JSI Group Indonesia is aiming for growth after Jakarta allows foreign ownership of properties
This change will provide foreign buyers with a better view of the legality as well as tax implications.
He said the Indonesian Government’s policy has helped boost demand, as many markets across South-east Asia and Asia-Pacific have increased taxes and duties when purchasing property.
JSI Group is most well-known for its 11 hotel properties. It has three hotels in Bali and is planning to launch a resort-style condo project.
The group will most likely tap on these foreign ownership rights as they have a big presence in Bali.
The foreign national is limited to only owning a plot of land that measures upto 2,000 sq.m. The price of apartments or landed houses in different cities is also subject to different tiers.
For example, foreigners in Jakarta can only purchase apartment units with a price of at least three billion rupiah when purchasing a land-owned house.
This pricing differentiation ensures locals don’t get priced out and housing stays affordable.
Due to the higher interest rates for longer over the past few years, the mortgage rate between 5.5 and 7.5 percent is still very affordable for Indonesian buyers.
The market would be able to accept rates like this, since the country previously experienced rates that were higher by 13 to 15 percent.
Analysts are optimistic about luxury residential in Indonesia. Beyond the relaxing of foreign ownership requirements, Indonesia’s political climate in 2024 should be conducive.
The increase of 7-9% in the number and wealth of ultra-high net-worth individuals within the country also contributed to the rise in demand for luxurious properties.
JSI Group develops a 667 hectare residential community in Medan. The company plans to expand into the logistics industry in the short term.
Asali visited Singapore to promote JSI Group’s newest development, Savyavasa. Savyavasa in Sanskrit means “living south”. The 3-hectare project is located in South Jakarta in the upscale Dharmawangsa neighborhood.
It is a collaboration of JSI Group with Swire Properties. The joint venture entity Jantra Swarna Dipta has been formed to carry out the project. There are three blocks totaling 402 units.
Jakarta Setiabudi Internasional Group, a listed Indonesian property group, has actively sought out opportunities in Indonesia and abroad.
This follows the announcement by the Indonesian government last September to relax rules regarding foreign ownership of real estate.
Prior to the new policy, which is designed to encourage foreign investment in Indonesia, foreigners had only one type of visa they could use: either a Limited Stay Permit Card (LSPC) or a Permanent Stay Permit Card.
Due to this relaxation, foreigners now only need to pay their usual transaction fees including stamp duties and lawyer fees when purchasing a house.
This system allows individuals to own apartment units located in a property that has been granted an HGB.HGB is an essentially a permission to build on and use land owned by others, most often the state.
JSI Group has said that HGB rights are granted for a period – normally 20 or 30 – but can be extended to successive 20 or 30-year periods. Strata owners are free to sell or transfer apartment units. They can even use their ownership titles as collateral for mortgages.
JSI Group will also promote the project outside of Singapore in Hong Kong as well as mainland China.
Sophie Watson-Swingewood was Swire Properties Indonesia’s vice-president and director. Swire set aside HK$100bn (S$17bn) by 2022 as an investment fund for its core markets. These include Hong Kong, China mainland, South-east Asia.
She added that 20 per cent of this fund would be allocated for residential trading opportunities on these markets. Meanwhile, 30 per cent would go to expanding Swire’s Hong Kong portfolio where the company currently has property in Pacific Place Taikoo Place.
The remaining 50% of the funds will go to China, where it will grow Taikoo Li and Taikoo Hui as retail brands in Tier-1 cities that are already established and those that are emerging. Swire’s plan is to double gross floor area in China for its retail spaces by 2032.
Over 50% of the fund have already been committed.
Swire’s final project in Singapore was Eden at 2 Draycott Park, a luxury freehold residential complex. It sold the 20 units of the development for S$293million, or S$4,827per square foot. The units were all 4-bedders with over 3,000 sq ft each, occupying a full floor.
The company has not found a new project for Singapore. Watson-Swingewood added.
Swire recently purchased a 40% stake in a 136,000 square foot freehold residential project located in Bangkok. It also acquired a minor stakes in two projects in Vietnam.
In South-east Asia it has always been the preference of the company to partner with a local developer in order to take advantage of each other’s advantages. That is what we are also aiming for.
The Hong Kong-listed property developer has remained optimistic despite China’s grim property outlook over the past 12 months.
Swire is investing in two mixed projects for 2023. These are located in Shanghai’s Pudong New Bund Area along the Huangpu River and opposite Taikoo Li Qiantan.
The industry has been pressing for the decision for years to relax property ownership regulations.
Apartments range from 2 bedroom units starting at 131sqm to 336sqm for a 3-bedroom unit, and 496sqm for 4-bedroom units.
Price (before taxes, currency exchange and other costs) of a unit with two bedrooms starts at S$675,000. The cost of a unit with three bedrooms is S$1.02million. Four-bedders are priced at upwards of S$1.4m.
By the end the last year, around 41 per cent of development had been completed. The handover date is expected to be in the second quarter 2025.
In Indonesia, property rights are layered and governed by strata title.
These developments will be our fourth and fifth in Shanghai. They also mark the first time we have entered the residential market on the mainland.
The company has plans to expand further in China – with retail developments planned in Xi’an and Sanya as well as potential retail investments in Liwan, Guangzhou or Futian, Shenzhen.
