W Hotels Worldwide and Indonesian company Dua Cahaya Anugrah (DCA) launched The Residences at W Bali-Seminyak yesterday at St Regis Hotel Singapore.

The 79-unit villa-style development is next to the 158-room W Bali Hotel.

The 79 units consist of 65 one-bedroom units of 2,422 to 3,068 sq ft, 10 two-bedroom units of 3,789 sq ft and four three-bedroom villas of 6,708 to 7,669 sq ft.

Prices range between US$605 and US$800 per sq ft – which equates to about US$1.5 million for the most affordable villa.

According to a DCA spokesperson, this is about a 5 to 10 per cent premium to other projects around Seminyak.

The development is freehold for Indonesian citizens and leasehold for foreigners, based on the current ownership laws in Indonesia. DCA lawyers are available to advise foreigners on the types of ownership available to foreigners.

The project, which was launched in Indonesia about three months ago, is almost 60 per cent sold. Most of the buyers are the Indonesians. Reportedly, three one-bedroom villas have already been sold to Singaporeans.

A catch is the concept of ownership – the villas will form part of W Hotel’s rental pool and will be looked after by the hotel’s management team for 48 weeks of the year. The villa owners will be allocated exclusive access to their property for four weeks a year.

At a news conference yesterday, DCA said owners can expect an internal rate of return in excess of 5 per cent from their property’s rental income.

The development was designed by SCDA Architects, which has done numerous high-end developments in Singapore.

There will be a public viewing at St Regis Hotel over the weekend, from 10am to 7pm.

W Hotel Worldwide is a brand in the Starwood stable, which includes St Regis, Sheraton, Le Meridien and Westin.

The brand was started in 1998 with the opening of W New York. Since then it has expanded rapidly. Currently, Starwood is the only hotel chain with a dedicated ‘residential’ team that helps developers with projects.

In Singapore, City Developments has launched W Residences on Sentosa. In May, two units were sold at a median price of $2,800 psf.

Source: Business Times, 17 Jul 2010

MORE than 10 units at Bintan’s first seaside residential estate have been sold, mainly to expats living in Singapore, the company behind the project said yesterday.

The Pantai Indah estate is a gated community of 162 resort-style luxury villas on 13 hectares at Bintan Resort’s Lagoi Bay. The project is being built by Singapore’s BU Holdings and is designed by DP Architects.

BU Holdings soft-laun ched 28 villas in April and has sold about 40 per cent of them. Buyers of the villas, which go for between $700,000 and $1.8 million, are mostly expatriates based in Singapore looking for weekend homes, the company said. Most of the units sold so far are beachfront properties, which means they are at the pricer end of the scale.

Pantai Indah’s selling point is that it is a 45-minute ferry ride from Tanah Merah Ferry Terminal in Singapore and offers buyers a change from city life, BU Holdings said.

The villas, on the north coast of Bintan Island, will have walking access to the new Lagoi Bay Village as well as upcoming resorts, shops and restaurants, it said.

Established hotels and resorts – such as the Banyan Tree, Angsana Hotel and Spa, Nirwana Gardens Hotel, Club Med and Bintan Lagoon Resorts – are a 10-minute drive away. The combined properties have 36 F&B establishments and four golf courses, BU Holdings said.

The villas have plot areas of 400, 500 and 800 square metres. Built-up areas range from 289 to 775 sq m.

Source: Business Times, 25 May 2010

Deregulation will soon allow direct purchase of homes, commercial property

Foreigners will soon be allowed to buy homes and commercial real estate directly in Indonesia, as plans are underway to deregulate the property sector by end-June this year, the country’s top investment chief said yesterday.

Speaking at an investment conference in Singapore, Gita Wirjawan, chairman of Indonesia’s Investment Coordinating Board, said that loosening restrictions on foreign home ownership would open up new sources of foreign capital inflows for South-east Asia’s largest economy.

