SINGAPORE -- Property developer Keppel Land, a subsidiary of Singapore conglomerate Keppel Corp. said Tuesday it has agreed to acquire a prime site in Jakarta's central business district from Indonesia's Bank Central Asia for 586 billion rupiah ($44 million).
Keppel plans to develop a high-rise tower which could accommodate around 400 luxury apartment units, it said in a press release. The site measures approximately 7,710 sq. meters and the development cost is estimated at 170 million Singapore dollars ($126 million), including land acquisition.
The site is adjacent to International Financial Centre Jakarta, another development by Keppel. Tower Two of the project, which was topped off in 2015, has tenants including Japanese insurance company Tokio Marine and Australian serviced office provider Servcorp. "We will tap on the synergies of the two developments to create a vibrant live-work-play destination," Keppel Land CEO Ang Wee Gee said in a press release.
The new apartment building will be located within close distance to the city's shopping, dining and recreational amenities and will be easily accessible from a station of the city's mass rapid transit system, which is slated to be fully operational in 2019.
Keppel has been ramping up investments in emerging countries in the region, including Indonesia and Vietnam. Its recent investments include Phase Two of Saigon Centre in Ho Chi Minh City, which includes a 55,000 sq. meter retail area, a 37-story office tower and around 200 luxury serviced apartments. The retail mall opened in July 2016.
Jones Lang LaSalle's recent report noted that while the implementation of luxury taxes has somewhat overshadowed demand for luxury condominiums in Jakarta, local and international investors have remained active. "Institutional investor demand is likely to remain strong with local and international groups maintaining a strong interest in developing both condominiums and landed housing," noted the report.