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Despite property prices in prime districts of Singapore
rising by 31 percent over the past 18 months up to the end of
September, Indonesian investors still constitute the largest single
group of foreign real estate purchasers in the island state.
"Around 30 to 40 percent of our current property investment comes from
overseas, and of that figure, around 30 to 35 percent comes from
Indonesia," Kan Kum Wah, marketing head at Singaporean property
consortium BFC Development, told The Jakarta Post on Tuesday.
Meanwhile, according to a report published in September by DTZ -- a
real estate consultancy firm, of the 1,561 apartments sold by
developers in the second quarter of 2006, foreigners accounted for 22
percent of the purchasers (with a total of 343 transactions), with
Indonesians emerging as the top nationality, accounting for 23 percent
of total foreign transactions.
The report also states that after years of negative growth since the
1998 crisis, foreign investment in Singapore reached a record high this
year. He added, however, that investment by Indonesians had always been
high.
Kan put forward a number of reasons why Singapore remained attractive
to Indonesians: lower capital value compared to other business centers,
such as Hong Kong; security as an investment destination; good returns;
and the fact that many Indonesians had businesses in Singapore.
"Many Indonesians consider Singapore to be a second home," Kan said.
He explained that Indonesians were savvy investors who preferred to
purchase new properties equipped with a wide range of facilities. They
were also seeking properties that were located close to shopping
precincts, medical facilities and financial institutions.
Currently, with the support of the Singaporean government, BFC
Development, a consortium of three of Asia's top property developers --
Cheung Kong Holdings, Hongkong Land and Keppel Land -- is building the
new S$2 billion Marina Bay Financial Centre and Residences, which is
frequently compared to London's Canary Wharf.
Singapore's minister for national development, Mah Bow Tan, has said
that the new financial center reflected the government's commitment to
planning and providing a quality, vibrant environment for people to
"live, work and play."
The financial center will add around 150,000 square meters of grade A
premium office space, and combined with the One Raffles Quay office
towers adjacent to it, the development will double the supply of
top-tier office space in Singapore's central business district.
Regarding residences, Kan said the development also consisted of 428
luxury apartments with water views and private outdoor terraces.
Residents of the apartments would have access to water sports, museums,
art centers and even a casino.
"We have received enormous interest from Indonesian investors. Many of
them are interested in buying multiple office floors. Most of them are
traders, some are from oil and gas companies and some are in the
infrastructure sector," Kan said.
According to Singaporean law, foreigners are only eligible to invest in
or purchase properties that are located higher than six stories. In the
case of apartments, these must be classified as condominiums.
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