A DJOG IN JAKARTA

As we have an office in Indonesia, I try to get there at least once every two months; but for various reasons it has been four whole months since I was last there.  In addition to the regular review of our Indonesian only portfolios where we continue to beat benchmark, there was an added urgent reason why I needed to be in Jakarta.  Our office just burnt down. 

The building in which we have been located for some seven years is value investor’s heaven; a grade C property in a grade A location with rent to match.  One of the first somewhat western style office blocks truthfully it has started to look a bit out of place recently.  Its shabby appearance belies its premier position, only a short way from the Plaza Indonesia and opposite a new shopping centre that contains many of the usual branded suspects as well as up market restaurants, and some of the better hotels in the city.  The infrastructure and common areas were overdue rather more than just a lick of paint.  In particular the car park was a challenge as it had been constructed at a time when cars were much smaller and well before anyone came up with the idea of a SUV.  Thus getting in and out required real skill, a skill not everyone possesses as demonstrated by the high percentage of cars in that garage with bumps and dents.  The common areas also were showing their age. 

Still no one was expecting the building to burn down, except perhaps the Inspectors who apparently had noted more than a few deficiencies several years ago.  The first thing to note is the good news : no one got hurt, let alone killed.  Amazing really.  The second thing is that the relevant department in Jakarta is not equipped to put out fires in tall buildings : something to bear in mind if you plan on renting space there, whether office or residential.  So the top of the building from Floor 15 up was obliterated as the equipment could not reach that high.  We were on Floor 9, the highest floor that still had a ceiling intact once the blaze finally burnt itself out some twelve hours later.  Not to say our office was intact; plenty of water damage and unsurprisingly most fixtures and fittings were a write off.

One benefit was that we got to test our disaster recovery plan; and it worked!  Within three hours the team was operational.  Thank you the Cloud.  Our main server meanwhile has gone for a scrub.  So not just a fire drill; but a real fire and we passed.  That box has been ticked and how.  The other plus was that we have been forced to find another office.  An upgrade was arguably overdue.  Now that has been taken care of and we will be moving in shortly just two buildings up the road, but with rather more mod cons.

This leads me to perhaps the most interesting aspect of all : what caused this fire?  The most likely and a natural explanation for an old building in need of renovation is faulty wiring or some such.  Of course a building in need of a makeover is a tempting target, especially when once upgraded the value, given its location, could quadruple or more.  Were one so inclined it would be a great deal easier to achieve this goal if the building burnt down, as it would short circuit the usual bureaucratic nightmare, and possible bribes required to obtain all relevant licences; and of course after such an event some of the demolition cost, if not most of it, should be paid by the insurer.  No doubt the affected insurance company will conduct all possible checks and tests before dismissing this scenario.

Conspiracy theorists could go one step further.  The building is owned by an entity related to the Golkar Party, the original grand old nationalist coalition whose main platform is power, and whose philosophy is practical rather than based around any ideology.  Indeed it has been in government since democracy graced Indonesia in one capacity or another; except now it is not.  That has caused a rift within Golkar.  Rather like the Papacy in the thirteenth century, the party is currently split with two separate factions each with its own leader and both claiming to be in charge.  Still it is not likely that this clash is in any way related to the fire.   

Lastly acute observers might have noticed the name of one of the tenants whose office no longer exists.  Churchill Mining is a minnow listed on the AIM market in the UK that thought it owned immense coal reserves in Kalimantan, several billion tonnes all told; until it appeared that there were multiple claimants to the same sites including some rather well connected political figures.  The transfers of title for which luckless Churchill had paid in hard cash were duly declared invalid by a local judge.  Several court battles later and Churchill is now attempting to secure an arbitration against the Government asking for a sum that I believe exceeds £2 billion for the damage.  No doubt all their records are all backed up, hopefully on a fire proof cloud, and hopefully also nothing vital and irreplaceable relative to this suit went up in flames.