Indonesia hospitality draws HKI Group first hotel investment

TAIPEI (TVBS News) — A Taiwanese textile dynasty has made its first foray into hospitality, acquiring a premium property in Jakarta's coveted golden triangle as Indonesia emerges as a regional investment magnet. The HKI Group (虹光集團), controlled by third-generation heirs Michael and Thomas Song, has invested in the Fraser Residence Sudirman Jakarta in a move that reflects broader shifts in Asian capital flows. The acquisition represents a strategic pivot for the family empire, which has built its fortune in Taiwan's textile market while maintaining operations across Southeast Asia.

Michael Song (宋大江), chairman of the HKI Da Jiang Group, sees the Indonesian capital as uniquely positioned to attract global investment. "The Fraser project is right in the middle of a golden triangle in Jakarta, a country of 280 million population and one of the top 12 manufacturing nations of the world," he explains. The family's timing capitalizes on Indonesia's recovery from nearly a decade of political uncertainty and pandemic-related economic disruption that had depressed property values across Jakarta's premium districts.

The investment thesis appears sound based on current market dynamics and financial performance metrics. "Due to politics and COVID-19 pandemic, Jakarta has been on a downward trend in terms of property prices for the last eight years. So timing for us was perfect," Michael Song notes. Thomas Song (宋大華), chairman of the HKI Da Hua Group, points to compelling returns, with the project potentially generating 7% to 9% returns on investment and maintaining occupancy rates above 90%.

Indonesia's economic transformation has created what analysts describe as a perfect storm for foreign investment. The archipelago nation has implemented sweeping trade reforms, reducing tariffs while joining the BRICS economic alliance to expand market access. "Indonesia's tariffs have dropped from 32 percent to 19 percent, the lowest in Asia. Plus, we see it joining the so-called BRICS alliance, which means its trade markets with the United States are completely opened up," explains Andy Huang (黃舒衛), a real estate expert from Colliers Taiwan (高力國際).

The country's demographic advantages and natural resource wealth position it as an increasingly attractive alternative to traditional manufacturing centers. Indonesia's youthful population and abundant minerals create compelling incentives for companies seeking to diversify their supply chains. "Whether it's the original demographic dividend advantages or its abundant mineral resources, these will basically become major targets for emerging industrial nations or advanced industrial nations to set up companies and factories there," Huang adds.

Jakarta's appeal reflects broader patterns in global capital allocation, where gateway cities increasingly serve as focal points for international investment. The Indonesian capital and its central business districts have become preferred destinations for multinational corporations and expatriate professionals establishing regional operations. "Areas like Jakarta or the so-called Sudirman Central Business District (CBD) regions are where foreign businesses or domestic top-tier manufacturers get involved, or where expatriate personnel choose as preferred areas," Huang observes.

Indonesia's ambitious infrastructure agenda promises to further accelerate economic development and real estate demand. The government's most transformative project involves relocating the national capital from Jakarta to the planned city of Nusantara, an undertaking that began in 2024. "Indonesia's key development is its relocation of the capital to the new capital Nusantara, and the government expects to begin this in 2024, which will bring certain growth to Indonesia's real estate market and their infrastructure," Thomas Song notes.

The HKI Group's Indonesian venture builds upon six decades of Taiwanese business expansion across Southeast Asia, dating to the economic migration wave of the 1960s. Michael Song traces this legacy to his family's recognition that Taiwan's limited domestic market necessitated regional expansion. "Since the 1960s there is a wave of Taiwanese business people going out expand overseas, because Taiwan is not such a big country, so you just got to go outwards, and Indonesia just seems to be one of the countries that my family chose to invest in," he reflects.

The hospitality investment also reflects how current geopolitical tensions have reshaped Asian investment flows, creating opportunities in markets that benefit from supply chain diversification. Trade disputes and manufacturing relocations have particularly advantaged Southeast Asian economies positioned to capture growth previously concentrated in China. "The global trade war, the shifting for all the industry from China coming up. I think Indonesia, Vietnam, Malaysia are one of the big (beneficiaries). So we see Indonesia as a goldmine," Michael Song states, positioning the Fraser acquisition as part of HKI Group's strategy to leverage Taiwan's business expertise within the region's expanding economic landscape. ◼