Complete Property Market Updates of Singapore

June 4, 2008

Gallant units sell land worth $45m at Bintan’s Lagoi Bay

Filed under: Developer News,General,Hotel,Indonesia,Land Sale — Propertymarketupdates @ 5:35 am

TWO subsidiaries of Singapore-listed Gallant Venture Ltd announced on Friday the sale of S$45 million worth of land at Bintan’s new Lagoi Bay development.

PT Bintan Resorts Cakrawals and PT Buana Megawisatama indicated they had sold close to 300,000 square metres at Lagoi Bay on Bintan’s northern coast for various resort, hotel, residential and retail projects. The buyers included property developers as well as resort owners, including niche hotel chain Alila Hotels and Resorts, which plans to open a luxury boutique hotel at Lagoi Bay.

The palm-fringed bay with its long stretches of silver-sand beaches is billed as Asia’s first master-planned beach resort, spread across 1,300 ha. On offer for sale within the development are seven prime beachfront resort sites and over 400 ha of residential sites. Also planned are retail malls, a golf course, a marina and a retirement village.

Bintan, part of Indonesia’s Riau islands, lies 45km south-west of Singapore. It contains an industrial park but has been increasingly positioning itself as a leisure destination. It has witnessed an increase in visitor arrivals from 113,494 in 1996 to 333,749 last year – although growth has remained flat since 2001. About one third of visitors last year were from Singapore, while more than 20 per cent came from Korea and Japan.

‘We envisage one million visitors to Bintan annually by 2012,’ said Gallant’s CEO Eugene Park. He added that Gallant will be investing S$500 million in the island over the next four years, including on roads, power, water and telecom facilities, a new airport to attract short-haul traffic and faster ferries from Singapore – which would cut down travel time to around 40 minutes from one hour at present.

‘We want to develop Bintan as an alternative to Bali and Phuket as a destination of choice for the beach tourist,’ he said.

Gallant’s major shareholders include Indonesia’s Salim group, and Singapore’s Sembcorp Industries, as well as Ascendas.

At a briefing prior to the ground-breaking ceremony of Lagoi Bay, the Regent of Bintan, H. Ansar Ahmad, said the Bintan regency ‘has issued a special regulation for all land in Bintan Resorts and Bintan Industrial Park to be designated as a vital area of the region and be accorded special protection and privileges which prohibit all forms of demonstrations or protests’.

He added that the Regency ‘has also established a one-stop service for all investment licensing and processing, thus doing away with the hassle of having to go to multiple agencies’.

With the establishment of this service, the time needed to obtain all licences will be reduced to only 33 days, he said – about the same as in Malaysia, China, Thailand and Vietnam.

The formal groundbreaking ceremony at Lagoi Bay was performed on Friday night by Riau Islands Governor Ismeth Abdullah.

Source : Business Times – 12 May 2008

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February 28, 2008

Growth in S-E Asia property market sustainable: DTZ

Filed under: Agency News,Commercial,Indonesia,Malaysia,Rental News,Vietnam — Propertymarketupdates @ 4:16 pm

THE property markets of South-east Asia are expected to sustain the buoyant growth seen in 2007, says DTZ Debenham Tie Leung.

DTZ said that residential markets in the region are expected to continue to grow, ‘driven by steady economic expansion, increasing affluence and increasingly attractive projects as developers strive to refine concepts’.

In Vietnam, DTZ noted that demand for residential properties, which was already growing fast, was bolstered by the recent relaxation in rules for housing ownership, allowing foreign land ownership terms to increase from 50 to 70 years. DTZ said this also encouraged foreign developers to build residential properties there.

In Malaysia, DTZ said take-up was encouraging for high-end condominiums in Kuala Lumpur, with a complete sell-out for several luxury projects. This was supported by the relaxation of rules for foreigners to buy residential properties and the waiver of real property gains tax last April. While monthly average gross rents remained unchanged at RM4 (S$1.25) per square foot, average capital values increased 3 per cent year-on-year to an average RM500 (US$152) psf.