At present, foreigners can only buy property in Indonesia via a nominee or through a local Indonesian company, which has deterred some buyers because it puts them at increased risk.

‘The move will unleash value,’ Mr Wirjawan told some 300 business leaders at the Hilton Hotel.

He was leading a trade and investment mission to brief the local business community on Indonesia’s new investment climate and business opportunities.

‘The government is committed to continuously comb through policies to make it easier to invest in Indonesia. I’m optimistic that once we can be seen to be taking steps in the right direction, we can reach a 15 per cent increase in foreign investment (over the US$14 billion in 2009).’

During a question- and-answer session, Mr Wirjawan said that condominiums in the capital Jakarta were undervalued against Singapore and Ho Chi Minh City.

He added that within the next 12 months or so, Indonesia – which has 235 million people – will reform land laws and inflexible labour market laws, which he said are two of the biggest stumbling blocks to raising foreign direct investment.

‘We have a permanent resident deficit,’ he said. ‘To many people, they only know Indonesia for its floods, earthquakes, tsunamis and corruption. Yes that’s a reality, but there are also many positives that we can offer.’

Singapore’s Trade and Industry Minister Lim Hng Kiang said that the Indonesian economy was one of the few in Asia to register healthy growth last year despite the global downturn. The economy expanded 4.5 per cent – the third-highest among G-20 countries after China and India. Indonesia’s central bank expects economic growth of 5.5-6 per cent this year.

‘The positive outlook of the Indonesian economy is a reflection of its resilience and the commitment of the government to continuously review and implement pro-business measures,’ Mr Lim said.

‘Under the leadership of President Susilo Bambang Yudhoyono, Indonesia has taken steps to reform its business and investment climate.’

He cited the One-Stop Shop System and the National Single Window for Investment, which have made it easier and faster for investors to obtain business licences.

Mr Lim highlighted two Singapore companies that have recognised the potential of the larger Indonesian market and invested in regions other than Jakarta and Batam-Bintan.

Keppel Land has developed a retail mall in Surabaya, while Killiney Kopitiam runs several outlets in Medan.

In 2009, Indonesia was Singapore’s fifth-largest trading partner, with total bilateral trade amounting to $58.5 billion. Singapore was also the top source of realised investments in Indonesia, accounting for almost US$4.4 billion last year.

Source: Business Times, 1 Apr 2010

Foreigners may be allowed to own apartments and even commercial property in Indonesia under a revised rule expected by the third quarter of this year, Indonesia’s investment chief said yesterday.

The move is likely to draw investors into South-east Asia’s biggest economy and increase the flow of foreign capital into the country.

‘The government is committed to continuously review policies to make it easier to invest in Indonesia,’ said Mr Gita Wirjawan, chairman of the National Investment Coordinating Board, at a forum in Singapore yesterday.

‘I am optimistic that once we can be seen to be taking steps in the right direction, we’ll be able to reach a 15 per cent increase in foreign investment over last year’s US$14 billion (S$19.6 billion).’

His remarks were welcomed by property market watchers and expatriates in Jakarta. It was the clearest indication yet that the government was relaxing the rules on foreign ownership of property in the country, they said.

The move also comes at a time when improving fiscal stability could earn Indonesia an investment grade sovereign rating within a few years, according to Bloomberg News.

At present, foreigners can only buy property in Indonesia through a nominee or local Indonesian firm, putting the buyer at risk.

Foreign companies are not allowed to own property. They only have the right to use land for a period of 25 years, which is renewable, and the right to lease buildings.

‘The thinking is, anything above a certain floor, you can buy… anything closer to the ground has political sensitivity,’ Mr Wirjawan said in an interview with Reuters.

Analyst Willson Kalip, the country head of Knight Frank Indonesia, told The Straits Times that the move to invite foreign participation in the property market will be seen as a positive gesture. The property market has always been geared to meet domestic demand, he said.

‘It will be a boost as already foreign investors from China, Singapore and Malaysia have shown interest in buying office space for their longer-term investments,’ he added.

