Property Marketing and Sales Review

COLIPPO PT LIPPO KARAWACI TOK Macro Environment & Outlook Trending Positive Indonesia's macro environment remains accommodative with low interest rates, a stable currency, increased mobility, and strong commodity prices. Bank Indonesia has been less aggressive than EM peers in cutting interest rates and this has created an attractive operating environment. This was further supported by regulatory relaxation with the removal of VAT taxes and speeding up the timing of mortgage disbursement by banks to property companies. The 0% VAT regulation which effectively translates to 0-10% discount should somewhat affect demand for existing inventory (~Rp1.5tn are estimated to be impacted by this regulation). In addition, new regulations on mortgage disbursement has resulted in increased cash flows from banks releasing mortgage funds at origination. Indonesia's property industry is expanding as accommodative policy, focus on middle income customers, rising average selling prices are supporting industry expansion. Accommodative policy as mentioned above is lowering the cost to buy through VAT reductions, increasing the liquidity of property company's by tightening the cash collection cycle and mortgage rates are at historical low levels helping to lower the debt servicing ratio for buyers. The industry continues to focus on middle income consumers by offering products that are affordable to the burgeoning middle class in Indonesia. We would note that in the last 9 months it is the first period of rising home prices in nearly a decade. Macro Outlook - Accomodative, Not too Aggressive Property Market Outlook 8 7 6 5 4 3 2 1 Red Dot Position End of Jan 2020 Blue Line: Position End of Sep 2021 Chile Poland Thailand 60 12 50 53 11.36 11.08 40 11 10.80 30 10.14 10.17 10 9.69 9:39 43 934 20 912 8.85 963 9 8 7 6 (10) (20) 8 8 8 Source: BIS Among EM peers Indonesia was relatively conservative in lowering interest rates since Jan 2020, supporting currency appreciation over the past 16 months. Implying global tightening may have limited fund flow pressure Bl average mortgage rate -YOY ASP growth (%, RHS) Source: Peer data and Historically low mortgage rates are making home ownership accessible to middle class. After pricing troughed, we are seeing Average Selling Prices (ASP) rise for the first time in ~10 yrs. 76

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