- One of the last remaining beachfront development opportunities in Canggu, Bali
- 6 – 9 months delay to avoid increased construction costs
- Bali expected to make a strong recovery
One of the last remaining beachfront development opportunities in Canggu, Bali, Tu Casa has a land area of 11,880 square metres and is located in the highly desirable Pererenan region, neighbouring the well-known ‘Canggu’.
Australian-Bali property developer JMGM has optioned the site and has been working on refining the current planning, management agreement, and leasehold interest; the site is 50% freehold, with the remaining 50% of the site on a 50 year leasehold agreement.
International interest, Australian fervour
The unique offering has unsurprisingly drawn the eyes of multiple global operators, Selin Ince, Senior Executive, Hotels at Savills Australia said, “W Hotel and Potato Head are considered to be comparable types of hotels/facilities which have valuations of $430,000 USD per key”.
Nick Lower, State Director, NSW & VIC Hotels at Savills Australia, told The Property Tribune:
“We’re finding a lot of the Australian interest is quite aggressive, and closely considering this, especially in the Australian market’s view, we’re all of the opinion Bali will bounce back and recover relatively quickly, in light of everything that’s happened.
“We’ve been very pleased with the really strong level of interest from operators that are looking to diversify their portfolio and exposure, and offer something relatively unique, it’s not every day you get good opportunities in foreign markets that you have a level of comfort with, especially waterfront assets,” added Mr Lower.
Rare and resplendent
The landholding is located in one of the island’s most desired locations, Mr Lower noted that specific to that region, the property is one of the last beach fronted landholdings.
“… that alone has allowed us to gauge interest from a lot of large scale hospitality and accommodation operators across the globe. It’s very much on there because it’s such a unique offering in a very active hospitality market in Canggu.”
Ms Ince also recalled friends who found it particularly difficult to secure desirable property in the idyllic tourism destination:
“I think they’re actually running out of land in Bali. Prior to Covid, property prices for villas, in particular, were quite expensive.
“I had a colleague who was looking to buy a villa in Bali and couldn’t get into the market because it was deemed to be quite dear for what they were getting.”
Ms Ince said the globally integrated business is very much that, integrated, allowing for seamless operations.
“We have found there are synergies with regards to culture and reaching out to clients because we are such an integrated business.
“If we do ever need or want to reach out to someone because we all are across each other’s pockets, we’ve found it’s a relatively seamless process; we’ve got men on the ground, one in London that’s working on this [Canggu], Kevin Murtagh in Indonesia, and us in Sydney, so all the bases are covered.”
As Australians continue to lament construction delays arising from materials and labour shortages, Bali is experiencing the same issue, indeed more so, according to Mr Lower.
“Here in Australia, we’re talking about a 3 – 6 month lag to move past the increased hike in costs, in Bali, it’s probably more like a 6 – 9 months delay to avoid increased costs.”
“That’s obviously one of the considerations if someone were to buy Canggu today. One of the conversations we’re having is, ‘what is a realistic timeline to start building to try and avoid some of these increases in construction costs?’.”
Mr Lower added that these are all moving parts.
As the tourism focussed city slowly recovers, pending the surfacing of other Covid variants, investors are expecting a strong recovery.
Mr Lower told The Property Tribune, “We’re seeing a relatively strong recovery in all the major regional tourism destinations across Australia.”
“We’re confident Bali is going to see a strong recovery. Once people return to a normal level of travel, there will be a slightly slower uptake of confidence. I think it’ll take a bit of time for people to comfortably get on a plane to places like Bali, but being so close to Australia, we’re confident that that recovery will happen quickly.”