The Bali commercial property market is at risk of adverse effects from the current global financial crisis because many developments are funded by US and European banks. The following will allow investors to make an informed decision on whether the Bali commercial property market meets their strategic investment objectives:

Foreigners are able to invest in the Bali commercial property market. Three options to legally secure a property in Indonesia are i) Leasehold Investment, where the rights are negotiated with landowner ii) Indonesian Nominee Power of Attorney Agreement, which requires an Indonesian nominee to be the registered owner iii) PMA Foreign Investment Company Structure, where the foreign corporation owns the property without requiring an Indonesian partner.

According the Bali Tourism Board, more than 2.2 million tourists visited Bali in 2009, which is a 13% year-on-year increase. Further, the board reports that between January and March 2010, there were a total of 465,132 visitors (up 18.4% from the same time last year). The strength of the tourism sector is an important element to maintain investor sentiment and demand for Bali commercial property.

The commercial property market is also experiencing a consutruction boom, with new offices and retail outlets being under construction. Following Indonesian GDP growth of 6.06% in 2008, reaching a value of US$514 billion (World Bank), the Indonesian Economy is expected to grow by 5.2% in 2010, while GDP in 2009 is meant to conclude at 4.3%.

According to BCI Asia, which provides data to the building and construction industry, the scheduled commencements of new buildings (building starts) for the combined region of Hong Kong and Southeast Asia are 35% higher, by floor area, as at 1 October 2008 compared to a year earlier. The strongest growth rate of 92% is from Indonesia. Commercial, or non-residential, building starts are up by 31% for the region. Indonesia is again driving the surge at with 105% increase (along with Hong Kong at 122%) (BCI Building Starts Forecast).

BCI Asia data estimates that 115 new hotels are currently under development in Indonesia. Within Indonesia, Bali dominates this construction as the site for new hotels, resorts, serviced apartments and luxury villas. Large hotel complexes are under construction in the key areas of Nusa Dua and Kuta. One of the big project underway in Bali is the Griya Shanti Hotel and Apartment within Nusa Dua’s BTDC complex. This project covers an area of seven hectares and is comprised of a 6-storey apartment building in combination with a hotel component.

International entrepreneurs and investors can maintain peace of mind over their investment by using the property management services provided by Healy Consultants. Services for the Bali commercial property market include:

Implementing appropriate security measures to protect the clients premises, employees, company hardware, along with IT requirements.

ii)

Project managing required property maintenance activities.

iii)

Arranging property insurance to ensure structure and contents of the client's new asset is covered.

iv)

Managing the process of finding tenants, including appointing and supervising a reliable agent.

For further information on the Bali commercial property market, call our Singapore office at (+65) 67350120 or contact us at email@healyconsultants.com