IS INDONESIA READY FOR REIT?

Abstract

This paper examines the development of REIT in Indonesia. The research findings show that there is indeed potential strong local demand for REIT in Indonesia. The main hurdle for REIT development in Indonesia is the non-existence of tax transparency in the current REIT draft. Tax transparency is a necessary first step by the Indonesian government to attract REIT listing in Indonesia. The long-serving process is believed to be caused by lack of tight and firm coordination amongst relevant government authorities in dissecting the issues (e.g. tax transparency) of the current REIT draft. Lack of local REIT knowledge is also one of the limiting factors which implies there needs some time for the market to gain acceptance toward REIT.