Singapore’s CapitaLand is boosting its portfolio in Indonesia by picking up a serviced residence project in downtown Jakarta for S$74.3 million ($55 million), as part of the developer’s growth drive across southeast Asia.
CapitaLand unit The Ascott Limited is acquiring the project on a turnkey basis through its $600 million global serviced residence fund with Qatar Investment Authority (QIA). To be named Ascott Sudirman Jakarta, the 192-unit property developed by Indonesian real estate firm Ciputra Development Group is scheduled to open in 2018.
Ascott, CapitaLand’s wholly owned serviced business, has also secured a management contract for a 230-unit project in Bali, which it plans to operate under its Citadines brand starting in 2020.
CapitaLand Bets on Indonesian Growth
“We have identified Indonesia, the largest economy in Southeast Asia, as one of the growth markets for CapitaLand,” commented Ronald Tay, CEO of CapitaLand Singapore in a statement. “We will continue to explore opportunities to grow CapitaLand’s presence in the country,” added Tay, who also oversees the Indonesia market.
Ascott has strengthened its lead as Indonesia’s largest service residence operator by adding almost 600 units to its portfolio in the country this year, counting the two newly-signed deals. The new residence units also include a project in Jakarta that Ascott acquired for its mid-range Somerset brand in July.
“The supply of international-class serviced residences is lagging the rising demand from expatriates and travellers, as more multinational companies set up offices in Indonesia,” Ascott CEO Lee Chee Koon noted in the statement. “We see huge potential for us to grow in Indonesia through our established Ascott, Citadines and Somerset brands as well as to bring our millennial brand, lyf, to the country.”
$163M Mixed-Use Project Also Said on Track
CapitaLand is also reporting progress on its first integrated development in Indonesia, The Stature Jakarta, which the Singaporean property group says is on track for completion by 2020. The S$220 million ($162.7 million) development near Jakarta’s upscale Menteng area combines a residential tower, serviced residence tower and a grade A office building with retail outlets. CapitaLand formed a joint venture with local developer Credo Group in 2014 to build the 55,500 square metre complex.
Ascott Sudirman Jakarta forms part of the downtown Ciputra World 2 integrated development, which also includes a grade A office tower and shopping amenities, and marks Ascott’s sixth serviced residence project in the city centre of Jakarta. CapitaLand has delivered 16 such projects in Indonesia over the past 22 years.
Singaporean Giant Ramps Up in Southeast Asia
The moves in Indonesia are part of a regional growth spurt for CapitaLand, the largest developer in southeast Asia. The Singaporean property group with a global asset portfolio of over $59 billion has added more than 3,100 serviced residence units in Singapore, Malaysia, Vietnam, Philippines, Thailand and Indonesia so far this year.
As part of the regional expansion drive, CapitaLand closed its first Vietnam commercial property fund at $300 million last month. The new vehicle will target grade A offices in the country, which is CapitaLand’s third-largest market in southeast Asia by asset size after Singapore and Malaysia.
The property group announced a flurry of leadership changes last week, in which Ascott CEO Lee Chee Koon will take over as CapitaLand’s group chief investment officer effective January 1. Ascott’s current chief operating officer, Kevin Goh Soon Keat, will succeed Lee as CEO of the serviced residence operator.