Sunito’s Crown Group looks offshore with $1bn Jakarta project

Crown Group has formed a joint venture with an Indonesian land owner to develop a $1bn project in Jakarta.

Crown Group's Indonesia project artist impression

Sydney-based Crown Group has formed a joint venture with an Indonesian land owner to develop a $1 billion apartment and mixed-use project in Jakarta as it makes initial moves offshore.

The group was also hunting for sites in the US, but it was “early days”, according to Indonesian-born chief executive Iwan Sunito.

The Jakarta site, of about 10ha, would house apartments, a shopping centre, educational facilities and a medical centre in a long-term development.

“Green Square (Crown’s “Infinity” project in inner Sydney) is a 50,000sq m building, this is 500,000sq m. It’s a multi-block development,” Mr Sunito said.

Mr Sunito said one of the attractions of Indonesia was the use of progress payments, where apartment purchasers pay in instalments during construction.

“By the time you sell it out, there is enough (funds) to build the building,” he said. “I do think that Indonesia will be the next emerging market that is going to be massive.”

While Indonesia’s property and mining sectors were currently under pressure, planned changes to laws that will allow foreigners to buy property would open opportunities, particularly in tourism areas such as Bali, Mr Sunito said.

Crown, which has a $4.8bn pipeline of projects including five Sydney unit projects under construction, is also investigating an entry into US development.

The company is looking at sites in Los Angeles and New York. “Los Angeles is accessible for me, but New York is where the money is,” Mr Sunito said.

The sale and funding of projects was also different between the two jurisdictions with New York having the advantage of progress payments when apartments were sold off the plan, he said.

Crown has been marketing its Australian apartments offshore for some time, with Mr Sunito seeing overseas development as an extension of this.

As part of Crown’s expansion plans, Mr Sunito has held talks with groups from China, Hong Kong and Singapore about joint ventures.

A partnership would add expertise in addition to capital and may include a cornerstone investment if Crown moves to a float.

A focus on Asia may make listing in Singapore an option with the company’s ambitions to roll out Crown branded units and serviced apartments internationally.

In Australia, Crown is developing serviced apartments at its project in Clarence Street in Sydney’s CBD, Parramatta in Sydney’s west, and as part of the Infinity project at Green Square.

Mr Sunito, who receives the Urban Taskforce’s Property Person of the Year award tonight, has flagged plans to eventually list the company.

Earlier this year, Crown appointed former JPMorgan head of real estate investment banking Anthony Ryan to run its new global capital division. The business arm will tap investment funds for the group.

At the time, Mr Ryan said Crown was also well placed to offer products in mezzanine debt, preferred equity, or in equity joint ventures, as well as to offer longer-dated investments.