Opportunities Abound in Bali…When You Escape The Crowds
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With the easing of COVID-19, tourists have returned to Bali’s beaches once again. The island welcomed 2.1 million international travellers last year, far exceeding the target of 1 million that the country’s Minister of Tourism and Creative Economy Sandiaga Uno had earlier set.
This year, Bali received 1.4 million foreign tourists in the first four months alone, and is expected to hit the authorities’ target of 4.5 million international arrivals when the year wraps.
Clearly, life has returned to Indonesia’s much-loved island. When the pandemic wreaked havoc on the travel industry, Bali’s hotel rooms were left empty and tourism workers furloughed. As demand dried up, prices plunged to record lows across the board. Peculiarly, this fuelled a wave of villa-building by savvy foreign investors as land prices dipped by 10 to 15 per cent, and an explosion of digital nomads on the island. The latter even inspired Indonesian authorities to create the Second Home Visa, aimed at wooing top-tier foreign professionals to base themselves long-term on the island.
With the return of tourists, the days of cheap land and rental are gone. Prices for property and rent have skyrocketed, and in some cases by as much as 30 per cent.
But observers believe that the island still holds potential and promise for investors – especially if they are willing to look further.
Focus on Untapped Zones
Bali’s spike in prices have left some investors questioning if the island’s housing and rental market is too saturated.
An analysis by Rumah found that the demand for property on the island is focused on a handful of popular areas. Denpasar, Bali’s provincial capital, and Badung, which covers Bali’s most populated tourist regions including Kuta, Seminyak, Nusa Dua and Canggu, account for more than 60 per cent of property demand.
As these areas become increasingly crowded, investors hoping to get in on the action will need to look further away from the tourist hotspots. The Indonesian authorities have taken the lead by designating Kura-Kura Bali as a Special Economic Zone (SEZ). Some 10 km away, a 43-hectare health economic zone – also a designated SEZ – is being developed in Sanur Village.
Kura-Kura Bali, located 15 minutes from the Ngurah Rai International Airport and connected to the main island of Bali by abridge, remains a largely untapped area, though the government has built public infrastructure such as roads, internet connectivity and water and waste systems during the pandemic.
The authorities plan to promote the 500-hectare Kura-Kura Bali as a hub for tourism and creative industries, are now wooing investors and business owners to the SEZ with incentives such as tax exemptions and employment and immigration benefits. The SEZ aims to create up to 100,000 new jobs in direct and indirect employment, and is expected to contribute US$31.8 billion to the economy when fully operational by 2052.
Over in the Sanur SEZ, which will focus on providing health and medical services, the authorities aim to attract US$682 million in investments and provide up to 43,000 jobs.
Think Long-term
While it will take years for Kura-Kura Bali and Sanur to build themselves up as commercial hubs, investors who are able to act fast and establish their presence in the SEZs will benefit in the long term.
Within Kura-Kura Bali are zones designated fora marina, a technopark and a health hub, as well as land plots for mixed-use developments.
Sanur will house a hospital, a surgery clinic, a fertility clinic, an immunology centre and a retirement home built in collaboration with partners from the United States, Australia, South Korea and Japan.
The message is clear: the Indonesian authorities are committed to developing the two SEZs. And as the two SEZs flourish, so too will the value of land and property. Investors who are able to act early will stand to reap the biggest rewards.
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