Singapore should “re-position” Sentosa as “the new Bali” for tourists, said City Developments Ltd. Executive Chairman Kwek Leng Beng.
Bloomberg reported Mr Kwek as saying on Thursday (21 Feb) that “Sentosa was touted when it first started for the rich and famous”, and that over time, Singapore had overlooked the island.
“Her parents just forgot about this young lady … I would like to suggest that they should re-position it as the new Bali,” he said.
Mr Kwek added: “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?”
Sentosa’s decline in the property market, according to Bloomberg, is largely due to stamp duties being raised to 20 percent for international buyers since 2011, despite being the only area in Singapore where foreigners are permitted to purchase landed property. In contrast, locals only pay 3 percent for stamp duties.
Home prices in Sentosa Cove fell around 30 percent since 2010, added Bloomberg.
Retail businesses have also taken a hit, as seen in the closing down of a stretch of restaurants near the marina at Quayside Isle.
City Developments Ltd’s interest in elevating Sentosa’s image again, however, appears to be rooted in a dealing made with Blackstone Group LP and CIMB Bank Bhd. five years ago.
The deal was made to “raise additional capital from a hotel, retail and residential project it had developed earlier”, Bloomberg reported, in which “Blackstone and CIMB agreed to receive 5 percent fixed interest for five years, and a share of the project’s cash flows” for S$469 million.
“With many units in the residential part of the project still unsold, City Developments needs demand, and prices, to revive,” Bloomberg noted.
Meanwhile, City Developments told Bloomberg on Thursday that it is “working with its partners on a mutually favorable way to unwind the structure before its expiry in December 2019”.
Sentosa and Bali share a few similarities such as a tropical climate and being destinations for the affluent. However, Bali is larger in size, and has a diverse natural landscape, in addition to being world-famous for its surf beaches and paddy fields, in comparison to man-made Sentosa.
Note (as of 28 Feb 2019, 12:04 p.m.): Mr Kwek’s title has been amended from “CEO” to “Executive Chairman” in the title. His designation remains accurate in the post at the time of amendment. The author apologises for the inaccurate designation.