The residential market in Thailand is also expected to recover, as the political situation improves and developers are encouraged to launch projects which have been withheld.

In the office sector, DTZ says demand for office space in Vietnam is expected to continue to be underpinned by limited potential supply. It said that in Vietnam, most potential supply comprises non-prime office buildings, ‘which will lead to greater competition for prime office space’. Occupancy remains high, at above 95 per cent, while Grade A rents average US$3.70 psf per month in Hanoi and US$4.37 psf per month in Ho Chi Minh City.

The office market in Kuala Lumpur was also active, with increasing demand by the services, oil and gas, information technology and financial sectors. Together with limited new supply, prime office rents rose 7.8 per cent year-on-year to RM62.65 (US$18.16) psm.

Jakarta also saw office occupancy rates of over 90 per cent. Rents did, however, remain at about US$0.76 psf per month amid fluctuations in exchange rates.

The Bangkok office market was the only one that was subdued, with a negative net absorption for H1 2007. DTZ said this was due to a less favourable operating environment which affected investors’ confidence.

Source : Business Times – 5 Feb 2008

November 30, 2007

Stephen Riady: Man with a vision

Filed under: Developer News,Genius Thoughts,Indonesia — Propertymarketupdates @ 9:16 pm

CHOW PENN NEE speaks to Lippo Group’s Stephen Riady whose business acumen has led the firm make several strategic property investments.

THE Lippo Group should be familiar to Singaporeans by now, with its brand name plastered on more than a dozen property developments across the island, and less obviously, behind the ownership of retailers Robinsons and River Island.

At the helm of Indonesian conglomerate Lippo’s business empire in Singapore is Stephen Riady, whose entrepreneurial spirit is well known.

Mr Riady, executive director of Auric Pacific Group, clinched the Strategic Investment Entrepreneur of the Year award in Ernst & Young’s Entrepreneur of the Year Awards for Singapore this year. Among the criteria for the award are traits like strong financial performance, personal integrity and entrepreneurial spirit.

His group’s move into property has been strategic, given current, sky-high property prices, and the fact that he went into the market much earlier on.

‘We started off with the purchase of Lippo Centre on Shenton Way at the end of 2004,’ Mr Riady told BT in an earlier interview. ‘You think people come to us asking us to buy? No. We went out, and at that time, there were no bidders,’ he recounted.’Wise investors are those who have a vision, they are the ones who see something that other people have not seen … Then they start taking action, instead of just waiting there.’- Stephen Riady, Auric Pacific Group executive director

The building has since been sold for $350 million – or more than double the $151 million purchase price – earlier this year. ‘There were signs that the Singapore economy was in good shape in 2005 and 2006, so we continued buying,’ he said.

Citing the hallmarks of a good entrepreneur, he said one must have the ability to understand timing and be willing to invest and take risks. ‘We should be willing to go outside our comfort zone.’

Recounting how he started investing in Singapore, he said: ‘When the Singapore government talked about plans to remake this place, lots of people heard about it. But we believed in it and took action early.’ And that, he says differentiates the wise investors from the foolish ones.

‘Wise investors are those who have a vision, they are the ones who see something that other people have not seen,’ he says. ‘Then they start taking action, instead of just waiting.’

Foolish investors, on the other hand, wait for opportunities to come but they still don’t take it, he said. ‘The opportunity leaves and then they say they regret not having taken it.’ The Lippo group has so far amassed nine residential developments, five commercial properties and two retail brands, with a total value of $4 billion in Singapore.

The Lippo group has so far amassed nine residential developments, five commercial properties and two retail brands in Singapore, with a total value of $4 billion.

Mr Riady hopes to go further, increasing the value of the group’s portfolio from $7US billion in assets at present to $20US billion within five years.

The group’s retail arm is also expanding aggressively. The business includes Auric Pacific – a distributor of fast-moving consumer food and non-food products, Robinsons, and various clothing stores.

