Tanoesoedibjo’s group, is investing about $400 million to develop two sites for the Trump-branded projects. They include the one in Bali, called the Trump Residences. Set over 107 hectares of land across the water from the Tanah Lot Temple on the popular resort island, the property includes 144 ultra-luxury homes, an 18-hole signature golf club, a beach club and also a luxury hotel.