Long-term resident Michael Tan, a Malaysian, told The Straits Times that the new rules on property ownership would be an incentive for expatriates like him who have always looked forward to owning their own homes in Indonesia.

Foreign companies like his can own property, but the ownership is considered as hak pakai – the right of use – or hak sewa bangunan – the right of a building lease. ‘What we need is hak milik, or right to own,’ said Mr Tan.

Asian residential property prices have been booming on strong investor interest and low interest rates, leading to fears of bubbles in some countries.

Mr Wirjawan said Jakarta condominium prices were undervalued compared to Singapore and Vietnam’s Ho Chi Minh City.

‘Investors are optimistic about Indonesia relative to, say, Thailand and Malaysia,’ said Mr Colin Tan, director of research and consultancy at Chesterton Suntec, a real estate advisory firm, according to Reuters.

‘If you open a new channel for investments, some money will definitely come in… It can only be good for Indonesia’s property market.’

Source: Straits Times, 1 Apr 2010

HE ARRIVED in a whirlwind of publicity earlier this year and bought a $15.46 million penthouse at The Sail @ Marina Bay condominium.

Now, Indian billionaire Bhupendra Kumar Modi is setting his sights beyond Singapore.

He wants to spend US$100 million (S$140 million) to buy beach resorts in popular spots such as Bintan and Batam, and invest in at least four smaller islands which remain largely underdeveloped.

The privately owned islands with a combined land area of more than 300ha – or two-thirds the size of Sentosa – are north of Batam.

Dr Modi is the flamboyant founder-chairman of conglomerate Spice Group, which has interests ranging from telecommunications to entertainment. Speaking to The Straits Times at his 5,834 sq ft home, the Singapore permanent resident said he expects more than a 100 per cent return on his investments.

‘I never realised until I came to this country that these islands were so big and so close,’ said Dr Modi, 60, who moved here in May from the United States.

He also relocated the global headquarters of Mumbai-based Spice Corp to Singapore, and set aside US$200 million to invest through his office here. Already, well over US$100 million has been sunk into investments, from property and office space to acquiring a 20 per cent stake in online telephony firm MediaRing in August.

Now he is looking further afield. He plans to turn popular tourist spots such as the Pura Jaya resort in Batam into attractive havens for the rich and famous from Bollywood.

The carrot? Casinos and private villas with pools and spas. He also plans to build more and better houses, schools and hospitals on these islands.

Pura Jaya’s owner, Indonesian businessman Zulkarnain Khadir, has confirmed that he is looking to sell the resort and is in discussions with Dr Modi as well as some other parties.

‘For the last 12 years, these islands have lacked investment. There has been little change,’ Dr Modi noted. He is understood to be in discussions with a number of banks as potential partners.

He feels developing the nearby islands offers an avenue to overcoming the challenge of land scarcity in Singapore: ‘Looking at future development, we cannot continue doing what we have (here) for the last 50 years because it has reached a point of saturation. These islands could be examples of the future, that would also be commercially viable.’

Mr Michael Yong, a director of Kosmo Suria – the company that owns the group of islands just off Batam – said it was in early-stage discussions with Dr Modi: ‘We have a meeting planned… to take these plans further. Our estimated target to start development is early next year.’

Dr Modi has also made his presence felt in other areas. He has pledged one of the largest single donations of $1.3 million to the Lee Kuan Yew School of Public Policy, which will fund scholarships and executive training programmes.

This contribution was recognised at the school’s annual dinner in September, which was graced by Minister Mentor Lee Kuan Yew.

‘I’m not here just to do business. I could do business anywhere. I’m here because I see a long-term future,’ Dr Modi said.

Source: Straits Times, 9 Nov 2009

IMMUNE may not be quite the right word to describe the response of Indonesia’s property market to the global downturn and its more recent tentative recovery.

