Buying a slice of ‘haven’ in Bintan

/ EdgeProp
September 23, 2018 12:00 PM SGT

Property developer Peter Chan of The Haven Lagoi Bay, Bintan, believes the resort property offers an alternative investment and second home option for Singaporeans'

Peter Chan, CEO of The Haven Group, has a lot riding on his upcoming project in Bintan, Indonesia called The Haven Lagoi Bay. Sitting on a 60- acre (24.3ha) site, the project is estimated to have a gross development value of $1.4 billion when it is fully developed. It is Chan’s biggest project so far and also his first venture into Indonesia.
He was first shown the site for the Bintan Resort in 2012 by representatives from Salim Group, a stakeholder in Gallant Venture, a Singapore-listed investment company involved in commercial development and an integrated and master planner of industrial parks and resorts in Indonesia’s Batam and Bintan. Gallant Venture’s other stakeholder is Sembcorp Industries.
Chan: I found the site very alluring.It is pristine, with seafront, lakefront and riverfront views and the price was reasonable (Credit: Samuel Isaac Chua/EdgeProp Singapore)
“I found the site very alluring,” Chan recounts. “It is pristine, with seafront, lakefront and riverfront views and the price was reasonable.” Another attraction of the site was the proximity of Bintan to Singapore, which is just an hour’s ferry ride away.
Chan acquired the site at Lagoi Bay in 2013. Three years of planning followed thereafter, with DP Architects as the design architect. This June, Chan awarded a $288 million construction contract to China’s Yunnan Construction Investment Holding Group and Indonesia’s PT Total Bangun Persada, with the signing ceremony held at the Singapore Marriott Tang Plaza Hotel. The contract involves building six towers of condominium suites, a 250-room fivestar hotel and a convention centre with a capacity of 3,000. The development will be built in four phases.

First phase of two towers

The first phase will comprise two 26-storey towers with 278 condo suites each. The units are a mix of studio units and one- to three-bedroom typical units as well as executive units. Sizes range from 492 to 2,636 sq ft. Buyers will have either a lakefront or seafront view.
In addition to the two condo towers, the first phase of the development will include a 48,000 sq ft clubhouse with a massage spa, restaurants, a ballroom and children’s facilities. Chan also intends to build an 800m boardwalk along the riverfront for people to appreciate the mangrove forest.
Chan is building six towers of condominium suites, a 250-room fivestar hotel and a convention centre with a capacity of 3,000. The development will be built in four phase (Credit: The Haven Lagoi Bay)

He will launch the first phase of units at $700 psf, which means a starting price of $344,400 for the smallest studio unit. “We call them hotel suites,” he says. “We are offering five-star, fully furnished hotel suites at condo prices.”
The hotel suites at The Haven Lagoi Bay will be sold to foreign buyers on a strata-titled basis with a 30+20+30- year lease, which Chan says “can be renewed for perpetuity”. This is because in 2016, the Indonesian government relaxed its rules on property ownership for foreign residents. They can now purchase strata-titled apartment or condo units on a 30- year lease, with a 20-year extension and renewable for another 30 years.
Indonesian banks may not provide mortgages to foreign property buyers currently. However, high net worth individuals are still able to get financing from their banks, says Chan. For now, payments will be made progressively, according to the stage of construction completion, he adds.
View of Lagoi Bay and the South China Sea from The Haven site (Credit: The Haven Lagoi Bay, Bintan)

Rental guaranteed

Chan is offering purchasers a 10- year rental guarantee with a 6% annual return: a 4% net return and 2% to be paid in the form of vouchers that can be used within the resort — for accommodation, car rental, spa or F&B. The vouchers are transferable, he says. “This will encourage the buyers to enjoy the resort even as they earn a return,” he points out.
The assurance Chan gives buyers is that The Haven Group is both the developer and the hotel operator of the resort at Lagoi Bay. “Many developers offer a rental guarantee scheme for three years, but they don’t manage the rental units,” he says. “We are operating the units ourselves.”
Last year, it was reported in The Straits Times that at least 69 investors had paid between $140,000 and $500,000 for a unit in The Heritage condo-hotel project at Lagoi Bay in Bintan. The buyers were promised returns of 9% and told that they could sell the unit back to the developer if they wished. But the developer, PT Stareast Sejahtera, failed to complete the project. In June last year, the owners filed a report with the police in Medan, Indonesia, against Stareast.
Chan is well aware of the troubles in the neighbouring project at Lagoi Bay. “This is where we are different,” he says. While his site at Lagoi Bay is 60 acres, he is only undertaking the development of the first phase of four acres for now. He has invested $50 million in the first phase of the project. “The land has been fully paid for, and we have secured construction finance,” says Chan. He has even completed an 18,000 sq ft show gallery on the site and has started holding private previews. Chan is targeting to launch the first phase in 1H2019, with completion scheduled for 2021. “I don’t want to launch until I get everything right,” he says.
Chan intends to build an 800m boardwalk for guests to appreciate the mangrove forest (Credit: The Haven Lagoi Bay, Bintan)

