Fitch: Weak Demand to Pressure Indonesia Homebuilders in 2016

Fitch Ratings expects weak demand to continue to weigh on the Indonesian housing sector in 2016, which is likely to undermine homebuilders' presales and put more stress on leverage.

The Rating Outlook for the six Fitch-rated Indonesian homebuilders is Stable, supported by their generally strong franchise and brand creation, track record in project execution, wide profit margins - and in some cases, strong recurring income streams from investment properties, which support debt-servicing during downturns. Of the six companies, PT Alam Sutera Realty Tbk's (B+/Stable) credit profile is the most stressed as a result of the challenging conditions in 2015.

The overall negative outlook for the sector could turn stable if there is a stronger-than-expected recovery in domestic demand and confidence. However we do not expect this at least until 2H16.

The full report "2016 Outlook: Indonesian Homebuilders" is available at www.fitchratings.com or by clicking the link in this media release.