‘The plan for our retailing business is to grow turnover from the present $2US billion to $5US billion in five years’ time,’ said Mr Riady.

His entrepreneurial instincts showed up early. Every school holiday, Mr Riady would return to the family business – set up by his father Mochtar Riady – to learn the ropes. The elder Riady started the Lippo business with a bank and has since built up a vast conglomerate spanning property, banking, and retail.

‘My dad didn’t say that I had to join the business, but since we already had it, somehow in university you just naturally major in business. You don’t think about it.’

He considers working in a family business advantageous as there is a ‘consultative environment in which both timeliness and calculated risk-taking strategies can be explored, discussed and implemented’.

‘To any entrepreneur, these two elements are key to the success of a business,’ he said.

At 46, the businessman is at the top of his game, and continually trying to improve. ‘A lot of people have mid-life crises because they get stuck and they are not inclined to grow or learn anymore,’ he said.

‘I really believe in growing because without growth, we will have crises and problems. We must train ourselves to learn.’

Source : Business Times – 29 Nov 2007

October 31, 2007

Indonesian firm to list retail Reit on SGX

Filed under: Indonesia,REIT — Propertymarketupdates @ 5:04 pm

INDONESIA‘S eighth largest real estate developer, PT Perdana Gapuraprima, part of the Gapuraprima Group, is looking to list a retail real estate investment trust (Reit) on the Singapore Exchange in early 2008.

Speaking at a press conference here yesterday, president director Rudy Margono said that the Reit will be a joint venture with Amanah Raya Berhad, a company owned by the Malaysian government.

Mr Margono said that Gapuraprima is expected to inject five malls into the Reit, and Amanah Raya two. He also revealed that the assets have an estimated value of US$250 million. He expects the retail Reit to offer a yield of between 9-10 per cent. PT Perdana Gapuraprima’s real estate assets are worth about US$500 million, he added.

Mr Margono also revealed that the three-to- five-year-old malls outside Jakarta are in cities like Solo and Bandung.

In August, Amanah Raya, together with Kuwait Finance House, acquired two villa apartment blocks in Reflections at Keppel Bay for about S$286 million. For Gapuraprima, Mr Margono said the retail Reit is largely a way for the group to divest its properties and use the capital for further expansion in the real estate business in the region.

Mr Margono said: ‘Our vision is to be one of Asia’s largest property developers, with property development projects in various countries around the region.’

PT Perdana Gapuraprima was listed on the Jakarta Stock Exchange last week and shares last traded at around 345 rupiah, up 11.3 per cent on its IPO offer price of 310 rupiah a share. The new share issue forms about 30 per cent of PT Perdana Gapuraprima’s paid-in capital after the IPO.

Mr Margono said that in FY07, the group achieved a net profit of 46.9 billion rupiah (S$7.5 million) and 514 billion rupiah in revenue. He expects the yield of its Indonesian properties to be 8-9 per cent.

He added: ‘We have also seen a capital gain of 15-20 per cent for our properties in Jakarta annually in the past 10 years, which we hope will instil more confidence in our investors investing in the group.’

Source : Business Times – 30 Oct 2007

Ex-wife gets to keep $4m properties on appeal

Filed under: Financing,Indonesia,Legal Ground — Propertymarketupdates @ 4:52 pm

AN INDONESIAN woman who was initially given 35per cent of her ex-husband’s two apartments in Bedok Court by the High Court in February will now get to keep all 100per cent instead, involving a sum of more than $4million.

This follows a Court of Appeal ruling on Wednesday which, among other things, also ordered Indonesian businessman Aspin Suryanna, 59, to hand over to Madam Alicia Tjia, 50, a Mercedes-Benz and Nissan X-trail.

The increased award came after the court heard arguments from Madam Tjia’s lawyers from Harry Elias Partnership that Mr Suryanna’s assets in Indonesia had not been fully accounted for and had not been included in the division of the matrimonial assets.

Besides six declared properties in Indonesia, Mr Suryanna is said to have other properties, including three warehouses in Medan and seven other units in Jakarta.

