Over the last two years, Bali’s neighbor to the east has been steadily emerging as the next great real estate frontier in Indonesia.
Lombok’s status as a destination has long been tethered to Bali. For many western tourists it has functioned as a tag-on to their Bali vacation – whether for surfers seeking uncluttered breaks in Kuta, south Lombok (not to be confused with its party-central namesake in Bali), package tourists looking for a languid three star break in Senggigi, the island’s most developed resort area, or high end tourists who want the beauty and seclusion of resorts like the Novotel (Kuta) or the Oberoi (in Tanjung, just north of Senggigi).
Most people who visit Lombok for the first time are struck by the sheer beauty of the island. Unlike Bali, bone white beaches and turquoise waters are the norm here and virtually everywhere you go, Mount Rinjani – at 3,726 meters, Indonesia’s second highest volcano – hoves dramatically into view. The lack of intensive development to date gives the island a laid back feel, leading many to describe it as being ‘like Bali, but as it was 20 years ago.’
Until recently, Lombok’s tourism infrastructure was almost exclusively centered on the west coast resort of Senggigi, north of Mataram, the island’s somewhat shambolic capital. But Senggigi was hit hard first by religious riots in January 2000 (a by-product of the shaky years that followed Indonesia’s shift to democracy) and then by the Bali bombing in 2002.
There are signs, however, that Senggigi is ready to embrace the villa trend that has been such a feature of real estate development in Bali over the last decade. Qunci Villas and sister resort Qunci Pool Villas, which opened in July 2008, offer a sharp contrast to the guesthouses and high capacity hotels that have long characterized
Senggigi – think beachfront minimalism of the higher end variety. Owner Scott Coffey, an ex banker, also owns a sprawling property on the hills overlooking the ocean as well as two adjacent properties that are available to rent. Both beachfront and hilltop plots remain available in the area, while a small number of private villa rentals have already opened.
The market in Senggigi is largely focused on second homeowners – the kind of people that are finding Bali too saturated. North of Senggigi on the peninsula of Medana the new Tugu Lombok hotel, a beachfront resort that celebrates the culture and heritage of both Lombok and Bali whilst offering a 5 star experience to its guests, has joined the trailblazing Oberoi, which opened 12 years ago.
This has encouraged investment and much of the beachfront land here has already been snapped up. You’ll also find one of Lombok’s foremost villa rental properties here, The Anandita, a Bali style abode with separate residences set in a garden compound, managed by Bali based Elite Havens.
But the most exciting action in this area has been on three tiny atolls just off the coast. They are known as the Gili Islands – (a tautology since gili means small island) and they are now among Lombok’s most popular destinations. By far the most popular of these small atolls is Gili Trawangan – long the domain of backpackers, but now experiencing a real estate gold rush. “There’s hardly any more beachfront properties left in Gili Trawangan,” says Olivier Hanoun – “maybe two or at the most three.”
Land appreciation has been phenomenal too, with real estate prices achieving an astonishing 100% annual growth according to Hanoun. “10 years ago there were 75 beachfront plots for sale at about Rp.1,000,000 per are (100 square meters) – now the price is between 60 and 80 million.” Hanoun bought a 4 hectare plot, one of which he has sold, the other three he is subdividing.
Simon Liddiard, who opened the first dive shop in the gilis, also opened the first luxury resort on Trawangan, Villa Kelapa, which offers both investment and rental opportunities. He is now adding a clubhouse and tennis court to the property, scheduled for completion before the high season. “The owner of Kudeta [the legendary beachfront restaurant/club in Seminyak, Bali] has also bought land here,” says Hanoun – though as yet it’s unclear what he wants to do with it.
The neighboring Gili’s are also benefiting from Trawangan’s notoriety, with a rash of land sales and new developments on both Gili Meno and Gili Air.
But of course, these are tiny pieces of land (you can cycle round Trawangan in less than an hour – it’s either that or a horse and cart; no motorized vehicles are allowed here) and things are already moving swiftly towards the resale market. In the south of Lombok, however, it’s a different story.
A rather dramatic one at that. Kuta Lombok is a place actually worthy of the hackneyed word ‘breathtaking.’ A ragged buttress of parched hillocks wends its way along the coast, looking down at mile upon mile of white beaches and limpid blue waters.
When it was announced that United Arab Emirates company Emaar, a veritable giant amongst property developers, was investing in a US$600 million mixed use resort development in the area, there was an understandable hubbub.
Not only that, but part of the memorandum of understanding between Emaar and the Indonesian government stated that Lombok’s international airport – a long-standing project that has never really made it out of the blocks – would have to actually happen. All seemed to be well until Indonesian English language newspaper The Jakarta Globe ran a front page story in March announcing that Emaar was pulling out, citing unacceptable ‘delays’ on the part of the government as the reason.
"The beauty here, the quality of the beaches... it's just wow..." Michael Martin, Villas and Land Bali
“Actually, Emaar haven’t quite withdrawn yet – the latest word is that they’ve given the government 3 months to get back on track,” says Michael Martin of Villas & Land, which specializes in real estate in Kuta. The Indonesian government has requested an extension and it has been accepted.”
Still, at time of writing, things look shakey. Emaar has closed its Jakarta office and in the current financial climate, the company might be reticent about such a major investment. “There is that,” says Martin, an Australian who’s been brokering land in the area for about eight years. “But a company like Emaar really needs long-term projects to support its cash flow. It’s really about whether the government can meet its commitments.”
If Emaar do pull out, it will clearly slow things down, but Martin is convinced that Kuta will develop. “The beauty here, the quality of the beaches… it’s just wow. Of course there was an increase in investment with Emaar, but development here was inevitable.” He also reports that as of March, the nearby airport continues apace, with the terminal building beginning to rise from the plains.
Land prices have risen significantly over the last couple of years – beachfront land is already 15- 25 million per are, though most land is being sold in large plots of 2-5 hectares, according to Martin.
Still further south, in waters where precious pearls are farmed for western markets, there is another smattering of tiny islands that few visit due to their remoteness and lack of infrastructure. But even here, the development wheels are rolling.
Dharma Gili will be an exclusive eco resort on Gili Tangkong, some distance south of the existing airport in Mataram. Set to open in the first quarter of 2010, it features low impact beach huts and a restaurant/clubhouse. Investment opportunities are still available.
As development continues to spread throughout Bali, Lombok is seeing not so much a spillover from that island, but it’s very own developmental evolution.
Emaar and the airport – which if it goes ahead will be able to support two million international passengers a year – could be the key catalysts in this process, but either way, this eastern frontier looks set to become a global destination – and sooner rather than late.
By J Langenheim
