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Seaside Living In Indonesia (ST)
But potential buyers of Bintan and Batam properties should be aware they won't get title deeds
Fancy living by the sea but cannot afford Sentosa Cove? You may want to check out two seaside residential developments in the two nearby Indonesian islands of Bintan and Batam.
In Bintan, which is a 45-minute ferry ride away from Tanah Merah Ferry Terminal, Singapore developer BU Holdings is marketing a 162-villa seaside project called Pantai Indah.
BU Holdings is a one-year-old company set up by Mr Chia Tek Yew, a former managing partner of PricewaterhouseCoopers Consulting, specially to develop the Lagoi Bay area of Bintan. Pantai Indah is its first project.
It is partnering Singapore-listed Gallant Venture, whose projects include Nirwana Gardens and Laguna Bintan, for this development.
Buyers get to choose from three- and four-bedroom villas which range from 400 sq m to 800 sq m in size. Prices start at $700,000 and go up to $1.8 million.
The more expensive beachfront villas come with lap pools and the option to install a jacuzzi and Roman bar, while the other units come with optional swimming pools. There is also a clubhouse for residents – with tennis courts and a multipurpose hall, among other facilities.
The project was designed by Singapore-based DP Architects, which counts VivoCity and Resorts World Sentosa as its clients.
The villas are situated near Lagoi Beach Village on the northern part of the island, which will have shopping and food and beverage outlets upon completion in the fourth quarter of 2012.
Established hotels and resorts nearby, such as Banyan Tree, also offer a combined 36 food and beverage outlets and four golf courses.
Ten of the project's 26 beachfront villas have been sold in its soft launch, mostly to expatriates based in Singapore who intend to use the villas for weekend stays or for retirement, said Mr Chia, chairman and chief executive officer of BU Holdings and a Singaporean. There are also some interested investors.
The project will be officially launched early next month.
Over in Batam, which is also less than an hour's ferry ride away, is Montigo Resorts, which offers 88 villas priced from $420,000, and 45 semi-detached and terrace houses priced from $1 million.
The villas are about 280 sq m in size while the houses are in excess of 560 sq m. The developer is Singapore-based KOP Group, whose portfolio includes Ritz-Carlton Residences and Hamilton Scotts.
Designed by Eco-id Consultancy, all homes come with the option of private swimming pools and jacuzzis.
Thirty-six of the 88 units launched for sale have been snapped up. As with Pantai Indah, buyers are both Singaporeans and expatriates based here. For investors, the project guarantees an 8 per cent rental yield, said chief executive officer of KOP Properties Leny Suparman.
Under Indonesia's property laws, foreigners cannot buy freehold land in the country.
Pantai Indah has a 30-year lease that is renewable for up to 84 years, provided owners use the land for residential purposes and pay a lease renewal fee of about 0.5 per cent of the tax assessment value of the property.
"Although the title, which attracts tax, doesn't transfer to the buyer under our lease scheme, it is pretty safe under Indonesian law. Even if the company holding the titles is sold or turns bankrupt, all leases have to be honoured," Mr Chia assured.
Montigo Resorts also has a 30-year lease that is renewable for up to 80 years.
But Asia-Pacific head of Savills' international marketing division Julian Sedgwick {SEE CORRECTION ABOVE} warned about such leases: "If anything happens in Indonesia and laws change, the title deeds won't be with you."
His advice for potential buyers: "Seek legal advice, and make sure you know who the landowner is. For properties which hand you the title deeds, do research to understand the difference between the five or six kinds of titles that exist in Indonesia and check that you have the right title."
Six types of titles exist in Indonesia: the right to use the land (Hak Pakai), the right of ownership (Hak Milik), the right of cultivation (Hak Guna Usaha), the right of structure or building purposes (Hak Guna Bangunan), the right of management (Hak Pengelolaan) and the right of strata title ownership (Hak Milik atas Satuan Rumah Susun). Foreigners are allowed to own only the Hak Pakai title.
