Crown Group's Indonesia business looking into Singapore listing

Singapore

CROWN Group is considering listing its fledging Indonesia business on the Singapore bourse as the privately-held Australian property group bets big on South-east Asia's largest economy, its co-founder and chief executive officer Iwan Sunito told The Business Times.

A listing of its Australian operations also on the local bourse could be on the cards in the future, but the group is "waiting for the right time" to do so.

Mr Sunito said that Singapore is an ideal place to list the Indonesia business due to its easy access to capital sources for both its development investment projects and end-buyers' home purchases.

But "we need to establish significant and worthwhile projects first, and a wide range of products for the long-term stability of the company", he said.

The company announced in May its first development project in Indonesia: a tie-up with a local company PT Pembangunan Jaya Ancol for an A$700 million (S$708 million), 4.7 ha seafront apartment complex in north Jakarta.

The goal for the Indonesian business now is to create A$3-4 billion worth of pipeline projects that will contribute A$600-800 million profit for Crown Group.

It has invested in another land parcel in Jakarta, and is currently in talks with other landowners for other projects.

"Landowners are looking for transparent international companies, and we benefit as it's capital light for us," Mr Sunito said.

He is confident of demand for his middle- to upper-market products, given Indonesia's booming economy and huge market size.

Crown, which was co-founded by Mr Sunito and Paul Sathio and launched its first project in 1996, has mostly focused on developing middle to upper-market high-rise projects in the Central Business District (CBD) areas of Australia.

Mr Sunito believes the urban density in cities like Jakarta could boost demand in his high-rise developments.

"In a city like Melbourne where it will take 20 minutes to get home, high-rise will always be under pressure but in Jakarta, you want to be in the city because you want to get home," he said, referring to the city's notorious traffic jams.

In Australia, its projects include the A$250 million Arc by Crown Group which will be completed in September this year and the A$395 million Waterfall by Crown Group in Waterloo which will be completed in 2020.

It launched its first Skye Hotel Suites in Parramatta in August 2017, with a second hotel to open in Sydney's CBD in mid-2018.

In June, Crown Group launched the first phase of residential sales at the A$1 billion Eastlakes Live. Located at Sydney's Eastern suburbs, it will feature 400 luxury homes and a new town centre with outdoor spaces and shopping and dining venues.

While it did not reveal its sales figure, the buyers' breakdown by nationality was 83 per cent Australian, 11 per cent Chinese and 6 per cent Indonesian.

Often priced in the "million-dollar range", Crown's products usually attract 60-70 per cent of local buyers with the balance made up of foreign buyers including those studying in Australia and investors.

Mr Sunito said that Chinese and Indonesians are the top buyers among their overseas clientele, while Singapore buyers have consistently been the third-largest foreign source of buyers for Crown, with A$30 million of the AS$800 million in total sales settled last year coming from Singapore.

Mr Sunito said that cooling measures for foreign buyers in Australia, such as a new capital gains tax of 12.5 per cent for properties worth more than A$750,000 for foreigners that kicked in in July 2017, have not deterred foreign buyers to date.

"If you're targeting less affluent buyers, it would be challenging to get access to funds to buy," he said. But Crown Group buyers are often high-net-worth individuals who have access to private bank funding in their home countries, he noted.

In fact, he sees more Asian millennial affluent buyers snapping up his properties without even flying to Australia to view the place in person. "It's a reflection of their capacity to invest," he said.

Cambodia is an emerging source of buyers, as well as wealthy Hong Kongers seeking a second investment and still finding it cheaper to buy in Australia compared with the red-hot market at home.

Meanwhile, Crown Group is venturing into Los Angeles, with its large population of international students and what Mr Sunito calls an emerging downtown.

Crown has secured a site in downtown LA, and is in the process of getting development approval for the site which could yield 400 condominium units, retail and amenities such as a skypark.

"There's an emerging younger generation who no longer wants to live in Beverly Hills," he said. "We see great potential in LA, and there is a shortage of supply of quality apartments with a resort-style amenities in this area."