Bali Hotel & Branded Residences 2024

Overview

Compared to many other Southeast Asian resort destinations, Bali has seen limited penetration of branded residences over the past two decades. Unlike Thailand, where Phuket, Pattaya, Hua Hin and Koh Samui have all seen rapid progression, Penang in Malaysia, the Philippines’ Cebu or virtually the entire coastline of Vietnam, Bali has witnessed developers focus on tourism and not real estate projects.

BALI BRANDED RESIENCES MARKET

A leading factor is that large Indonesian property groups prefer the scale of larger scale projects in Jakarta and other urbanizing locations. They consider Bali a tourism market and when investing in hotels on the island are hesitant to sell-off real estate that has long-term recurring revenue potential.

Another issue is the restrictive environment on property ownership for foreigners, which offers relatively short leasehold terms compared to other Southeast Asian countries. Even condominiums targeting overseas buyers limit freehold ownership to non-Indonesians who hold residency and/or work permits. The application of leasehold terms across Bali is localized and often lacks transparency or consistency.

Moving up the echelon to luxury properties, the recurring costs of single-use PMA companies to hold these assets, which legally can be owned by foreign-registered companies, have continued to increase.

That said, we believe there is a changing mindset of Indonesian developers to develop branded residences in Bali and our research indicates that within the next 12-24 months we will see new mixed-use developments highlighted by well-known international hotel brands such as Anantara

Ubud Bali Resort and Oakwood Hotel & Apartments Benoa Bali. During the pandemic and through the recovery Bali has witnessed a surge in real estate investment by Indonesians during the pandemic, and this is expected to grow to a wider scale among those seeking second or holiday homes. Once domestic buyers enter the broader resort-grade property market, we expect that impact to be a game-changer for branded residences.

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