The lure of the seven-year guarantee: Citadines Berawa Beach Bali

/ EdgeProp Singapore |
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Singaporeans Darren Chua and Remy Ng, co-founders of the Jakarta-based property development company Genesis Indojaya, previewed their maiden hospitality project in Bali, Citadines Berawa Beach, on March 9-10. The duo subsequently held a weekend launch in Singapore on April 6-7 at Marriott Tang Plaza.
The developer released an initial phase of 150 units within the property, which contains a total of 226 serviced residences ranging from studios to one- and two-bedroom suites.
Located on a 17,800 sq m (192,000 sq ft) site at Berawa Beach, in the up-and-coming coastal village of Canggu, the project is scheduled to be completed by end-2020. It will be managed by Ascott Ltd, the hospitality arm of Singapore-listed property group Capitaland for 10 years, with the option of another 10 years.
At the Marriott Tang Plaza, the weekend show drew over 100 attendees. To date, 25 units have been sold (Credit: Genesis Indojaya)
The developer is offering investors is a guaranteed rental return (GRR) of 5% for seven years, with no lock-in period, and also absorbing the withholding tax of 10% on the GRR of 5% for the entire seven-year period.
The weekend show in Singapore drew over 100 attendees. To date, 25 units have been sold. For now, the developer has been inundated by enquiries from overseas.
“One of the main reasons for us to start the sales campaign in Singapore is Remy’s and my familiarity with Singapore,” says Darren Chua, equity adviser at Genesis Indojaya.
The partners intend to showcase the project in key markets around the region, including China, Hong Kong, and Taiwan, from May to July. “Of course, Indonesia will also be one of our target markets,” says Remy Ng, managing director of Genesis Indojaya who is based in Jakarta.

Wide spectrum of buyers

Buyers in Singapore come from a wide spectrum, from a senior risk management professional seeking “stable, long-term yield” and a design director with an international architectural firm who liked the design of the project, to a homemaker who wanted to invest so she and her family could visit Bali regularly for holidays.
All except two of the 25 units were sold in Singapore. The remaining two units were scooped up by a French buyer who was holidaying in Bali when he wandered into their site office. The name Citadines “struck a chord” with the French buyer, recounts Chua.
The location in Canggu and on the beachfront has proven to be a lure for buyers. “Singaporeans are familiar with Bali – with places like Nusa Dua, Kuta and Seminyak, which are very close to our project,” says Chua.
Talking to the attendees at the weekend roadshow in Singapore helped establish a bond between the developer and their prospective buyers. They were able to share the reasons they ventured into Bali and invested in a hospitality project. “Singaporeans have a healthy appetite for overseas property investment, and a hospitality investment play in Bali appeals to many potential investors,” he notes.

Full payment, 5% return

The developer is offering three payment schemes: full payment with a 15% discount; progressive payment with a 10% discount; and a seven-year payment scheme with a 5% discount.
“Thus far, the most popular scheme is the full-cash payment scheme, where the investor pays the full quantum within a few months of signing the definitive agreements with us,” says Ng. “We believe this is because of the relatively bite-sized investment quantum and comfort that they have after meeting and speaking with us.”
Chua agrees. The studio suites at Citadines Berawa Beach start from $230,000, the equivalent of just the downpayment for a condo in Singapore or some properties in the more mature markets, he points out.
Most of the buyers were also convinced by the seven-year guarantee period for the GRR. “The typical GRR periods offered by many sellers in the market are in the range of two to three years,” says Ng. “However, we believe in long-term stability and, most importantly, we have full confidence in our property and our operator. This speaks volumes to an investor seeking long-term, stable, passive income.”
At 5% nett per annum, the rate of return is “compelling”, he adds. “This is not a marketing gimmick, nor have we ‘priced in’ the guaranteed return.”

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