Editor: Cheyenne Hollis
Pages 28, Dot Property Magazine ISSUE 024 Q3 2018
Kuta Beach, also known as Kute, on the island of Lombok is slowly waking up. Often confused for the area in Bali it shares a name with, it could now be time to pay attention to this region. Improvements to Lombok International Airport means more people are now traveling to the region than ever before. As the island’s most developed area, Kuta Beach has benefited tremendously from this increase in tourism. The Indonesian government remains committed to its goal of bringing 20 million tourists to the island by 2019. The USD 3 billion Mandalika Resort finally kicked off and the Special Economic Zone (KEK) is predicted to drive economic growth as well as increase tourism figures over the next decade. Plans call for Mandalika to create 10,533 hotel rooms, 1,500 residential units, a theme park, an eco-park, a water park, a large marina, and a golf course among other facilities. This should prove to be a major boon to land values in and around Kuta. The rebirth of the Mandalika Resort project comes nearly a decade after the Indonesian government sold the site to the Dubai Development Corporation(DDC) for USD 240 million. What started with promise ended in failure after the DDC sold the site back to the Indonesian government after being crippled by the Global Financial Crisis in 2008. The IndonesiaTourism Development Corporation is spearheading the latest incarnation of the Mandalika Resort. Villas provide an investment opportunity in KutaFor individual investors, villas in Kuta are likely to be the most appealing option. Land plot sales for the development of luxury villas in the area have been strong with developers. They are able to offer these land and villa plots to overseas buyers. According to hospitality consultancy Horwath HTL, overseas investors are driven to the area due to the relatively low price points and the potential for significant capital appreciation in the coming years. The firm also found that Lombok land prices were growing by 30 percent annually, but still remained far cheaper than what is available in Bali. Market reports show that 82 percent of villas in Lombok are priced below USD 400,000 with the average price per square foot coming in at USD 240. This is extremely cheap when compared to Southeast Asia’s major tourist areas of Bali and Phuket. One important thing to note, foreign buyers can not own freehold land in Indonesia. However, they are eligible to own a 100-year leasehold property, and many of the developers currently building villas in Kuta are helping buyers navigate the market.