Singapore Has a Better Bali on Its Doorstep, Developer Says

By Pooja Thakur Mahrotri / Bloomberg | February 25, 2019 12:41 PM SGT
Luxury property developments at Sentosa Cove. Photographer: Nicky Loh/Bloomberg
Singapore’s second-largest developer has a suggestion for the government: re-position the billionaire enclave of Sentosa as a tourism mecca like Bali.
Property values at Sentosa Cove, a residential area nestled on a tiny island off the south coast, have been hit particularly hard, with home prices down about 30 percent from the highs seen in 2010. Even as the rest of the nation’s residential market staged a recovery in the first half of last year, Sentosa remained stubbornly in the doldrums.
City Developments Ltd. Executive Chairman Kwek Leng Beng has had enough.
“Sentosa was touted when it first started for the rich and famous,” Kwek said Thursday at the release of the company’s fourth-quarter earnings. “Subsequently, her parents just forgot about this young lady. I would like to suggest that they should re-position it as the new Bali.”
What was previously Sentosa Cove’s main strength has become a liability.
The island is the only place in Singapore where foreigners can buy landed property. But with stamp duties doubling to 20 percent since 2011 for international buyers compared with just 3 percent for locals, the waterfront oasis is suffering. Multimillion-dollar homes sit empty, and along Quayside Isle, a stretch of restaurants near the marina, businesses have been shutting shop.

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City Developments has been aiming for geographical diversification. Now, only about half of its annual S$4.2 billion in revenue comes from the city-state
City Developments has good reason to want Sentosa to succeed.
In 2014, it struck a deal with Blackstone Group LP and CIMB Bank Bhd. to raise additional capital from a hotel, retail and residential project it had developed earlier. In exchange for S$469 million ($347 million), Blackstone and CIMB agreed to receive 5 percent fixed interest for five years, and a share of the project’s cash flows.
Sentosa Island in Singapore. Photographer: Darren Soh/Bloomberg