Home News Property

Singapore has a better Bali on its doorstep, developer says

Bloomberg
Bloomberg2/22/2019 11:09 AM GMT+08  • 3 min read
Singapore has a better Bali on its doorstep, developer says
SINGAPORE (Feb 22): Singapore’s second-largest developer has a suggestion for the government: re-position the billionaire enclave of Sentosa as a tourism mecca like Bali.
Font Resizer
Share to WhatsappShare to FacebookShare to LinkedInMore Share
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

SINGAPORE (Feb 22): 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% 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% since 2011 for international buyers compared with just 3% 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.

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 $469 million, Blackstone and CIMB agreed to receive 5% fixed interest for five years, and a share of the project’s cash flows.

City Developments said Thursday the group is “working with its partners on a mutually favorable way to unwind the structure before its expiry in December 2019.” With many units in the residential part of the project still unsold, City Developments needs demand, and prices, to revive.

A spokesperson for Blackstone declined to comment.

While Sentosa and Bali both share a tropical climate, luxury hotels and restaurants and a waterslide park, there the similarities end. Sentosa, at about 5 square kilometers, is a fraction the size of Bali, which boasts a lush mountainous hinterland, renowned surf beaches and world-class diving. On Sentosa, the beaches are all man-made and it’s hard to escape the scores of container ships parked offshore.

Still, Kwek said the non-residential part of Sentosa could be better utilized for meetings and conferences. The island’s hotels meanwhile -- and there are several new ones opening -- could attract more visitors.

“You go to Bali now, it’s very congested. It’s got volcanoes, weather problems, flooding problems and traffic problems. Why is it so popular?” Kwek said.

Read also:

×
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
Subscribe to The Edge Singapore
Get credible investing ideas from our in-depth stock analysis, interviews with key executives, corporate movements coverage and their impact on the market.
© 2022 The Edge Publishing Pte Ltd. All rights reserved.