Indonesia has experienced strong economic growth along with increased urbanisation. And on the other hand, the growing middle-class population and business expansion outside the city centre are driving strong demand for quality property. Indonesia’s economic growth is seen as very attractive for foreign investors to develop their property business. A number of foreign development companies from neighbouring countries such as Malaysia, Singapore, Japan, and even Australia have developed their business presence in several cities in Indonesia. The target market segments also vary from the premium segment to the lower middle-class.
In order not to be left behind by China, Singapore-based developers are increasingly aggressive in developing properties in Indonesia. These are not the typical property investments, but prestigious and large-scale investments intended for the upper middle-class, and are worth trillions of rupiah.
One such developer is ZACD Group Ltd, a regulated asset manager registered in Hong Kong (HKEX: 8313) and headquartered in Singapore. Offering integrated solutions throughout the real estate value chain in the Asia Pacific region, ZACD views Indonesia as one of its business developments targets.
As a company engaged in the property industry, ZACD offers business services with integrated real estate solutions across the property and the industrial sectors. Such services include Investments & Asset Management, Acquisitions & Projects Management, Corporate Financial Services and Property & Facilities Management.
At present, ZACD has collaborated with PT Pollux Properti Indonesia Tbk. ZACD’s founder and CEO, Stanley Yeo Choon Guan shared that the company, as at present, has business development investments in 4 countries, namely Singapore, Australia, Malaysia, and China. “We have prepared funds of around $9 billion. For each project, we sometimes set up funds of around 40% to 55% of the value of the cooperation project,” Stanley said.
In addition, Stanley mentioned that ZACD also has a hotel in Australia, The Sebel West Perth Aire Apartments, as well as several projects such as boarding houses located close to the industrial estate in Johor Bahru, Malaysia, covering an area of 29 hectares, and several factories spanning an area of about 6,000 square metres.
Broadly speaking, investments in Indonesia focus a lot on the development sector, one of which is property. This is also the case in China, Australia, Malaysia, Bangkok, the Philippines, Singapore and India, where prices have grown since 15 years ago. Meanwhile, in Jakarta alone, the increase in property prices has been less than 25% for the past 15 years.
“This has huge potential, especially since Jakarta is the nation’s capital,” Stanley said.
On the other hand, Indonesia has so much on-going infrastructure development. The existing MRT and the on-going construction of the LRT represents Indonesian’s desire for modern transportation, especially in Jakarta and other big cities.
These developments are also indicative of the current administration’s competency in realising the infrastructure of the public transport system.
“This infrastructure shows the strength and commitment of the Indonesian government and their willingness to give more support in developments in the property industry,” he said, adding “this very much boosts our confidence as investors”.
This is especially so at a time where many investors from China and South Asia have entered Indonesia and are building up factories, thereby providing broad employment opportunities for the local communities, and also to encourage the growth of the economy.
“It is then no surprise that Indonesia has now become a destination for investments with continuously increasing economic growth. This is what excites me in wanting to expand into Indonesia, “he explained.
TO CREATE PROFITABLE INVESTMENT VALUE TOGETHER WITH DEVELOPMENT PARTNERS
ZACD Group Ltd was founded in 2005 as an investment company to develop and invest in the property sector. Through its in-depth knowledge of the industrial sector and multilevel housing, ZACD is much sought after by developers and construction companies in Singapore to collaborate in developing large-scale property projects.
The massive infrastructure development initiated by the government at this time makes the property industry in Indonesia increasingly attractive to foreign investors. For the Singapore-based investment company, ZACD Group Ltd is no exception, evident from their keen interest to expand its business in Indonesia.
To know what makes ZACD interested in investing in property in Indonesia, here is an excerpt from an interview with Stanley Yeo Choon Guan, Founder and CEO of ZACD Group Ltd, with the CEO and Editor in Chief of Properti&Bank Magazine, Indra Utama:
Can you share with us more about ZACD?
Investing in the property sector is not easy since many of such opportunities must be thoroughly evaluated and calculated in this business. To this end, I am determined to become a leading real estate developer and investment management company in the Asia Pacific, by providing world-class investment opportunities and better property consulting services. Our vision is to build success with our partners to achieve even more meaningful success.
What are the main platforms of ZACD’s business?
Our two most important platforms are (a) our network of investors who need reliable, credible, investment products and (b) our partners who develop properties that provide high profits. Many developers want to partner us because, in addition to investing, we also provide professional solutions and the latest innovations through our expertise and resources. Our focus is on creating meaningful added value to our partners. This will allow our partners to make the most suitable, appropriate decisions in order to achieve higher sales and other optimal results from the development projects. This is done through an active management philosophy and a disciplined development process. What distinguishes ZACD from other investment companies is the unique convergence of our capital market expertise and real estate experience.
What kind of investments does ZACD put into a project?
So far, we have adopted a co-operation approach by providing investments at 40% to 55% of the project value. Our management funds are very large, allowing us to provide many types of investments.
To date, how many projects has ZACD developed?
Currently, we have built dozens of projects with a total gross development value of more than 100 trillion rupiah, including Jadescape (SG), The Sebel West Perth Aire Apartments (AU), Tebrau – Johor Workers Dormitory (MY), Landmark Tower Residential (SG), iSelect Office Building Commercial (SG), Le Quest (SG)) mixed residential cum commercial project, Choa Chu Kang Avenue 5 (SG), and several other projects across various countries in the Asia Pacific region.
In which countries have ZACD focused on for business investments?
We have office presence in Malaysia, Singapore, China, Bangkok, the Philippines, and we also own hotels in Australia.
What is the reason for ZACD to develop its business in Indonesia?
As in Singapore, Malaysia, China, Australia and other Asia Pacific countries, we see Indonesia has, in the last 15 years, experienced rapid economic growth and a continuously growing middle-class population from year to year. This is definitely an attractive market with much potential. Moreover, in the last 4 years we have been seeing exuberant demand for properties in Jakarta. Compared to Malaysia and Thailand, Indonesia’s growth is arguably one of the most attractive.
What else do you see beyond the development potential of Indonesia?
In the last 15 years, I have witnessed a very significant change in Indonesia’s development – the government has been very focused on infrastructure development which serves as a testament to their capabilities. Take for example, the efficient construction of the MRT and LRT is one of the reasons why I see great potential in Indonesia. I believe infrastructure development is very positive for property investors, especially the foreign investors.
Why did you choose to work with Pollux Properti Indonesia Tbk?
As we know, it is not easy to carry out property development projects in Jakarta. We look for partners who have the same integrity and the same work ethics as us. We see that Pollux Group has a very good track record in both Singapore and Indonesia. All projects in Singapore were ‘sold out’ and in Indonesia, they have human resources and management of international standards.
Thus, we chose Pollux Group to invest and to grow together. As a public company, Pollux Properti Indonesia Tbk has a market capitalisation of more than 15 trillion rupiah. Dr. Nico Po, CEO of Pollux Group, understands Singapore’s work standards because he is a graduate of the National University of Singapore, and is familiar with Singapore-style standards of transparency and discipline.
Pollux also has large projects of international standards, and is a very credible partner to work with.
How would you describe your collaboration with Pollux?
We have a very transparent collaboration with Pollux, and an open communication in terms of investment value. For that purpose, with Pollux, we try to explore and evaluate other big cities as well. Our current collaboration with Pollux is of timely opportune. Our funds are very large and we endeavor to make quick and accurate investments. Dr. Nico Po is very prudent on investment matters, a trait we really like and appreciate.
Thank you for sharing.