Malaysia-based Amarin Group of Companies will be adding a hotel on the idyllic island of Bali, Indonesia, to its property development portfolio.
It is developing the eco-friendly Amarin Seminyak on a 1.17-acre site in Seminyak, a short distance away from the popular Kuta beach. Construction will start in 2Q2012 and is expected to be completed by end 2014. The hotel will incorporate green technologies and luxurious fittings.
“We want to introduce a hotel that is different,” says director Andrew Hah.“We understand that people go to Seminyak because they like being in a private villa with a little plunge pool. So we want to incorporate what people want — in this case a private villa and a pool within their hotel rooms. Hence, some of the rooms will have private plunge pools, decks and gardens where you can be away from the other guests.”
Hah and his close friends Lim Yuh Hock and Lee Vun-Tsir had formed Amarin Group in 2003. Lim and Lee are also directors of the group.
As architect (Hah), engineer (Lim) and property consultant (Lee), the three men brought different skills to the table and came up with the idea of boutique homes in Malaysia that feature active and passive green technologies and are aesthetically pleasing. “We are trying to build a brand that emphasises service, design and luxury,” Lim says.
Amarin Group has two developments in Kuala Lumpur. Its maiden project was Amarin Kiara in Mont’Kiara, which was completed and handed over in 2008. It comprises 30 semi-detached units and one bungalow with a gross development value (GDV) of RM70 million. The homes feature passive green technologies such as deep overhangs to block out direct sunlight, north-south orientation, water-saving taps and sanitary ware, energy-saving lights and appliances such as ovens, hoods and cookers, and recycled cement boards.
The second project is an ongoing development called Amarin Wickham in Ampang Hilir with a GDV of RM110 million. It is scheduled for completion in December 2012. Amarin Wickham comprises 21 duplex, triplex and penthouse condos with built-ups starting at 2,848 sq ft housed in two 5-storey blocks. Among the green strategies adopted include a north-south orientation, shading to block out direct sunlight, natural ventilation, day-lighting, energy-efficient fixtures and energy production through solar photovoltaic cells. Amarin Wickham was the first high-rise project to be awarded a subsidy under the government-initiated Suria 1000 programme to enable Malaysians to install solar building integrated photovoltaic systems in residential projects.
The Bali hotel project has an estimated GDV of US$30 million and will comprise 160 rooms with built-ups of 450 to 1,200 sq ft in two 5-storey blocks. The land was purchased in 2010 for over US$3 million.
The design of the hotel will be undertaken by award-winning Balinese architect I Putu Edy Semara and most of the materials used, according to Hah, will be locally sourced to reduce the embedded carbon footprint of the project. There will be a rooftop pool and restaurant for guests to enjoy the panoramic view as well as the spectacular sunsets that Bali is renowned for.
According to Lim, the green technology used in the hotel project will be similar to those used in the company’s Malaysian projects. The hotel’s green features could include energy-saving lighting, solar photovoltaic cells, inverter air-conditioning and a heat exchange system to heat water, and rainwater harvesting. Passive strategies may include using louvres for shade to reduce direct sunlight, natural ventilation and bathrooms that receive sunlight through a reflective surfaced shaft that also helps with ventilation.
The group is looking for individual or institutional investors to take up about 60% of the project or about 30% in each block for a total of US$18 million.
“Our marketing strategy is not to sell the units individually but to look for en bloc investors for 60% of the development,” says Hah. “There will be a return on investment but it will be tailor-made to the requirements of the investor. We will keep the remaining units.”
The group is also in talks with several hotel operators to manage Amarin Seminyak.
Potential in Bali
So, why build in Bali? It is because tourism on the island is growing, says Lee. “The number of foreign tourists was three million last year; total tourist arrivals, including domestic, added up to about 11 million in 2010. This exceeded the eight million passenger capacity of Bali’s Ngurah Rai International Airport, also known as the Denpasar International Airport.”
According to a January edition of The Jakarta Post, the government has allocated IDR1.9 trillion last November to renovate and refurbish the airport in time for the Apec Summit in 2013. This amount was part of a IDR3.5 trillion allocation to improve the airport and infrastructure ahead of the summit.
A Colliers International Indonesia 4Q2010 Real Estate Market Report on the hotel sector published data from Bali’s Statistics Bureau Office, which recorded 2.4 million foreign tourists in the sector from January to November 2010. This was a 10% increase from the same period in the previous year. The Bali province government has targeted around five million foreign tourists by 2015, depending on the infrastructure in every Bali regency being ready, acknowledging that tourism development is scattered across Bali and not just concentrated in southern Bali.
Thus, Amarin Group decided it was the right time to have a “go at it” in Bali. As for the location of the hotel, says Lee, “Seminyak does not have many hotels. There are a lot of villa developments and because of land becoming more expensive, more hotels are coming up”.
Seminyak is one of the more cosmopolitan areas on the island with many retail outlets and restaurants featuring varied cuisine such as Moroccan, Italian and Japanese.
With the uncertain global economic conditions, Amarin Group has buffered itself against any changes in the economy that could affect its construction schedule. “Any investment in Indonesia, like Amarin Seminyak, needs to be privately funded,” Lim explains. “As foreigners, we are not allowed to borrow money to finance a project. So the land for the hotel was paid for in full. We will not be affected by interest rate fluctuations.”
On the home front, the developer is in discussions on its next development — a joint venture on 15 acres of beachfront land to develop either a hotel or a villa.
It is also looking at offering affordable homes. Based on feedback from its staff, the group believes there is demand for houses priced from RM300,000.
“We want to do mass-market projects with green features learnt from other projects in the Klang Valley,” says Hah. He believes that if the government redesignates low-cost housing land to allow RM200,000 to RM300,000 homes, developers would start building.
There is plenty of low-cost housing land that is undeveloped in prime and urban areas, he adds.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 876, Sep 19-25, 2011
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