A strategic location and great connectivity to three major cities — Singapore, Jakarta, and Kuala Lumpur — has made Batam an alluring destination for MICE (meetings, incentives, conferences and events).
An added incentive for companies and holiday seekers who want more bang for their buck is the currency exchange rate of $1 to IDR9,500. For Singaporeans, Batam is just a 45-minute ferry ride away, either from the ferry terminal at Tanah Merah or HarbourFront Centre.
As such, it is also an ideal weekend destination for those who want to enjoy a day at the spa, manicure/pedicure for a fraction of the price in Singapore, play golf or shop.
Singapore-listed property group Oxley Holdings has big ambitions to drive Batam’s MICE industry. It is developing the 20,000 sq m Oxley Convention City, in a 50:50 joint venture with Indonesian land owner and partner, PT Karya Indo Batam.
The 20,000 sq m Oxley Convention City is slated for completion in 2019
Slated for completion in 2019, Oxley Convention City will have a 1,500 sq m convention centre that can accommodate 1,000 people. The convention centre will be linked to five other towers — a 29-storey office tower, three 32-storey residential towers and a 20-storey hotel.
Mixed-use attraction
There is also a retail podium with a mix of simplex, duplex and triplex units for sale. The Oxley Shoppes comprises 16 retail and entertainment units; The Oxley Collection has 99 shops as well as 15 F&B units. These are also open for sale to investors and business owners. Of the 62 commercial units released for sale, close to 60% have been snapped up, according to an Oxley spokesperson. The commercial units sold range from a simplex of 132 sq ft to a triplex of 3,509 sq ft, with prices starting from $273,000.
Close-up of scale model showing the convention centre on the right
When the units were released for sale, most of the buyers were Indonesian businessmen with operations in Batam. Demand for the 14 prime commercial triplexes was so high that Oxley made it a requirement that those who picked up those units have to buy three residential units as well.
The office tower comprises 320 strata units, which are also for sale. The three residential towers have a total of 1,635 units. Meanwhile, the hotel tower will have 520 rooms and will be managed by Oxley.
New to market
Launched on Dec 9 last year, Oxley Convention City is located in Batam’s financial district at the junction of Jalan Sei Panas and Jalan Raja H Fisabilillah. Banks in the neighbourhood include BNI, CIMB Niaga, OCBC NISP and Bank UOB, and are located in the three- and four-storey shophouses.
Many of the businesses in the financial district want to expand their presence and have purchased commercial units at Oxley Convention Centre, says the Oxley spokesperson.
Since its launch last December, more than 300 of the 624 residential units released have also been taken up. The apartments range in size from 275 sq ft studios to 1,418 sq ft, four-bedroom duplex penthouses, and are priced from $63,000. While the majority of the buyers were local Indonesians, foreigners also purchased the apartments, notes Oxley. “Singaporeans are likely to buy the apartments as holiday homes and also for investment,” notes the spokesperson.
Showflat of a studio apartment
They can also lease out the apartment. Average rents of a typical studio unit in Batam range from $200 to $250 a month. Given that Oxley Convention City is a landmark development and one of the biggest mixed-use complexes of its kind in Batam, Oxley believes buyers of the studio units are likely to enjoy higher-than-average rents, hence yields are expected to be between 8% and 10%.
Showflat of a one-bedroom apartment
Showflat showing the living and dining area of a two-bedroom apartment
In terms of location, Oxley Convention City is just a 10-minute drive from the Batam Centre Ferry Terminal, and a 22-minute drive from Hang Nadim International Airport. Oxley thus foresees that the convention centre will be a magnet for MICE in future.
Big potential
Oxley is optimistic about the outlook for the Batam property market. According to the developer, the Indonesian government is investing in developing the infrastructure on the main island. As the population is just over a million, Batam has a relaxed vibe, and there is very little traffic congestion on its roads. In addition, the government is looking at attracting foreign investment by positioning Batam as a Special Economic Zone as well as to turn it into a desirable tourist location.
Most land parcels in Batam come with a 35-year lease, with the option to renew for 30 years. According to Oxley, buyers of the strata commercial and residential units at Oxley Convention City will therefore be purchasing their units with a 35-year lease and be able to renew it for 30 years by paying a minimal fee.
Having launched the project in Indonesia, Oxley believes it is time to showcase Oxley Convention City in Singapore. The project will be previewed on May 5 at Palais Renaissance.
This article appeared in The Edge Property Pullout, Issue 777 (May 1, 2017) of The Edge Singapore.