It is understood that the court viewed his assets in Indonesia as quite substantial, on which it was unable to place a dollar value.

As part of the settlement, Mr Suryanna gets to keep his assets in Indonesia, as well as shares in Japan Macro Fund valued at some $2.1million.

In addition, the court – comprising Chief Justice Chan Sek Keong, and Judges of Appeal Andrew Phang and V.K. Rajah – also lowered the lump sum maintenance award for Madam Tjia, from $800,000 to $500,000, taking into account the size of the assets now awarded to her.

Legal observers felt that the outcome was a ‘win-win’ for both parties – as they stood to gain from the steep rise in asset values since the earlier High Court decision in February.

The couple had been married for 27 years before they split in 2004.

Madam Tjia was a 20-year-old undergraduate when she met Mr Suryanna, who was then 29.

She dropped out to marry him a year later in August 1977, against her parents wishes.

The couple had three sons born in 1979, 1981 and 1984. Some time in 1996, she moved here to look after the children, who were studying in Singapore schools.

Her husband, a businessman selling motorcycle spare parts in Indonesia, visited her once a month but stopped doing so in June 2002.

The couple divorced on the grounds that he had deserted her for more than two years.

In arguing for an equal share of the assets, lawyers Koh Tien Hua and Tan Shin Yi, for Madam Tjia, had argued that she sacrificed her own university education on her husband’s orders, and raised their three sons almost single-handedly while her former spouse was amassing his fortune.

They argued that even the High Court did not buy Mr Suryanna’s claim that the numerous properties he owned in Indonesia were assigned to his creditors along with his business.

He had also emptied more than US$4million (S$5.8million) from several bank accounts before and during the proceedings, which would otherwise have been matrimonial assets.

Mr Suryanna, through lawyer Syn Kok Kay, had submitted that he was indebted to his suppliers to the tune of more than US$4million.

The money withdrawn was therefore not for his own use, but transferred directly to his suppliers.

Mr Suryanna also claimed that Madam Tjia led a lavish lifestyle, and therefore deserved a smaller maintenance claim.

Madam Tjia declined comment when contacted through her lawyers.

Source : Straits Times – 27 Oct 2007

October 15, 2007

Gems in a booming Indonesian market

Filed under: Indonesia — Propertymarketupdates @ 8:55 pm

WHEN the wind blows in Jakarta these days, you could well be blinded by a blast of sand and grit swept up from construction sites that seem to have sprung up everywhere.

Condominiums, offices, malls, mixed housing-retail-office complexes and even whole townships are in various stages of construction in the city – from the heart of downtown to suburban fringes.

Jakarta, as the eye can plainly see, is undergoing a building boom. Powered by a steadily recovering economy and declining interest rates, the property market has been putting up a robust showing in the past year.

On the commercial front, landlords have been happily raising office rentals, riding on a swelling wave of demand as companies grow more confident, expanding into larger and better facilities.

In the first six months of this year, for instance, average gross rental rates outside the central business district (CBD) rose 14.2 per cent from the end of last year, according to the latest market review – for March to June – published last month by local property consultancy Procon Indah.

The same review indicated that the average occupancy rate of CBD office space scored a new post-Asian financial crisis high of 86.8 per cent, up from the previous quarter’s 84.5 per cent.

Outside the central business district, the average occupancy rate stood at 89.8 per cent for the first half of this year, up from 87.4 per cent at the end of last year.

Performance in the housing segment remained strong as well during Q2, even as more projects with competitive pricing flooded the market. The condominium market continued its growth trend of the first quarter, with cumulative sales rate reaching 94.2 per cent, said Procon Indah.

Meanwhile, land prices went up 6.7 per cent on average in Greater Jakarta residential estates. And with mortgage interest rates falling to an unprecedented 8.8 per cent, down from 12-14 per cent a few years ago, there is still potential for more sales growth, say analysts.

A similar story has been unfolding even more dramatically on the stock market, where property counters have been outpacing the general market bull.

