Singapore's Property Market Targets Indonesia

Indonesians are among the three top foreign buyers of property in Singapore, particularly luxury apartments. (IST) JAKARTA (IFT) - Indonesia is now the target market of Singapore’s property developers, among them Raffles Quay Asset Management, a property company developing and marketing the Marina Bay Financial Center project in Singapore.

"About 30-40 percent of Marina Bay Residences and Marina Bay Suites’ prospective buyers are foreigners. Most are Indonesian citizens," said Lester Lim, Head of Marketing Communication of Raffles Quay Asset Management.

Thomas Tan, Head of Residential Marketing of Raffles Quay Asset Management, said the Indonesians choose Singapore because of the country’s political and economic stability. Interest rates in Singapore are also low, in the range of one percent, while rental yield is around three percent per year.

The property investment climate in the Asia Pacific region also encourages competition. The Marina Bay area has been set by the Singaporean government as the new development area in the city-state.

The Marina Bay Financial Center spans an area of more than 278 thousand square meters, costing S$ 4.5 billion (US$ 3.44 billion)," said Lim.

The first phase of construction included office Tower 1 and Tower 2, the Marina Bay Residences, as well as some parts of the mall. Tower 1 consists of 33 floors and Tower 2 has 50 floors. Marina Bay Residences is comprised of 428 units, 80 percent of which are already inhabited. The construction of phase one was completed in 2010.

The construction of phase two includes the Tower 3 office building (46 floors), the Marina Bay Suites apartments with 221 units, as well as the development of malls. The mall’s total area is more than 16 thousand square meters. Construction of the second phase is still ongoing and is targeted for completion in 2013.

According to Thomas, of the Marina Bay Suites' 221 units, 146 units are already sold. Each apartment unit is priced in the range of S$ 3.5 million to S$ 9 million. Meanwhile, 98 percent of the mall's first phase area has already been absorbed. For the second phase of the mall, absorption has reached 90 percent.

This area will have direct access to the mass rapid transit (MRT) station and other commercial areas around Marina Bay.

Based on data from the Far East Organization, one of Singapore’s property companies, Indonesians are among the three top foreign buyers of property in Singapore, particularly luxury apartments. The majority of these Indonesians spend US$ 1.2 million to US$ 4.2 million (Rp 10.2 billion to Rp 35.7 billion) per unit.

Data from the Urban Redevelopment Authority of Singapore also showed that 1,706 Indonesians purchased private homes in Singapore last year.

Ali Hanafia Lijaya, a Property Observer of Century21 Indonesia, assessed that the Asian market is still more promising than Europe’s, so it is not surprising that many Indonesians are purchasing properties in Singapore. According to him, the level of safety and comfort the country offers are the main reasons for the choice.