‘Steep learning curve’

Chan’s first foray as an individual developer was 15 years ago, when he took over a development site in Ipoh, Malaysia. The project was initially greeted with scepticism. “It was a steep learning curve, but I learnt my lesson there,” he says. “It’s always very difficult to do business overseas, where the laws are different, the political climate is different. It’s always easier to develop in your own country.”
Born in Hill Street, Chan grew up in Singapore. After completing National Service, he received an Esso Scholarship to study at the National University of Singapore in 1967. A global nomad, he has had more than two decades’ experience working overseas — in New York, London, Hong Kong and China. In Australia, he was managing director of Consolidated Equity and Finance Ltd from 1986 to 1989, when he was based in Sydney and oversaw commercial developments.
An Australian citizen today, Chan first moved to Malaysia in 2000 as CEO of NV Multi Corp Bhd. After a two-year stint, he decided to strike out on his own as an entrepreneur. In 2003, he was asked to go to Ipoh to help out a developer who had a site there. Chan developed the site in Tambun into Permai Lake View Apartments, a low-cost housing project with nine blocks of 576 apartments.
The four-acre lake at The Haven Resort Hotel, Ipoh, which was completed five years ago (Credit: The Haven, Ipoh)
When the units at Permai Lake View Apartments were first launched in 2003, two-bedroom units of 732 sq ft were priced at the equivalent of $19,000 each. Prices have more than doubled since then. “It’s the nicest low-cost housing project in Malaysia,” says Chan.
His second project, called Subang Galaxy, was a landed housing development comprising linked terraced houses in Subang 2, Selangor.

The Haven in Ipoh

Chan’s third project is The Haven Resort Hotel, Ipoh. Located near his first development, Permai Lake View Apartments, the project in Tambun, Ipoh has three 26-storey towers with a total of 489 units on a 10-acre site. The site is surrounded by limestone hills and overlooks a four-acre lake. The RM350 million project is 90% sold and was completed five years ago.
When units at The Haven Resort Hotel were launched for sale in 2010, they were priced at around RM300 psf. They are now selling in the secondary market at RM650 to RM700 psf, says Chan.
Buyers of units at the development were offered a five-year rental guarantee of 6% per annum. The rental guarantee period for those who purchased units earlier has matured, while that of other purchasers is maturing within the next three to five months. According to Chan, many are renewing at 7% per annum for an additional five years.
The Haven Group is a subsidiary of Chan’s holding company Superboom Projects. The latter was the name of the development company he inherited when he took over the site to develop Permai Lake Apartments. “I wanted to change the name, but never had the time,” he says.
However, given the success of his three projects in Malaysia that have seen prices more than double since their launch, Chan is quite happy to leave the name of his holding company as Superboom Projects. “We have been booming since,” he says.
Owners were offered a 6% rental guarantee for five years at The Haven Resort Hotel, Ipoh, and upon maturity, they can renew it for an additional five years at 7% return (Credit: The Haven, Ipoh)

Waiting for a ‘boom’

Chan is hoping that The Haven Lagoi Bay, Bintan will likewise witness a boom. In its neighbourhood are other upmarket resorts such as Banyan Tree, Bintan Lagoon Resort, Club Med and The Sanchaya Bintan.
He believes accessibility is crucial. The success of The Haven in Ipoh was due to its proximity to the capital city of Kuala Lumpur, which is just two hours’ drive away. About 70% of the buyers at the project were Malaysians, with the remainder mainly from Europe, Hong Kong and Singapore.
Likewise, The Haven Lagoi Bay, Bintan is an hour’s ferry ride from Singapore’s Tanah Merah. Chan is looking forward to the completion of the new international airport in Bintan, which is currently being constructed and scheduled to be operational by 2021. The airport will increase Bintan’s accessibility with more frequent international flights. That is why Chan is planning to complete the first phase of The Haven Lagoi Bay in 2021, to dovetail with the opening of the new airport. The fact that more new hotels are coming up at Bintan Resorts shows that it is an established tourist destination, says Chan.
Chan believes The Haven Lagoi Bay will appeal to those living in Singapore, whether as an investment, a vacation home or future retirement property (Credit: The Haven Lagoi Bay, Bintan)
New hotels that have opened or are in the pipeline include Doulos Phos, a refurbishment of a 100-room ship hotel; Four Points by Sheraton; Alila Villas Bintan, Chiva-Som Bintan and Novotel Bintan. Meanwhile, new attractions include Bintan Safari, Rumah Imaji (Imagination House, which features 3D paintings) and “Foodstargram” for photo-taking.
Chan believes The Haven Lagoi Bay will appeal to those living in Singapore, whether as an investment, a vacation home or future retirement property.