In the last six months between the end of March and Friday last week, the Jakarta Composite Index rose 36.6 per cent, breaking through 2,500 points for the first time to close at 2,500.6 points.

But the property index did even better. Comprising some 30-plus counters, it scaled 72.1 per cent in the corresponding period to close at 246.5 points.

An important point to note here is that property shares remain the only channel for foreigners wanting some play in the sector, as they are barred from buying property directly.

But has the property market passed its peak? How much more upside can be expected for investors coming late into the game?

Analysts acknowledge that it is unlikely for the sector to achieve similar breathtaking gains in the near future. Already, some are re-evaluating the net asset value (NAV) of several counters.

‘Popular listed developers like Summarecon Agung have already reached fair value,’ noted one analyst with a foreign brokerage. Several have even run ahead of their value, he added.

Still, there could be a few more gems waiting to be uncovered. Selected stocks like Ciputra Surya and Lippo Cikarang remain undervalued and have decent upside potential, say analysts. And should the government decide to open up property sales to foreigners – an idea that has been bandied about and discussed recently – another big boost can be expected. Such a major change, though, is not likely to happen this year.

‘But on the whole, much of the sales and planning have been done. We’re now moving into the construction phase,’ observed one analyst.

In that regard, it might be wiser and more profitable to look to the construction and raw materials sector, where the sun is just about to rise.

Analysts forecast a rise in construction activity in the next one to two years, based not only on the buzz in the private property sector, but even more so on an expected swell in state spending on sorely needed public infrastructure.

In the draft state budget for next year announced recently, the government raised the allocation for public works by 41 per cent, and that for transport by another 64 per cent.

The money will be spent on building new road networks, improving and constructing airports and railway lines.

As one analyst noted: ‘Elections are less than two years away. In that time, the government will want to demonstrate that it has done something to improve public infrastructure.’

Counters to watch include state-owned construction giant Adhi Karya, which is likely to land major government contracts, and Total Bangun Persada, a veteran brand-name in the industry. Investors are also eyeing the impending IPO of state-owned builder Wijaya Karya, due next month. Related sectors like cement production could be worth some attention too.

In short, there is still good gain to be had in the property and construction sector. It’s just a matter of knowing where to look. Take a cue from the sand and grit swirling in the city, for a start.

Source : Business Times – 9 Oct 2007

September 18, 2007

Indonesian group set to take over Shining Corp

Filed under: Commercial,Developer News,Indonesia — Propertymarketupdates @ 4:58 pm

AN INDONESIAN group is poised to take over Sesdaq-listed building contractor and
buildings materials supplier Shining Corporation and turn it into a property
developer in Singapore, with a focus on high-end residential projects.

Shining Corporation said yesterday it has entered into an agreement for British
Virgin Island-incorporated Citipoint Asia Real Estate Capital, which is owned by
Indonesia’s GoldenFlowerGroup, to invest up to about $42 million in the company
for a 69.2 per cent stake.

Citipoint is a special purpose vehicle wholly owned by Indonesian Nico Po who,
together with his Indonesian father Po Sun Kok, control the GoldenFlowerGroup,
whose interests range from apparel manufacturing to financial services and real
estate. In Singapore, the group’s investment holdings include MacDonald House,
an office building along Orchard Road, and 51 apartment units at Suite@Central,
also in the Orchard Road area. A recent en-bloc acquisition of residential land
at 55 Devonshire Road is set to launch the group into the development of high-
end residential apartments.

Under the placement agreement announced by Shining yesterday, Citipoint will
invest $21.75 million through the subscription of 167.3 million new shares in
Shining at 13 cents apiece. A further injection of up to $20 million is expected
through the issue of up to 155.65 million free warrants to Citipoint at an
exercise price of 13 cents a share.

The 167.3 million placement shares will give Citipoint an equity stake of 53.7
per cent. If the warrants are fully exercised, the stake will go up to 69.2 per
cent of the enlarged capital.

