Super rich may invest in Jakarta, if it cleans up: Survey
Novia D. Rulistia. The Jakarta Post, Jakarta - 14/04/2011
Jakarta may become a popular investment destinations for the global super rich — if it can improve living standards in the city, according to a survey.
The city was ranked the 28th best destination for investment by the super wealthy, according to London-based property research outfit Knight Frank’s Wealth Report Attitudes survey.
However, the report said that Jakarta might surge to 28th place sometime over the next 10 years, ahead of Doha, Abu Dhabi and Taipei.
“Our respondents say that they have high expectations for Jakarta as one of the cities in the world that they might invest in,” Knight Frank researcher Hasan Pamudi said.
For the survey Knight Frank collected data from Citi Private Bank high-value customer managers who handled an aggregate of 5,000 clients.
Each client in the program controlled more than US$10 million and were eager to invest, according to the report.
The survey respondents mostly came from East Asia, including China, Taiwan, South Asia, as well as Latin America, nations in the former Soviet Union and Africa.
Hasan said that respondents chose Jakarta due to its favorable political and economic conditions.
“In addition, the respondents also took into account the bigger role that Indonesia plays on the international stage,” he said.
Hasan also said that Jakarta also offered entertainment, recreational spots and a vibrant culture that have also had an added value in the eyes of respondents.
Foreign investors would also be attracted to the real estate sector in the city, he added.
“Another important factor is the high demand by foreign investors for land for industry as the driving force in property and commercial buildings,” Hasan said.
The survey placed New York in the top spot, followed by London, Shanghai, Beijing and Hong Kong.
The survey also ranked Jakarta 17th as the main destination for entrepreneurs looking for business opportunity in the next 10 years, behind the top three cities, Shanghai, Hong Kong and Beijing.
“The survey shows that there’s a shift of influence from countries in the Americas and Europe, thanks to rapid economic growth in Asia,” Hasan said.
Knight Frank, however, was quick to qualify its findings by saying that Jakarta would only become a top business destination if it could solve three of its long-standing woes: traffic, flooding and poor infrastructure.
Knight Frank country director Fakky Ismail Hidayat said that the city should immediately improve its public transportation system.
“It may not have a direct impact on the rich, but it would do much to reduce the traffic problems that can affect their business,” he said.
Fakky also said there was a need to improve cargo service at the city’s airport and seaports to ease the way for exports and imports.
“And then of course the flooding problem. The government should have an immediate and thorough solution for this,” he said.
Fakky said that the super rich were primarily concerned with their quality of life.
“Their reasons to invest here are all related to factors that determine the quality of life in the city,” he said.