December 05, 2024

The Heart of Modern Bekasi

Market Commentary

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Two days ago, I visited Pakuwon Mall Bekasi, which just had its grand opening with a reported construction cost of IDR 843 bn. The mall feels quite upscale, but it’s not fully polished yet. A lot of areas are still under construction, so the "wow" factor isn't fully there yet.

What’s interesting is that on opening day, 80% of the tenants were already up and running, even though 100% of the mall space has been booked. That’s a big contrast to other malls, which usually open with only about 20% of tenants ready.

You can imagine the buzz it’s creating, on its first day, November 22, the mall recorded a whopping 75,000 visitors!

Getting there is super easy too, thanks to the direct LRT connection and its proximity to JORR and Becakayu toll roads. It’s convenient for people coming from Jakarta or surrounding areas.

However, the hype is so massive that traffic around the mall is insane. Cars and motorbikes were jam-packed, like everyone wanted to check out this new place.

I honestly think this mall could become a new favorite hangout spot, especially once all the tenants are fully operational. Fingers crossed they will improve the traffic situation soon, though, because nobody likes arriving stressed out!

Speaking of Pakuwon Mall Bekasi, they’re not just stopping at the mall. They’ve got big plans for the area, including building four towers named Amor, Bella, Cella, and Dolce Vista. The concept seems to be a modern integrated community.

Out of these four, only Amor, Bella and Dolce Vista are on the market right now. Amor has been a massive hit, with over 90% of its units sold.

Bella is catching up though its lobby is still under construction, it’s managed to sell 30% of its units by 3Q24, generating cumulative sales of IDR 591 bn.

On top of the mall and towers, Pakuwon is also going big on hospitality. They’re planning to build two hotels, Four Points and Fairfield Bekasi, with a total of 252 rooms, set to be completed by 2025.

Once these hotels are fully operational, they’re estimated to generate around IDR 153.6 bn in annual revenue.

PWON looks like a solid long-term bet, especially with its strong fundamentals and promising growth ahead. While free cash flow may stay modest until 2031 as they complete big pipeline projects, it’s set to skyrocket to around IDR 4 tn annually afterward, driven by steady recurring revenue, low maintenance costs, and efficient operations.

Even now, their existing business generates a solid IDR 2 tn in free cash flow annually. On top of that, the share price has pulled back from its 52 week high of IDR 530 to just IDR 430, making it look like a bargain with 9x of PE

Given these strengths, our analyst has set a target price of IDR 570, presenting a compelling upside for investors looking to capitalize on its growth story.

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