Opus Bay township builds on new vision for Batam
By Timothy Tay
/ EdgeProp Singapore |
Opus Bay is a new master-planned township project by mainboard-listed Tuan Sing Holdings. It is billed as the first fully integrated township in Batam. (Picture: Samuel Isaac Chua/The Edge Singapore)
SINGAPORE (EDGEPROP) - For decades, Batam has been a convenient leisure destination for Singaporeans who flock to the island for regular weekend trips to partake in its affordable shopping, food and accommodation.
But this is set to change in the coming years as the Indonesian government works to promote Batam’s economic credentials and transform the island into a key trading hub of the country.
Batam’s tourism-reliant economy will be turned into a regional manufacturing hub over the next few years. This bodes well for its residential real estate market and will benefit early investors capitalising on the transformational growth cycle.
Batam Special Economic Zone
Batam is one of the major islands in Indonesia’s Riau Island Archipelago, which also comprises Bintan and Karimun. Batam is just 20km away from Singapore and 45 minutes away by ferry. According to the Indonesian tourism ministry, Singaporeans and Malaysians make up half of Batam’s international tourists, while other international visitors are mainly from China, South Korea and Vietnam.
Five ferry terminals serve Batam and two are privately owned, one of these private ferry terminals will be located at Opus Bay, a township development by Tuan Sing Holdings. Pictured is a model of the refurbished ferry terminal. (Picture: Samuel Isaac Chua/The Edge Singapore)
Batam, Bintan and Karimun (BBK) have been a free trade zone since 2009, and are exempted from some import duties, sales taxes and customs duties. In 2021, the Indonesian government approved of two new special economic zones (SEZs) in north-east Batam — the Nongsa Digital Park and the Batam Aero Technic SEZ.
The Indonesian government also plans to boost infrastructure in Batam and Bintan with the construction of a 7km bridge to link the two islands.
According to a market report by UOB, the BBK manufacturing economy already houses factories producing goods from computer chips to precast concrete. Companies in Batam benefit from market access to Indonesia, while enjoying proximity to Singapore, a global supply chain node.
Singapore companies are the top investors in Batam, contributing about 42% of the foreign direct investment, says the Badan Pengusahaan Batam, the local investment and development authority. Other foreign direct investments are from Hong Kong, Malaysia, Australia, France and Switzerland, among other places.
Property ownership in Indonesia
Batam’s residential property market displayed an unexpected resilience throughout the Covid-19 pandemic, even as tourism numbers fell due to international travel restrictions. Prices have continued to hold steady this year even amid inflationary concerns.
According to Bank Indonesia, the country’s central bank, average property prices in Indonesia fell by 0.2% for the whole of 2021, and residential prices rose slightly by 0.1% q-o-q in the first quarter of this year.
In 4Q2021, residential property prices in Batam remained unchanged, recording a marginal increase of 0.08% q-o-q and a similarly slim uptick of 0.07% y-o-y. In comparison, prices in Denpasar, Bali, increased 1.14% q-o-q and 0.39% y-o-y during the same quarter, while those in Surabaya rose 1.59% q-o-q and 0.17% y-o-y.
Property prices aside, Indonesia’s ownership laws for foreigners owning property in the country and the multiple types of titles available for foreign ownership can be daunting for first-time investors.
Different land titles govern property ownership in Indonesia, and they usually come with onerous requirements for first-time investors. (Picture: Pixabay)
Indonesia’s freehold tenure equivalent is known as the Hak Milik title. This may only be held by Indonesian citizens and certain Indonesian entities, but is not available for foreign ownership.
There are two main types of leasehold titles — the Hak Guna Bangunam (HGB), which is the right-to-build title; and the Hak Pakai (HP), which is the right-to-use title. The maximum term for these titles is 30 years with a 20-year extension option and a subsequent 30-year extension after that.
Foreign ownership is available for strata-title apartments in a building that sits on land with either a HP or HGB title, but owners of the apartment units are issued certificates of titles which are separate from the HP or HGB titles on the land.
Foreigners in Indonesia are allowed to own landed property that is under the HP title, while landed houses under the HGB title are not available for foreign ownership.
On the other hand, apartment units can be owned by foreigners if the building is situated in a SEZ, a free trade or free port zone, or other designated economic zone.
Ten-year plan for Opus Bay
Due to the typically onerous requirements for foreigners to own property in Indonesia, most first-time buyers and even experienced investors have turned to established and trusted developers to ensure they are investing in a safe asset.
In Batam, few private developers are committed to the growth of the area than Singapore mainboard-listed property developer Tuan Sing Holdings, which has set its sights on a decade-long master-planned township development called Opus Bay.
A model of one of the villas available at Opus Bay. A collection of villas will be available, and owners have the option to amalgamate neighbouring plots. (Picture: Samuel Isaac Chua/The Edge Singapore)
This 125ha fully integrated township project is the developer’s first foray into the Indonesian market. Tuan Sing is working with US-based architectural firm Kohn Pederson Fox Associates, which is internationally recognised for its expertise in large-scale masterplan projects.
The entire project will be completed in phases over the next few years, and will comprise residences, meeting and exhibition facilities, hotels, tourist attractions, as well as recreation and leisure amenities. Future development plans include educational and medical facilities.
Tuan Sing is working with leading Indonesian retailer Mitra Adiperkasa to curate the retail offerings at Opus Bay, and there are plans to launch other international lifestyle brands and F&B offerings.
One of the key components of Opus Bay will be a privately owned ferry terminal managed by the developer. This dedicated ferry terminal will serve the residents and visitors of Opus Bay and provide convenient accessibility between Singapore and the township.
The ferry terminal will be one of the buildings that will be completed as part of the first development phase, which includes three beachfront apartment towers, a collection of private villas, a shopping galleria and a residents’ beachfront clubhouse.
Opus Bay will open with retail and entertainment amentities for residents and visitors, with subsequent phases adding more to enhance the overall liveability of the township project. (Picture: Samuel Isaac Chua/The Edge Singapore)
The first residential sales phase was launched in April last year and the apartments consist of studios and two-bedroom units of 387 to 1,313 sq ft, while villas range from 2,583 to 8,288 sq ft.
The apartments are designed by homegrown architectural firm RT&Q, while the villas are designed by local architectural firm Ong&Ong, which also has a hand in designing the clubhouse.
According to the developer, building up Opus Bay into a self-sustaining tourism and lifestyle township for residents and visitors is a key part of the decade-long masterplan and a signal to property owners of its long-term commitment to the project.
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