Success or failure will depend on your local partner – Todd Lauchlan
Table of contents Getting started with property consulting in IndonesiaWorking with big property projectsHeading property subcommittee of EuroChamTodd Lauchlan is the country manager of Jones Lang LaSalle, Indonesia’s largest property consulting firm. Prior to his current role as the country head of Jones Lang LaSalle Indonesia, the largest property consulting firm in the country, Todd […]
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Todd Lauchlan is the country manager of Jones Lang LaSalle, Indonesia’s largest property consulting firm.
Prior to his current role as the country head of Jones Lang LaSalle Indonesia, the largest property consulting firm in the country, Todd Lauchlan has over 17 years’ experience in the property business. He was involved in various projects in a number of countries, including New Zealand, London, Mumbai, Beijing, Auckland, Dubai and Abu Dhabi.
We recently had an interview with him on how Jones Lang LaSalle started in Indonesia and how the property market has been evolving over the years.
When did Jones Lang LaSalle enter Indonesia?
We’ve been here since 1980. We originally came in with local partner on a joint venture basis. That was in connection with our Australian business. We’ve been here ever since, basically 33 years already.
Indonesia was a big opportunity for us back then and is a bigger opportunity now. The size of the country, really strong economic profile and the property markets has been developing rapidly and along with the other Asian economies urbanizing – a lot of people moving from the countryside into the city.
When people move to the city they want housing, office space, factories, hotels, retail malls. That’s our prominent business. We manage, lease, sell property.
What were the challenges when the company got started here?
It was a completely different world in 1980. A lot of the regulations were quite restrictive, that’s why we had to come here with a local partner but over time it has become freer and easier for us to operate.
Most of the hurdles were overcome already in the early 1980s and we are a much more mature business nowadays. We hire mostly Indonesian staff and many of them have been staying with the company for a long time and understand how business operates here.
How do you find good local people?
A lot of our people have been with us for a long time and we are all the time looking to bring more people into our business. In different divisions we have teams who develop new employees and we also have regional HR center that supports us with online learning.
We have a program in Singapore called the Stepup program where every year one or two persons get to participate and be part of our regional business.
Many of our divisions are regionally managed and they have their own platforms for developing people.
For us finding good people is a challenge but we are always bringing in new people as the business grows.
The challenge is keeping some of our more experienced people because there are not many of them in Indonesia and the demand for them has explosively increased.
When did you personally come to Indonesia?
I first came to Bali in 1998 but only for holiday. For business the first time was August 2010, my family moved here one month later.
Before coming here I did a lot of online research. Me and my wife tried to connect with several people who we knew were here just to understand a little bit about Jakarta.
The time from when I was offered the job until I accepted it was only 6 days so everything happened pretty fast.
What are some of the most interesting projects you are currently working on?
Wow, we’ve got probably over a hundred different projects we are currently working on – from management clients to new developments.
I guess the most exciting project is the Ciputra World I, there’s a Lotte opening there and we were the ones who originally negotiated the deal with them.
So we were involved in the retail side and we are also bringing several banks to the office buildings there. For example for DB we did the facility management so many of our divisions have been involved with this project.
Besides Jakarta we also have offices in Bali and Surabaya and we do assignments for the clients in about 12-15 locations. It’s a good mix of projects, a lot of them for which we were just recently appointed to.
How has the market and competition changed over the last years?
More competitors are entering the market. When we first arrived in the 1980 we were pretty much the only ones in our sphere. Now there are about 5-6 major players.
We are not too concerned about the competition, there will always be competition. We are more focused on ensuring that we can deliver really high quality service to our clients and then they will want to keep working with us.
The competition will continue to increase as the economy is booming and real estate will be beneficiary of that.
What would Jones Lang LaSalle do differently if you could turn back time?
In 2001 we separated with our original joint venture partner but bought them back in 2011. So if we could do it again, we probably would not have separated the first place.
We are very happy that we’ve stayed here for the whole time. Many of our competitors came here and then left –we stayed during the good times and bad times.
What business networks are you part of here in Jakarta?
I’m the head of EuroCham Property subcommittee. I’m also involved in the BritCham and Australian Chamber although not as extensively.
Number of our senior people are part of the Real Estate Indonesia and Kadin.
Before coming to Jakarta you were working in Abu Dhabi. How would you compare those experiences?
Here is much better (laughs – W.).
Abu Dhabi is a very rich small city in desert where it gets over 40 degrees during summer. Here it’s much more interesting even though the traffic is worse.
What are some of the sectors where you see opportunities for the foreign investors?
Banking, life insurance, logistics, retail, industrial, any of the consumer goods. Those are the big ones.
Indonesia has a lot of people entering middle class and they buy motorbikes, cars, get bank accounts, insurance, take loans, buy new products. That’s where the growth is.
Probably the commodities will start growing after China starts to grow faster again.
Is Indonesia welcoming to foreign investors?
If we leave aside the big restrictions in mining and banking, which are common to an emerging market, I think Indonesia is pretty welcoming.
Last year the foreign investments were up 27% and BKPM is doing a good job marketing Indonesia as investment destination.
When you develop a country this size, you will need both local and foreign investors.
What are some of the things foreigners get wrong about Indonesia?
The ones who haven’t been here that much still often think of Jakarta and Indonesia as it used to be in the late 1990s. For example that Jakarta is a little bit unsafe or it’s a corrupt country.
I think the reality is that it is much safer and doing business here is much safer than people usually imagine.
How would you advise foreign investors who are considering coming to Indonesia?
The main thing is to do as much research as you can, try to speak to people. Connect with people who are actually at the market.
Make sure that when you enter into a partnership with a local company you will do your homework first. The success or failure of entering Indonesia will depend on whether your local partner is someone you can work and grow with.
I encourage people to come; there are a lot of opportunities here.
What to watch out for?
Do your homework and understand the regulations and what your restrictions here are. There are consultancies here that can help you do that.
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