When Singaporean car dealer Keith Oh first read the Facebook message, he wasn’t sure it was real. A Chinese client ordered a S$1.1 million ($830,000) Bentley-sight unseen-over the social network.
“They just asked for the price and when we could do the delivery, that’s all,” he said. “It’s a million dollars to us but it’s probably nothing to them.”
The quick sale was the latest sign of a wider trend: Money is sloshing around Singapore like never before. As the coronavirus pandemic hammers Southeast Asia and political turmoil threatens Hong Kong, the city has become a safe harbor for some of the region’s wealthiest tycoons and their families.
For rich people “who can decide where they want to live and settle down, Singapore is a place of choice now,” said Stephan Repkow, who founded Wealth Management Alliance in 2015 after four years at Union Bancaire Privee. He said two of his foreign clients had become residents in the past 12 months and more are on the way.
Singapore has long been a draw for wealthy Chinese, Indonesians and Malaysians who would come for short trips to shop, play baccarat at the casino or get medical check-ups at world-class clinics. Mount Elizabeth Hospital Orchard, just steps from the flagship stores of Gucci and Rolex, features a UOB Privilege Banking Centre in the lobby.
The pandemic has changed all that, prompting many tycoons and their families to stay for months, in some cases seeking residency to ride out the storm. On a per capita basis, the mortality rates in Malaysia and Indonesia are more than 10 and 30 times higher than in Singapore, according to data collected by Johns Hopkins University.
The number of single family offices in the city-state has doubled since the end of 2019 to about 400, including firms recently set up by Google co-founder Sergey Brin and Shu Ping, the billionaire behind Chinese hotpot empire Haidilao International Holding Ltd. Demand for private golf club memberships is soaring, real estate prices have jumped the most since 2018 and until the recent clampdown, Michelin-star restaurants were packed. Global banks like UBS Group AG meanwhile are expanding in the city to manage the massive influx of assets.
A spike in virus cases that’s led to stricter border measures and the cancellation of upcoming events such as the World Economic Forum meeting may pause some of the rich migration to Singapore, but it’s likely to be short-lived.
While cases have jumped to a few dozen a day, it’s a far cry from the several hundred daily infections in New York City alone. Singapore is also charging ahead with vaccines: It’s given enough jabs for 30% of the population, almost twice the rate in China and even further ahead of neighboring Malaysia and Indonesia.
It’s a delicate balance for Singapore, which relies more on trade and open borders than just about any other Asian nation. Locking down and restricting travel for too long would make it unattractive to global investment and talent, while failing to control the virus risks a political backlash and its reputation as a safe regional hub.
“Our recent spike of pandemic is very unfortunate, but we will eventually go through this phase again,” Repkow said. “Singapore is resilient and able to manage crisis in a very pro-active and efficient manner.”
Seletar Aiport, the hub for private jets, has seen demand for hangar space soar during the pandemic, said Alan Chan, head of business development at the 67 Pall Mall wine club, who until November was an executive at Go-Jets.
One private jet pilot who declined to be identified said it’s still extremely difficult to snare a spot. While the recent strict travel rules have extended to people with their own aircraft, he added that most expect them to ease in line with commercial flights after a few weeks.
Singapore doesn’t divulge many details on its super-rich migrant residents, but private bankers, multi-family offices and other service providers say the new arrivals are helping their businesses, in a city famous as the setting for the “Crazy Rich Asians” film.
One top banker who declined to be identified said Chinese clients ranked first among new account openings, followed by those from India and Indonesia. Another said that client meetings-once a tortuous process of flying to Jakarta and fighting traffic-had become much easier because many of his Indonesian customers were staying in the same luxury condominium in Singapore.
Harish Bahl, founder of Smile Group, a family office that focuses on tech investment, said he’s never met this many super rich in the city. He’s been working in the tech space for more than two decades.
“Since the pandemic, billionaires from all over the world have been staying on longer in Singapore, including those from China, Indonesia, India and the U.S.,” he said, citing incentives for setting up family offices.
One Indonesian businessman who continues to live and work in his home country said his parents have spent more than a year sheltering from Covid-19 in the city-state. While they previously knew about five other Indonesian families living in Singapore before the pandemic, the number has since mushroomed to about 25.
Some of the elders spend their days in leisure, meeting with friends and exploring the city. The more restless have kept active by running their businesses remotely, and many have established family offices-in part to ease the process for gaining residency, he said.