But overall, the sector does seem to have taken the events of the wider world in its stride. There was no crash in property prices when the crisis hit late last year, and unlike places such as Singapore, Hong Kong and South Korea, there has been little talk of a property bubble as the global economy recovers.

Supply and demand mechanisms are very local. Stability in the Indonesian property market has also been enhanced by the fact that the wider economy has weathered the crisis well, thanks to a stable financial system and low dependence on exports.

Stability, however, is not the same as stagnation. Indeed, there has been huge growth in the sector in recent years, with strong domestic demand and a growing middle class encouraging the construction of numerous shopping centres, condominiums and office buildings in the capital Jakarta.

Property consultants also point to the untapped demand in secondary cities such as Bandung, Semarang and Makassar as evidence of the likelihood that the trend will continue.

Tracking trends in Indonesia’s property market offers a revealing window into the changing attitudes of foreign investors. Take the pattern of demand for residential property.

Ten years ago, notes Ms Vivin Harsanto of property consultants Jones Lang LaSalle in Jakarta, most expatriates arriving in the capital were Westerners looking for luxury apartments. Today, however, potential tenants tend to be middle management employees seeking more modestly priced residences. There has also been a marked increase in the number of Koreans, Indians and Filipinos looking for accommodation.

The implication is that large numbers of foreign investors have moved beyond the start-up phase and are now beginning to bring in the specialists and technical advisers they need to implement their business plans. Indonesia also appears to have become an attractive location for a wider range of foreign investors.

The continuing interest of local corporations in property development also attests to an optimistic mood among local investors. Large property developers such as Lippo Karawaci, Agung Podomore and Duta Pertiwi do not have the field to themselves. Rather they must share the pie with local conglomerates whose expertise often lies in quite different industries.

The Dua Mutiara Group, originally specialising in chemicals and agriculture, for example, is part of the consortium that owns Jakarta’s JW Marriott and Ritz Carlton hotels in the upmarket Kuningan district. Cigarette maker Jarum is also heavily involved in the refurbishment of the Hotel Indonesia in Jalan M.H. Thamrin and the construction of associated apartment, commercial and office buildings.

Foreigners who want a piece of the action are limited by laws preventing non-citizens from acquiring land. Manufacturers are usually able to get around this by taking advantage of government regulations that allow them to build factories on land with long-term leases. Foreign residents in Bali have also resorted to using local proxies to acquire ownership of residential properties. But the contracts involved are of dubious legality. The practice is also rare in Jakarta, where the vast majority of foreigners have no intention of taking up long-term residence.

One of the key characteristics of Jakarta’s rental market over the last 10 years has been the lack of volatility. Before the 1998 Asian financial crisis, rentals on three-bedroom luxury apartments were going for around US$4,000 to US$5,000 a month. Today, such prices are still the norm at the upper end of the market.

But there is now far greater variety, and average apartment rentals are closer to US$3,000 to US$4,000 (S$4,200 to S$5,600) in buildings such as Plaza Senayan and the Ritz Carlton. For those on tighter budgets, it is even possible to rent a studio apartment in a reasonably central location from as little as US$500 a month.

The steady prices are not the result of persistently low demand. Instead, according to Jones Lang LaSalle, they are the result of the increasing supply and growing competition. Whether such competition will help dismantle long-standing market practices that foreigners find annoying, such as the demand that tenants pay the equivalent of one year’s rental in advance, is difficult to say.

But some companies managing purpose-built condominiums have recently become more flexible, allowing tenants to pay only six months in advance. According to Ms Harsanto, however, many foreign start-ups find this demand still too high and prefer that their employees stay in more expensive serviced apartments that can be rented on a monthly basis.

Overall, however, there is an optimism in the Indonesian property market that is hard to miss. Many players are betting that, with the recent inauguration of President Susilo Bambang Yudhoyono for a second term, the foreign investors that have avoided the country in the past will soon be taking another look. They may well be right.

Source: Straits Times, 30 Oct 2009