Key Takeaways
- • Indonesia's Real Estate Investment Fund (DIRE), introduced in 2007 and governed by OJK Regulation No. 64/POJK.04/2017, has seen minimal development, with only 11 DIRE products listed according to KSEI data for 2025.
- • Structural barriers including high transfer fees, income taxes, property owners' reluctance to sell except at premium valuations, and weak secondary-market liquidity have prevented DIRE from matching the scale of REIT markets abroad.
- • Singapore has more than 40 REITs with total assets under management exceeding USD 100 billion, while the U.S. REIT market capitalization has surpassed USD 1 trillion, per the cited sources.
- • The article proposes a conceptual debt-tokenization ecosystem using blockchain as a compliance-supporting layer, with legal enforceability secured through notarial authorization and SPV custodianship.
- • The study identifies institutional, legal, and operational risks of such a system and calls for pilot testing within the OJK regulatory sandbox.
Summary
A research article published on Nature examines why property investment in Indonesia remains underdeveloped relative to global real estate investment trusts (REITs). The authors note that REITs have grown rapidly in developed economies, with Singapore hosting more than 40 REITs managing over USD 100 billion in total assets and the U.S. REIT market capitalization exceeding USD 1 trillion. These vehicles broaden retail participation and offer transparent financing for property owners.
In contrast, Indonesia's Dana Investasi Real Estat (DIRE), introduced in 2007 under OJK Regulation No. 64/POJK.04/2017, has experienced minimal development. According to Indonesian Central Securities Depository (KSEI) data, only 11 DIRE products are currently listed. The article attributes this to structural challenges, including high transfer fees and income taxes, limited asset availability because property owners are reluctant to sell except at premium valuations, and weak secondary-market liquidity.
The article also describes broader constraints in Indonesia's real estate financing. Direct property acquisition requires substantial capital and complex administrative processes. Bank loans carry high interest rates and collateral requirements, while corporate bonds involve high issuance costs and regulatory barriers that favor large, established firms with audited financial statements.
To address these gaps, the authors propose a conceptual framework for a debt-tokenization-based issuance ecosystem. Blockchain is positioned as a compliance-supporting infrastructure that enhances validation, documentation, and transparency while remaining consistent with Indonesia's civil-law land regime and Law No. 5/1960 (Basic Agrarian Law). Under the proposed model, legal enforceability would rest on notarial authorization, SPV custodianship, and multi-stakeholder governance. The authors stress that blockchain should complement rather than replace the roles of the National Land Agency (BPN) and the OJK, and that implementation should proceed through pilot testing within the OJK regulatory sandbox.
The study acknowledges that blockchain solutions depend on strong institutional frameworks and active monitoring bodies capable of enforcing compliance and interpreting blockchain-generated data. The research aims to identify the principal institutional, legal, and operational risks of such a system and propose mitigation strategies balancing the needs of asset owners, regulators, and digital-market participants.
In contrast, Indonesia's Dana Investasi Real Estat (DIRE), introduced in 2007 under OJK Regulation No. 64/POJK.04/2017, has experienced minimal development. According to Indonesian Central Securities Depository (KSEI) data, only 11 DIRE products are currently listed. The article attributes this to structural challenges, including high transfer fees and income taxes, limited asset availability because property owners are reluctant to sell except at premium valuations, and weak secondary-market liquidity.
The article also describes broader constraints in Indonesia's real estate financing. Direct property acquisition requires substantial capital and complex administrative processes. Bank loans carry high interest rates and collateral requirements, while corporate bonds involve high issuance costs and regulatory barriers that favor large, established firms with audited financial statements.
To address these gaps, the authors propose a conceptual framework for a debt-tokenization-based issuance ecosystem. Blockchain is positioned as a compliance-supporting infrastructure that enhances validation, documentation, and transparency while remaining consistent with Indonesia's civil-law land regime and Law No. 5/1960 (Basic Agrarian Law). Under the proposed model, legal enforceability would rest on notarial authorization, SPV custodianship, and multi-stakeholder governance. The authors stress that blockchain should complement rather than replace the roles of the National Land Agency (BPN) and the OJK, and that implementation should proceed through pilot testing within the OJK regulatory sandbox.
The study acknowledges that blockchain solutions depend on strong institutional frameworks and active monitoring bodies capable of enforcing compliance and interpreting blockchain-generated data. The research aims to identify the principal institutional, legal, and operational risks of such a system and propose mitigation strategies balancing the needs of asset owners, regulators, and digital-market participants.
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