Guest article by Palm View Properties Founder & CEO, Desvann J van Vuuren
If you had to ask 100 random people, in particular Aussies, Kiwis and Brits, “Do you know where Bali is?” or, “Have you been to Bali?” I’d predict that 60 -70 percent will say yes to either one or both.
Now, ask that same question to that same 100 people, but only this time replace “Bali” with “Lombok.” Suddenly, you would likely see a massive drop in that percentage. Over the past four years of actively running my real estate brokerage and speaking to large volumes of people, both friends and clients alike, I’ve noticed that very few people are aware of Lombok’s potential as a tourist destination. In general, not many people, especially Westerners, know about the beautiful island of Lombok. Yes, this has started to change over the past few years, but the massively destructive earthquake of 2018, closely followed by the global COVID-19 pandemic, haven’t helped the cause. However, here at my real estate brokerage, Palm View Properties, we like to refer to Lombok as the Sleeping Giant!
Like Bali, the number one economic driver and sector of employment in Lombok is tourism. However, the island of Lombok, and in particular the Nusa Tenggara Barat district where the iconic trio of Gili Islands (Air, Meno and Trawangan) are located, has considerable potential, both economically, for investors, but also for travelers and explorers. Once you discover Lombok, you’ll understand why; it’s simply breathtaking.
Now, there are already many online articles by various real estate agencies about Lombok’s potential. However, what these articles don’t show you is how Lombok is truly the Sleeping Giant—how the Indonesian government, major international companies, and bilateral government initiatives are coalescing around this island to create an investment environment with major economic potential.
The island of Lombok currently houses a $3 billion USD ongoing development known as the Mandalika Resort Area, or Mandalika Special Economic Zone (SEZ). Already on its CV is the development of a world-class racing circuit where the WorldSBK series and Moto GP events were held successfully earlier this year. The Moto GP track was built in the south part of Lombok, in the town of Kuta, and the area was designated by the Indonesian government as an SEZ. The Mandalika Resort Area comprises 1,250 hectares of prime beachfront land and has already drawn well-known hotel groups such as Novotel, Grand Mercure, Grand Aston, Golden Tulip, and Pullman Hotel and Villas, some of which have already been constructed. Even the Club Med Group is considering future development. In addition to its proximity to the racing circuit, the area also offers great surf spots, restaurants, bars, and marina seafront perfect for future business investments. Upcoming confirmed projects include a family-friendly theme park and a 27-hole international PGA-standard golf course. As well as seeking to attract more tourists in general to the island, the overarching project is endeavoring to promote eco-friendly development by using solar power, building a water desalinization plant, and retaining 51 percent of the area as open green space. As reported by Invest Islands, these initiatives are crucial to protect the region’s natural beauty and enhance local culture.
The Mandalika Resort Area/Mandalika SEZ is the largest project of its kind in Southeast Asia, and is also the Indonesian government’s centerpiece in its attempt to create a Bali-inspired tourism model. However, while Bali’s development was more haphazard, under the Mandalika development, the Indonesian government is applying more focus, energy and professional resources, as well as initiatives to bolster local knowledge and capacity, to ensure more sustainable development.
In addition to the Indonesian government’s Lombok development efforts, the Australian government also has its own program in Lombok, the KOMPAK (Governance for Growth) initiative. KOMPAK is a facility and program with the principal goal to assist the Indonesian government in achieving its poverty-reduction targets and addressing inequality. In place since 2016, KOMPAK has played a key role in mitigating the effects of the 2018 earthquake, which, as reported by KOMPAK, destroyed nearly 90 percent of Lombok’s infrastructure. KOMPAK’s ongoing work focuses on providing improved local access to education and technical and vocational training, basic health care, and civil registration programs, with a goal of creating an environment where inclusive local economic development can take place.
These fantastic socioeconomic initiatives, coupled with government-supported economic growth projects such as the Mandalika SEZ, led to a pre-COVID 20 percent yearly increase in Lombok tourism, which is starting to get back on track.
Do you understand why we call it the Sleeping Giant? It’s because the island of Lombok will continue to receive heavy infrastructure, economic, and social investments, both privately and from governments.
So, what does this mean for property investors? Well, firstly, the window of time to buy low-priced land and/or property is rapidly closing. As little as five years ago, land prices in Lombok were 75 percent cheaper than what they are today. Even throughout COVID-19, when prices dipped, investors knew that the lull would be temporary. Ever since Indonesia reopened for tourism, prices have quickly risen, and we project that they will only continue their upward trajectory. This is where Steve Bolton’s philosophy comes in: “The only bad time to buy property is later.” This is especially true in a region that is set for exponential economic growth over the next two-to-three decades. Property in Lombok is still going for a fraction of the cost of that in Bali and even certain parts of the Gilis. Yes, prices are soaring but they are still very cheap in comparison!
The bottom line is that never has there been a more lucrative and better time to invest in property in Lombok. Two years ago, the prediction was that Indonesia would be the world’s fifth largest economy by 2030. Now, despite the global economic slowdown related to the pandemic and ongoing war, Indonesia is predicted to become the world’s fourth largest economy by 2045, and you have the opportunity to benefit from this rapid growth while aligning with the Indonesian government’s socioeconomic development priorities.
If you are ready to invest in land or property in Lombok, we can assure you that recent, transparency-enhancing government systems changes have made the process that much easier and safer. This is further strengthened by the fact that, today, you are spoilt for choice when it comes to choosing a good and credible real estate brokerage to assist you. Yes, in most cases, it will cost you a 5 percent commission, but let’s not forget that the main goal of these brokerages is to ensure a safe, secure and simplified platform from which you can comfortably invest and be advised. In fact, I believe that with all of the development opportunities in Lombok, never has there been a greater need for real estate agencies that can provide genuine good due diligence, transparent systems and processes, and strong after-investment management, whether it’s assisting new investors with managing their PMA, taxes or property maintenance and rentals.
So, if you are looking at land or other potential properties in and around the island of Lombok or the Gilis, have a chat with us here at Palm View Properties. We will advise you on which is the best option to help you meet your personal and investment goals. Palm View Properties works closely with companies like Seven Stones Indonesia who, for the past few years, have also started to realize the potential the island of Lombok holds for real estate investors and developers alike.
Get in touch with us via email at firstname.lastname@example.org and book your virtual consultation now!