The deal is subject to certain conditions to be met by March 31, 2008. They
include: a whitewash waiver to exempt Nico Po from a general offer; the approval
of the Singapore Exchange; a requirement for Shining to maintain a net tangible
asset of $12 million by Dec 31, 2007; and the approval by Shining shareholders.

In a statement, Nico Po said: ‘I am excited by the prospects of securing a
majority stake in Shining Corporation Ltd.’

He added that with the enlarged capital base and access to the
GoldenFlowerGroup’s real estate expertise, he hoped the company would be able to
leverage its potential to be a high-end residential property developer.

Tan Kay Kiang, Shining Corporation’s chairman added: ‘The Singapore property and
construction market has seen considerable growth in recent years.’

He added that the company has increasingly felt the need to have an increased
market capitalisation and larger financial resources for growth in this market.

In view of the new thrust, certain business divisions of Shining will be
divested.

Source : Business Times – 11 Sept 2007

August 9, 2007

Bintan Resorts launches new IR development site at Lagoi Bay

Filed under: Indonesia — Propertymarketupdates @ 5:22 pm

BINTAN Resorts has launched a new integrated resort (IR) development site at Lagoi Bay, spread over roughly 1,300 hectares. The 130 land parcels there, ranging from 2000 sq m to 30 hectares, will allow for resort, residential and commercial investment purposes.

According to the developers, visitor arrival to Bintan island is expected to treble to reach one million by 2012, which they say increases the potential for investors to generate significant returns.

Tourism projects in Singapore such as the Gardens on the Bay as well as the two integrated resorts are also expected to boost tourism flow into Bintan due to its close proximity to Singapore.

‘Bintan is well-positioned to tap the more than nine million leisure and business visitors who come to Singapore annually,’ said Chin Chow Yoon, vice-president-director of PT Bintan Resort Cakrawala, developers of Lagoi Bay.

‘This number is expected to reach 17 million by 2015.’

Bintan Resorts is the result of a joint agreement signed by the Singapore and Indonesian governments in 1990, aimed at developing the northern part of the island into a key tourist attraction.

Currently, travelling time from Singapore to Bintan is 55 minutes, a period which the developers are looking to reduce considerably with the planned upgrading of the ferry and terminal amenities.

The construction of a private tourist airport is also in the pipeline, which is primarily aimed at increasing the number of Indonesians visiting Bintan Resorts. More than $150 million has already been spent on providing the infrastructure necessary for the Lagoi bay development.

PT Bintan Resort Cakrawala has also been responsible for developing the rest of the Bintan Resorts area, which covers more than 17,500 hectares. The company has extensive experience in resort development, operations, infrastructure development and management.

It is also a subsidiary of the Singapore-listed firm, Gallant Venture.

Mr Chin also said that there already has been a high level of interest in Lagoi Bay from potential investors from Singapore as well as the Middle East, with almost 25 per cent of saleable land available already being reserved.

Source: Business Times, 04 Aug 2007

July 31, 2007

Tobacco tycoons lead list of Indonesia’s rich

Filed under: Indonesia — Propertymarketupdates @ 7:07 pm

By Azhar Ghani, Indonesia Bureau Chief

JAKARTA – TYCOONS who built their fortunes on the tobacco industry headed Indonesia’s latest rich list, claiming the top two positions.

Topping the list of 150 wealthiest Indonesians, compiled by Indonesian business monthly GlobeAsia, was the family behind the Djarum Group.

Headed by 66-year-old Budi Hartono, its fortune was put at US$4.2 billion (S$6.32 billion).

While Djarum is the third- largest clove-cigarette producer in Indonesia, the Hartonos’ ascent came on the back of gains unrelated to the tobacco business.

The family officially controls 46 per cent of Indonesia’s largest private bank, Bank Central Asia (BCA).

Its initial investment of US$500 million in 2002 has grown to US$3 billion this month – riding a 70 per cent rise in BCA’s share price over the past 11/2 years.

