JSI Group in Indonesia is looking for growth following Jakarta’s opening of the doors to foreign ownership
Swire plans to invest in two mixed use projects in Shanghai, Pudong New Bund Area, by 2023. One is opposite Taikoo Li Qiantan. The other is along the Huangpu River waterfront.
The Group’s fourth and five developments in Shanghai will include our first residential venture in mainland China.
The company intends to expand its operations in China, including retail developments in Xi’an (Sanya) and Liwan district in Guangzhou as well two possible retail investment opportunities at Futian district in Shenzhen.
Jakarta Setiabudi Internasional Group (JSI Group), a property company listed in Indonesia, has been actively searching for opportunities domestically and abroad.
He noted that the Indonesian approach had helped stimulate demand in many South-east Asian and Asia-Pacific markets, which levy higher taxes and duties for property purchases.
JSI Group’s largest portfolio, with 11 properties, is the hotel sector. Three hotels are owned by the group in Bali and they plan to launch a new resort style condo development.
The group is well-known in Bali, so they will be able to take advantage of this foreign ownership.
In Indonesia, a foreigner can only own one plot up to 2,000 square meters in size. There are also different price tiers when purchasing landed homes or apartments in Indonesia.
Foreigners cannot buy apartment units in Jakarta unless they pay a minimum of five billion rupiah.
The difference in price ensures that locals do not lose out on housing and the cost of living remains affordable.
In spite of the fact that interest rates have been rising for longer, the current rate is still affordable to buyers in Indonesia.
As the market had experienced rates higher than 13 to 15% in the past, it should be able o accept this rate.
Analyst remain optimistic on the luxury housing segment in Indonesia. In addition to the eased requirements for foreign owners, the country’s political situation is expected in 2024 to be conducive.
The rise of 7 to 9 percent in the number ultra-high-net worth individuals has also supported the demand for luxury real estate.
JSI Group currently is developing a 667 hectare residential township near Medan. The company will also be entering the logistics market in the near future. Demand for logistics in Indonesia has been huge.
Asali was at Singapore to promote JSI Group’s newest project, Savyavasa. Savyavasa is Sanskrit for living south. The development, which covers 3 hectares in South Jakarta’s Dharmawangsa area, is a part of the high-end neighbourhood.
The project was developed in collaboration with Swire Properties under the joint venture entity Jantra Swarna Dipta. It has three blocks and 402 total units.
It comes after the Indonesian authorities announced last September that they would relax rules on foreign ownership.
Foreigners could only buy property in Indonesia with a limited stay permit card or permanent stay permit card.
This relaxation means that foreigners are only required to pay the normal transaction fees like stamp duties and legal costs, just as locals do when they purchase a property.
Since years, industry players have been pushing to loosen the rules on property ownership.
This change allows foreign buyers to have a more clear view of legality, tax implications and the like during their purchase.
The apartments range in size from two-bedroom apartments starting at 131 sqm, to three-bedroom units up to 336 sqm and four-bedroom ones with a maximum of 496 sqm.
Prices for two-bedroom units start at S$675,000. Three-bedroom units cost S$1.02 Million. The price of a four-bedder can reach S$1.4million.
By the end last year, approximately 41 percent of the construction was complete, and the date of handover is around the second half of 2025.
In Indonesia, the ownership of an apartment is typically held by a strata title. It’s usually overlaid with a Hak Guna Bangunan title (HGB), creating a common layered structure for property rights.
This system allows the individual ownership and possession of apartment units in a building situated on land with an HGB title. HGB is basically a right for someone to own land and build buildings on it. Usually, this is the state.
JSI Group explained that the HGB is granted to a person for a set period of time – usually between 20 and 30 years – which can be renewed for successive periods of 20 or 30, respectively. Strata title owners can freely transfer or sell their apartment units and use their ownership title for mortgage collateral.
JSI Group wants to promote its project not only in Singapore but also in Hong Kong and the rest of mainland China.
Sophie Watson-Swingewood said Swire’s vice-president director of Indonesia, Swire Properties, had set aside HK$100 billion (17 billion S$) in 2022 to invest in the core markets in South-east Asia, Hong Kong, and mainland China.
She stated that 20% of the fund will be allocated for new residential opportunities in these market, and 30% to expanding Swire’s office portfolio in Hong Kong where it holds property at Pacific Place and Taikoo Place.
The remaining half will be allocated to the China market in order to grow Taikoo Li’s and Taikoo Hui’s retail brands, both existing and new Tier-1 cities. Swire plans on doubling the retail floor space of its stores in China by 2032.
So far, more than half of the funds have been committed.
Swire’s last project was the luxury freehold development Eden at Draycott Park. All 20 units were sold in 2021 at S$293 million or S$4,827 each. The four-bedders were each over 3,000 sqft and occupied a whole floor.
The company is looking for a project in Singapore. Watson-Swingewood added.
Swire acquired a 40 percent interest in an 136,000 sq. ft. freehold project in Bangkok as well as a small stake in two Vietnamese projects.
In South East Asia, the company always partnered up with local developers to benefit from each other’s strengths. We believe that’s also where we want to go.
Hong Kong’s listed developer remains optimistic about China’s future, even though the outlook for China’s real estate has been poor over the last year.
