Bali Hotel & Branded Residences Report 2023

Overview

Reflecting on legacy, economic transmigration, and the Zoom Boom. The resort island of Bali continues to be one of the world’s most desired holiday destinations. Over the past three decades, Bali real estate market has continued to evolve and change. Though, for branded residences in Bali, both in the lead-up and period after the global pandemic it has lagged behind other key Southeast Asian leisure markets such as Thailand and Vietnam.

Turning back the page, the initial wave of branded legacy properties in Bali included Amanusa. Moving into the Millennium, a second wave of mixed-use developments emerged, featuring Alila Uluwatu, W Seminyak, Banyan Tree, Karma Jimbaran, and later Karma Kandara, Anantara Legian, another project in Uluwatu, Peppers Seminyak, and a scattering of others.

In the lead-up to the Global Financial Crisis (GFC), the booming Indonesian economy ignited a considerable number of condominium (condotel) projects aimed at domestic buyers. These often featured guaranteed returns and were concentrated in Kuta, Sunset Road, and peripheral areas.

During the same period, as land prices skyrocketed, a series of master-planned, mixed-use projects were planned in Tabanan, New Kuta/Pecatu, and Pandawa, with luxury brands such as Mandarin Oriental and Rosewood. The economic slowdown and impact of the GFC brought these projects to a halt. At the same time, there was some movement in non-branded developments being sold and converted, such as the COMO Uma Canggu.

Bali’s real estate market during the pandemic experienced an influx of domestic land and villa buyers, most notably from Jakarta. The second most active buyers were Russians and Eastern Europeans, purchasing for both retail transactions and investment. The appeal of investing in a fully foreign-owned Indonesian PMA company, along with visa benefits, was and remains widely popular. Another rising sector has been the development of primary and secondary medium-cost townhomes and smaller villas for foreigners on leasehold ownership in areas such as Canggu, Umalas, Pererenan, Bukit, and Jimbaran.

When looking at the current state of branded residences in Bali, land costs for larger projects—typically featuring a hotel and branded real estate—present significant barriers to entry. Smaller, more entrepreneurial developers, often foreigners, have moved quickly into leased land, successfully launching and selling projects. Meanwhile, larger Jakarta developers are reactivating shelved projects or restructuring stalled developments. The size and complexity of these projects often require longer timelines, making them the “elephant in the room” for the branded properties segment.