The Hartonos dethroned the family of the man who topped the country’s rich list last year – paper and pulp tycoon Sukanto Tanoto.

Last year’s list was compiled by Forbes, but GlobeAsia said its list is similar, as the same criteria and methods of data compilation were used.

Also, the team behind Forbes’ list did the GlobeAsia rankings this year.

Mr Sukanto Tanoto, 57, the founder and chief executive of industrial group RGM International, a US$6 billion company headquartered in Singapore, is now at No.6. His family’s fortune is listed as US$1.3 billion, down from last year’s Forbes figure of US$2.8 billion.

Moving up two places from No.4 last year on GlobeAsia’s list is the family of Mr Rachman Halim, 60. He heads Gudang Garam, one of Indonesia’s leading cigarette companies and among the largest listed companies on the Jakarta bourse. The family is worth US$3.5 billion.

Mr Eka Tjipta Widjaja and family, at US$3.1 billion, is in third place – the same position they occupied last year.

Mr Widjaja, 84, is the founder and chairman of privately- held Sinar Mas Group, which includes Singapore mainboard- listed Asia Food and Properties. He is also the father of Singapore businessman and investor Oei Hong Leong.

At No.4 is the Salim clan of Indonesia’s largest conglomerate Salim Group, which is worth US$2.8 billion.

Indonesian Vice-President Jusuf Kalla, who came in at No.36 last year, was way down the list this year, at No.83.

Source: The Straits Times, 31 July 2007

June 30, 2007

Indonesian, Malaysian firms to jointly list Reit on SGX

Filed under: Indonesia,Malaysia,REIT — Propertymarketupdates @ 1:54 am

Indonesian property developer Gapura Prima group has teamed up with a Malaysian partner in plans to launch a real estate investment trust (Reit) on the Singapore Exchange by the end of the year.

Starting with a US$250 million portfolio of five malls in Indonesia and another two in Malaysia, it will eventually also look into properties in other Asean countries like the Philippines, Singapore, Thailand and Vietnam.

To be administered by a joint venture between Gapura Prima and Malaysian trustee company Amanah Raya Bhd, the new offering joins a growing number of foreign-based Reits listed in Singapore.

The project was announced at a memorandum of understanding (MOU) signed on Monday between the two companies, during a Jakarta meeting organised to boost economic partnership between Indonesia and Malaysia. The event included a meeting between Mr Boediono, Indonesian Coordinating Minister for the Economy, and Malaysian Minister in the Prime Minister’s Office, Effendi Norwawi.

It concluded on Tuesday with the two countries agreeing to intensify cooperation in five sectors – palm oil, Islamic finance, halal products, tourism and the micro, small and medium enterprises sectors.

A joint council will be set up to explore collaborations in these sectors. It will also act as a facilitator for private companies wishing to do business across the two countries.

Mr Effendi said: “Basically, we are going to sound out all areas where we can work today, and we will share our competitive advantages. Together, we can become very strong players in many sectors – including the CPO, halal industry and Islamic finance sectors – on the global market.”

Malaysian investments in Indonesia have swelled rapidly in recent years. Last year, Malaysia’s capital outflows to Indonesia tripled to US$2.2 billion.

Mr Boediono and Mr Effendi witnessed the signing of the MOU between Gapura Prima and Amanah Raya, as well as another MOU between the two companies and one of the largest state-owned contractors, PT Pembangunan Perumahan, for the purchase of East Point Shopping Mall Surabaya to be included in the Reit.

The other Indonesian malls in the Reit are in Jakarta, Bandung and Solo, plus malls in Malaysia’s Klang Valley and Malacca.

Gapura Prima started out as a residential developer, and is a relatively new player in commercial property. So far, its commercial projects have tended to be mixed developments combining residential (condominium) and some retail units, rather than pure shopping malls.

It has three such mixed developments in Jakarta, located in Serpong (West Jakarta), Permata Hijau (South Jakarta) and another in Mega Kuningan (central business district), as well as a fourth in Bandung.

Source: The Business Times, 21 June 2007

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