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Abu Dhabi, Dutch, Indonesian Funds Invest in Major Southeast Asia Highway Project

The investments are the first under a 2021 agreement establishing Indonesia’s first toll road investment platform.

By Michael Katz



The Abu Dhabi Investment Authority, the Indonesia Investment Authority and Dutch pension fund provider APG Asset Management are investing in Indonesia’s Trans Java Toll Road.  

“As one of the world’s fastest growing economies, Indonesia is developing its infrastructure to support increased industrialization and more efficient supply chains,” Khadem Alremeithi, executive director of the ADIA’s infrastructure department, said in a release. “The Trans Java Toll Road is a key part of these plans. We are pleased to support its development through this platform with INA and APG, which will continue to seek additional opportunities to invest in Indonesia toll roads.”

The investment is the first to come out of a 2021 memorandum of understanding signed by the three institutional investors, along with Canadian pension fund Caisse de dépôt et placement du Québec, that established Indonesia’s first toll road investment platform. The Indonesia Investment Authority, also known as INA, is Indonesia’s sovereign wealth fund, while ADIA is the investment institution that invests funds on behalf of the Government of Abu Dhabi, the capital of the United Arab Emirates.

Under the memorandum, the investors agreed to explore opportunities for joint investments. At the time, they said they expected the investment platform to have an investment capacity of up to approximately $3.75 billion; however, their most recent announcement specified a target of up to $2.75 billion in funding.

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The investment made by APG, the ADIA and the INA will go toward construction of the Kanci-to-Pejagan and Pejagan-to-Pemalang sections of the Trans Java Toll Road, which the INA acquired in September 2022. According to the INA, the two toll road sections are “instrumental in boosting regional connectivity in Indonesia,” adding that the roads have seen traffic volume jump approximately 68% over a five-year period, with daily vehicle numbers rising to 22,206 in 2021 from 13,202 in 2016.

“Infrastructure remains a foundational need for supporting the region’s economic growth and delivers stable, risk-adjusted returns for the benefit of APG’s pension fund clients and their participants,” Hans-Martin Aerts, APG’s head of infrastructure and natural resources, said in a release.

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Home > News > Research > Overstated Shelter Costs Pump Up Reported Inflation, Says Sage
Research

Overstated Shelter Costs Pump Up Reported Inflation, Says Sage

The government blamed the recent upsurge on rising housing costs, but that’s hooey, Barry Ritholtz charges.
By Larry Light


Housing costs make up about one-quarter of the Consumer Price Index, and the U.S. Bureau of Labor Statistics, which issues the inflation gauge, blamed shelter for the December blip sending the CPI upward.

That’s nonsense, according to Barry Ritholtz, noted economic commentator, in a blog post. He joined a long line of critics of how the government agency calculates shelter inflation. “In the real world, shelter measures were flat or negative,” wrote the co-founder, chairman and CIO of Ritholtz Wealth Management LLC. 

Not in the BLS world. The CPI rose 0.3% in December and 3.4% from one year prior, exceeding estimates of 0.2% and 3.2%, respectively. “The index for shelter continued to rise in December, contributing over half of the monthly all-items increase,” the BLS report read. By its measure, shelter was up 6.2% year over year in December, and 0.5% from the previous month.

The BLS tracks shelter via a metric called owners’ equivalent rent, which is based on a survey asking homeowners—both of single-family houses and apartments—how much they would pay to rent out their abodes. The longstanding criticism of this approach is that these respondents are overestimating what they could lease the places for.

Ritholtz used the Apartment List National Rent Report as his proxy for rental costs. This report “showed that the rental market ended 2023 with a fifth straight month of negative rent growth nationwide, [and] median rent fell by 0.8% in December—even as the lagged BLS measure showed a rise,” he wrote. Here comparisons get tricky, yet it’s worth examining the components of this question.

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Ritholtz quoted the Apartment List: “Apartments across the country are slightly cheaper today than they were one year ago. This stands in sharp contrast to the prevailing conditions of 2021 and 2022.” Actually, the same could be said for home buying, at least in some places: Prices for single-family homes had dropped in 25 of the 100 largest U.S. cities over the 12 months through November, a study by research firm Point2 found. And condominiums are more closely linked to rental apartments.

Indeed, houses are not the same as rental apartments, which many think less expensive due to lower upkeep costs and no financing outlays. But in two-thirds of housing markets, buying is more affordable than renting, per ATTOM Data Solutions. Still, one can argue that there is a rough equivalency, in that 36% of all houses are rentals.

If the BLS adopted Ritholtz’s take on shelter calculation—the agency did not respond to a request for comment—then maybe that lower inflation target that the Federal Reserve seeks (2%) would be reached in short order.

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