Michael Riady

Leading Rp 11 Trillion Project

VIVAnews – For someone who is only 28 years old, Michael Riady has quite heavy responsibilities. He currently handles a prestigious real estate project worth Rp 11 trillion (approx. US$915.7 million).

Since 3rd April 2008, Michael Riady has been Chief Managing Officer of St. Moritz Penthouses and Residence, a super-block project comprising 11 integrated facilities and lifestyles in the business area of West Jakarta.

Being entrusted to lead a large-scale project did not happen by mere chance. Although he is still very young, Michael Riady is already known for having great talents in managing a real estate business. However, being the grandson of Mochtar Riady, the founder of Lippo, did help open the way for him to acquire the giant project.

Lippo Group is one of the largest property empires in Indonesia. It has constructed various satellite cities and community developments, including Lippo Karawaci, west of Jakarta.
   
Why St. Moritz?  Because Lippo is targeting a different market segment. Lippo planned the project, which owes its name to an exclusive city in Switzerland, to target the middle-upper class segment.

In addition, St. Moritz will be developed to become a new business district because it is located in the business area of West Jakarta, easily accessible from all directions.

Michael obtained a Master's degree in Finance from California State University, Fullerton, California, United States. Before becoming a member of the management board of PT Lippo Karawaci, Michael worked at three leading companies in California: Fidelity Investments (1999), an investment company, AIG SunAmerica (2002), a retirement service company, and Manatt, Phelps & Phillips Law Firm, a real estate law consultant (2004).

Elly Setyo Rini of VIVAnews interviewed Michael Riady about his interest in real estate business up until he manages St. Moritz Penthouses and Residences.

How did you get involved in the real estate business?

I gained an interest in the real estate business while I was still in college. I read an article in Forbes magazine stating that the most successful businessmen in America are those who engaged in the real estate business.  Then, I observed the real estate business myself, especially the apartment sector, which looked very promising there. After returning from America, I was challenged to develop a real estate project in Indonesia under the management of Lippo Karawaci.

Is it true that your background is actually in Finance?

I think that real estate is a typical business sector that anyone should know about. This includes myself who can exercise my expertise in this field even though my background is in finance. It's because real estate is full of finance calculation.   

Is St. Moritz your first project?

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Actually no. When I first joined the Lippo Group in 2004, I was entrusted to lead the Metropolis Town Square project in Tangerang. I was also involved in the transformation of Cibubur Junction and the construction of Kemang Village.

What is your vision of the future of the real estate?

Since I am still new to it, barely 4 years, I haven't thought about a long-term planning on Indonesia's real estate business. Currently I am still concentrating on the St. Moritz project, and haven't thought about anything else. Until now, I am continuously learning from anyone, about anything. This includes observing other people's projects and learning from it.

Who is your real estate idol or inspiration?

I have no particular idol. I learn literally from anyone, including family, peers, books, or I would go to the location myself. I learn a lot from my grandfather (Mochtar Riady, ed.) and my uncle (James Riady, ed.).

How about family support?

I am extremely grateful that I was raised in a family who put democracy and spirituality first, and who focuses on the sector in which we have been involved. In my family, I am free to choose whatever business interests me. Aside from family support, my decision to engage in real estate business was because the sector is very promising.    

How about the funding for St. Moritz project? Where does the money come from?

Funding for building a mall or hospital is different from funding for building an apartment building. For the latter, the construction cost is fully funded by the customer. It is not necessary to get a loan from the bank. We pay the contractor and the material supplier with the money collected from sales. Because real estate business is a business of trust, we use the money from the customers to build the building. On the other hand, because malls are based on lease, we cannot sell them to make money. In fact, we are the ones who have to spend money.

In your opinion, how is the challenge like in the real estate business?

All businesses have their own challenges, not just real estate. The biggest challenge in the St. Moritz project is to fulfill the customers’ expectation that the project will be completed on schedule, despite the financial crisis. The challenge is commitment to the customers, and also to the country. Because, as I often say, the real estate business is the industry that stimulates the country’s economy. Constructing a real estate requires large manpower and it stimulates other industries, such as steel, concrete, furniture, and pipes. Aside from that, with the construction of supporting units such as malls, schools, or hospitals can create new job opportunities.

What do you do when you have free time?

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Sports. Before becoming involved in the St. Moritz project, I often played golf because I had a lot of spare time. However, now I just do fitness or play basketball.


Translated by: Edwin Solahuddin, Ramona Sofianne Dewi.

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