Singapore makes it relatively easy for the super rich to settle. Through its Global Investors Program, the country grants a fast-track to permanent residency to qualified business owners or families if they invest S$2.5 million in a local business, certain funds or a family office with at least S$200 million in assets.
“This has enabled us to strengthen the quality of investors we attract, and is in line with our efforts to strengthen Singapore’s status as a key Asian node for high-growth tech companies and investment activities, grow existing and new industries, and create jobs for Singaporeans,” Matthew Lee, senior vice president of Singapore’s Economic Development Board, wrote in an email.
Perks related to permanent residency include ease of travel, long-term stay permits for parents, cheaper, easier business loans, reduced stamp duties on real estate and a path to full citizenship.
The government also introduced a new investment vehicle last year, known as the Variable Capital Company, making it more attractive for family offices, hedge funds and private equity firms to set up shop. Over 260 VCCs have been established since then, according to the Monetary Authority of Singapore.
All this has increased demand for high-end luxury products and services. Odette-a Michelin three-star restaurant considered one of Asia’s best, where a tasting menu for two with wine and cheese can top S$1,000-was booked solid for months until dining in was paused. “We have a lot of Indonesians, for example, over the past few months trying to come in every two to three weeks,” said General Manager and Operations Director Steven Mason, speaking before the fresh curbs limited business to takeout only.
To be sure, wealthy locals who are unable to travel are contributing to the spending spree.
“Eating is the new travel-I think that’s why restaurants are doing so well,” said Mason.
On the 27th floor of the Shaw Centre near the Orchard Road shopping strip, construction is almost underway at 67 Pall Mall, the first international outpost of its London namesake. Despite having little more than an empty shell to show potential clients, the wine club is on track to open by November with 3,500 clients. A life membership goes for S$200,000.
“Singapore during the virus is a great place to be” compared to other cities, said Chief Operations Officer Niels Sherry. “Not many clubs open with a sold-out member base.”
The wealth effect is also pushing up prices at golf clubs. The cost to join the Sentosa Golf Club has soared to S$500,000 for foreigners, up 40% from pre-pandemic levels. Some of these golfers have permanent residency, while others are recent arrivals who see it as a good investment, according to broker Lee Lee Langdale.
Once tycoons land in Singapore for an extended stay they need a car. Sales of premium vehicles to foreigners since mid-2020 have jumped about 50% to 60% compared with a year earlier, said Vincent Tan, founder of luxury car dealer Vincar.
“The majority are Chinese,” and most pay in cash, he said. “The Rolls Royces, Bentleys, Porches and high-end Mercedes are the models that move quite well.”
Statistics released by the Land Transport Authority show that the number of Bentleys and Rolls Royces cruising the streets of Singapore leaped to more than 1,300 in 2020, the biggest jump since 2013. That trend is continuing, with another 70 of these cars registered in the first four months of 2021, in a nation of just 5.7 million people.
Global banks are gearing up to serve the super rich. JPMorgan Chase & Co. plans to double the number of private bankers in the city over the next two years, while HSBC Holdings Plc is offering ultra-rich clients in Hong Kong and Singapore direct access to its investment bankers. UBS’s Asia Pacific President Edmund Koh told the Business Times that Singapore was attracting as much of the new assets in the region as Hong Kong. That compares with a 75%-25% split in Hong Kong’s favor five years ago, said Koh, who recently opened a new Singapore office for 3,000 staff.
Brendan Carney, CEO of Citibank Singapore, said the city’s fundamental attractiveness remains strong despite the latest virus clampdown.
“We are confident that long-term industry prospects will not be dampened by the recent Covid restrictions,” said Carney, whose New York-based bank plans to hire more than 330 relationship managers for its wealth business by 2025.
The influx of foreigners is helping to fuel the property market, with the strongest growth in the luxury sector. It’s also made Singapore an outlier in the rental market, with rates rising even as they fall in New York, Hong Kong and London.
All this visible display of wealth can cause resentment, according to Toby Carroll, who lectures on political economy at the City University of Hong Kong and previously worked at the National University of Singapore.
“The negative impact for the majority of people facing increased costs of living-including of housing-declining social mobility and rising inequality bodes poorly for social cohesion,” he said in an email. “The link between rising inequality and social instability is very real.”
In the meantime, Singapore’s merchants like Ace Financial Service Pte.’s Oh, the car dealer and financier, are making hay.
“Post-Covid, we’ll probably emerge stronger and this will be a better place to stay so a lot of new citizens may call Singapore home,” he said.