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Batam has high foreign ownership potential, says developer

Despite the government having yet to issue revised regulations on property, especially regarding foreign ownership of property, several local and foreign developers have found regions with A-class market potential in Indonesia

The Jakarta Post
Thu, November 19, 2015

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Batam has high foreign ownership potential, says developer

D

espite the government having yet to issue revised regulations on property, especially regarding foreign ownership of property, several local and foreign developers have found regions with A-class market potential in Indonesia.

While a clear policy regarding foreign ownership of property remains unresolved, several property giants have their own preferences for which regions in Indonesia could potentially draw an upper-income market and foreign investment.

Ciputra Group, a major property developer in the country, for example, says that of all the regions in Indonesia, Batam is the one where it is the most likely that foreigners will be interested in buying and owning property due to its proximity to Singapore, one of the world'€™s leading centers of business and finance.

'€œThe location is close to Singapore. This makes potential for Batam to draw foreign buyers and investors,'€ Ciputra Group CEO Candra Ciputra told kompas.com recently.

The city is a draw for investors in property, especially for houses, apartments, shopping centers and industrial estates, he said.

Apart from the proximity to Singapore, the price of land and property is still very low, he added.

Quoting the Commercial Property Development Report released by Bank Indonesia (BI), the cost of leasing an apartment is still around Rp 22.5 million per square meter per month.

'€œCompare that price with the prices in Singapore, which are already at the level of Rp 800,000, and where the value of property is billions of rupiah per square meter,'€ Candra said.

Due to the exorbitant price of property, Singapore has now implemented a policy to reduce the price of property. Candra explained that with this in mind, Batam stood a good chance of becoming the best investment area for the high-end market.

'€œNevertheless, this depends a lot on how the government manages Batam. Will the government soon finalize the policy regarding foreign ownership of property in the country? If the policy is implemented, Batam is the best,'€ Candra added.

Premium property estate

Ciputra Group has responded to the opportunity and the potential presented in Batam by developing CitraLand Megah, a premium property estate occupying 15 hectares of land.

The typical residential units will have areas of 245 square meters, 330 square meters and 490 square meters, with land area of between 160 and 280 square meters.

The initial prices will start at Rp 3 billion per unit. Aside from residential properties, the developer will also construct a hotel, office building, Fit Centrum fitness center and other supporting facilities.

Ciputra Group also provides another investment option, The Ritz Walk ruko (shophouses) occupying 8,000 square meters. The strip mall is part of the CitraLand Commercial Center with total investment of around Rp 100 billion.

The Ritz Walk is projected to become the lifestyle center of Batam'€™s well-heeled, under the management of Colliers International.

The Ritz Walk comprises three-floor units. The design adopts modern architecture, with the ground area 5-by-17 square meters and building area 245 square meters. Each ruko unit has a 1:5 parking ratio.

James Bond-inspired lifestyle

Meanwhile, Ciputra Group and Aston Martin Jakarta recently unveiled the '€œLuxury Lifestyle, Live like Bond'€ program.

The promotional program offers bundles comprising a luxury house in CitraLand Megah Batam and an Aston Martin V8 Vantage N430 sports car.

The opulent lifestyle seen in most James Bond movies has been chosen to fit the type of residential estates developed by Ciputra Group.

'€œWe are targeting the upper-level and high-end market. And a James Bond-inspired lifestyle with Aston Martins as the vehicle of choice represents this level of luxury,'€ Candra Ciputra told kompas.com recently.

The developer has readied 12 houses, each bundled with an Aston Martin.

They are ready to supply more of the sports cars upon request and throughout the program which is set to last for six months, according to Aston Martin Jakarta CEO Irmawan Poedjoadi.

'€œThe potential for people buying luxurious cars in Indonesia, especially in Batam, is similar to the potential of people purchasing luxurious residences. The market is there and it is quite big. Another selling point is Batam'€™s location which is close to Singapore,'€ Irmawan said.

With the bundling product, customers can take home some benefits. Aside from the houses in CitraLand Megah Batam and the Aston Martin cars, they get free swimming pool maintenance for one year, free land and building duty (BPHTB), sale and purchase deed (AJB), power and water transfer tax and certificate.

The houses come complete with a Vivere furniture package, Bang & Olufsen sound system, private swimming pool, smart control or smart home system and al fresco dining concept.

Aston Martin Jakarta is offering three years of insurance and free maintenance for one year or 10,000 kilometers.

'€œFor Rp 6.5 billion, our customers can experience this wholesome luxury in Batam. In Jakarta, with that kind of money, customers get only one of those two, while in Batam, they get both,'€ CitraLand Megah Batam director Baron Indradjaj stated.

Japanese developers

Colliers International Indonesia in 2014 released a projection in which the Serpong area in Tangerang was expected to experience a property boom within the next five years. The projection has proven accurate, as more and more big developers, some from Japan, invest their money in the area.

Tokyu Land Corporation, through Tokyu Land Indonesia and Mitsubishi Corporation, is reported to have invested US$300 million or about Rp 4.3 trillion in BSD City, Serpong.

The money is to be used for the development of the BRANZ BSD project '€” a high-class apartment complex located in BSD.

'€œThe huge investment is deemed feasible as they see Indonesia as a big market, in fact the biggest in Southeast Asia,'€ Tokyu Land Corporation president and CEO Hitoshi Uemura said.

BRANZ BSD is an eight-story apartment tower complex housing 3,000 apartments occupying 5.3-hectares of land. In the first phase of the development, the developer will construct three towers which will have 1,256 apartment units worth US$100 million.

Expatriates


The Serpong area is considered prospective. Aside from well-developed infrastructure, it has good access routes.

Facilities available in Serpong include universities, hospitals and shopping centers. There is also a Transjakarta bus feeder, train station and toll road access. All this and more makes reaching Jakarta easy.

Big developers also target the needs of expatriates. The Tangerang golden triangle area '€” Lippo Karawaci, Summarecon and Paramount Serpong '€” are seeing the arrival of more and more expatriates. That'€™s why developers are jumping on the bandwagon and developing apartments and hotels in Serpong.

The strong demand from expatriates from Japan and South Korea is influencing the high occupancy rates in high-class apartments or hotels in the area. Aside from the two countries, a large number of expatriates come from China.

The findings of Archipelago International have strengthened the conviction, revealing the high potential for residential areas in the Tangerang golden triangle.

Based on research conducted by Archipelago in 2014 through its hotel chain, there is only a slight difference in hotel occupancy rates between the golden triangle and Jakarta. Occupancy rates in the area can reach between 85 and 90 percent.

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