Understanding the Indonesian undeveloped land market, particularly for regions like Derawan, requires a precise approach. While ‘Derawan Land Investment’ is a specific brand or project name rather than a recognised asset class, the broader Indonesian and Balinese real estate market provides the essential framework for 2027 investment strategies.
The Ultimate Beginner’s Guide to Buying Undeveloped Land in Derawan for 2027 Investors
For investors considering undeveloped land in Indonesia, especially within emerging coastal regions such as Derawan, a clear understanding of market dynamics and regulatory frameworks is crucial. Derawan Land Investment, as a specialist advisory, guides foreign and domestic investors through this landscape, focusing on factual data and robust compliance.
1. Indonesia Real Estate & Land Market Overview (2025–2027)
The Indonesian real estate market demonstrates consistent growth. Total market valuations were approximately USD 100.4 billion in 2025, with projections indicating a rise to USD 156.2 billion by 2034, reflecting a Compound Annual Growth Rate (CAGR) of 5.03% from 2026–2034. Other analyses estimate the market at USD 149.2 billion in 2024, USD 169.9 billion in 2025, and forecast USD 248.7 billion by 2030, with a 7.9% CAGR from 2025–2030.
Residential real estate consistently holds the largest share, approximately 58% in 2025, with commercial and industrial properties comprising the remainder. These forecasts collectively suggest an annual growth rate for the wider real estate and land market between 5% and 8% through 2030. This implies an approximate annual increase of USD 8–12 billion in national real estate value for 2026–2027.
2. Commercial Land-Linked Real Estate in Indonesia
Commercial real estate, which includes land for offices, retail, logistics, hospitality, and mixed-use developments, presents distinct investment opportunities. The Indonesian commercial real estate market was valued at USD 26.88 billion in 2025, increasing to USD 28.55 billion in 2026, with projections reaching USD 39.02 billion by 2031 at a 6.22% CAGR from 2026–2031.
Offices constituted 39.45% of the commercial market share in 2025. Rental income generated 62% of commercial real estate revenue. Logistics is the fastest-growing subsector, with a 9.12% CAGR. While Jakarta accounts for 25.2% of commercial real estate, the ‘Rest of Indonesia’—encompassing Bali and other secondary cities—is projected to grow faster, at an 11.22% CAGR until 2031. This accelerated growth outside the capital is particularly relevant for undeveloped land investors in regions like Derawan, where tourism and related infrastructure are expanding.
3. Bali Real Estate & Land Market Insights (2025–2027)
Bali, a primary comparator for Derawan’s potential, demonstrates robust growth. Its real estate market was valued at USD 2.6 billion in 2025 and is projected to reach USD 3.6 billion by 2030, with a 6.5% CAGR. Residential property holds the largest share at 48%, followed by hospitality at 31% and commercial at 14%. The hospitality sector is expanding at a 7.5% CAGR, indicating demand for land suitable for tourism development.
Property prices in Bali increased by 8.2% in 2023 and are forecast to rise by 7.5% in 2024. Despite this, they remain approximately 20-30% below pre-pandemic levels in certain segments, suggesting potential for capital appreciation. Land prices in prime areas of Bali, such as Canggu, Seminyak, and Uluwatu, range from USD 800 to USD 2,500 per square metre. Secondary locations offer prices between USD 200 and USD 700 per square metre. These figures provide a benchmark for evaluating undeveloped land in emerging coastal regions, where initial prices may be lower but growth potential is significant.
2027 Note:
By 2027, infrastructure projects connecting major Indonesian islands and improving regional accessibility are expected to be further advanced. Investors should monitor developments in transportation links to Derawan and surrounding areas, as improved access directly influences land valuation and development viability for tourism and logistical purposes.
4. Foreign Ownership & Investment Regulations for Land in Indonesia
Foreign individuals cannot directly own freehold land (Hak Milik) in Indonesia. However, foreign investors can acquire land rights through various legal structures:
- Right to Build (Hak Guna Bangunan – HGB): This right allows foreign-owned companies (PT PMA) to construct and own buildings on state-owned land or land owned by an Indonesian citizen. HGB is typically granted for an initial term of 30 years, extendable for 20 years, and then renewable for another 30 years, totalling 80 years.
- Right to Use (Hak Pakai): This right grants foreign individuals or PT PMAs the right to use land for a specific purpose. For foreign individuals residing in Indonesia, Hak Pakai can be granted for an initial 30 years, extendable for 20 years, and renewable for another 30 years.
- Leasehold (Sewa): Foreigners can lease land from an Indonesian landowner for a specified period, typically 25 to 30 years, with options for extension. This is a common structure for private villas and smaller developments.
These regulations are critical for structuring an investment in undeveloped land to ensure compliance and secure long-term rights. Derawan Land Investment advises on the optimal structure based on investment goals and risk appetite.
5. Due Diligence and Permitting for Undeveloped Land
Thorough due diligence is paramount when acquiring undeveloped land. This includes:
- Land Title Verification: Confirming the authenticity and clarity of the land title (Sertifikat Tanah) and ensuring it is free from encumbrances or disputes.
- Zoning and Spatial Planning: Verifying the land’s designated zoning (e.g., residential, commercial, tourism, green belt) and ensuring it aligns with the intended development plan. Land in Derawan will have specific spatial plans that dictate allowable uses and building densities.
- Environmental Impact Assessment (AMDAL): For larger developments, an AMDAL is required to assess and mitigate environmental impacts.
- Permits and Licences: Securing necessary permits such as Izin Mendirikan Bangunan (IMB – Building Permit), Izin Lokasi (Location Permit), and other operational licences.
The process can be complex, involving local government bodies and national agencies. Engaging local legal counsel and property advisors is essential to navigate these requirements efficiently.
6. Market Segments for Undeveloped Land Investment
Undeveloped land in regions like Derawan can be acquired for various purposes:
- Hospitality Development: Given Derawan’s appeal as a diving and eco-tourism destination, land suitable for resorts, boutique hotels, or eco-lodges is highly sought after.
- Residential Development: For villas, private residences, or residential complexes targeting long-term residents or holidaymakers.
- Commercial/Mixed-Use: Land for retail spaces, dining establishments, or integrated developments that serve both tourists and the local community.
- Long-Term Land Banking: Acquiring land with the intention of holding it for future appreciation, without immediate development plans. This strategy relies on projected infrastructure improvements and regional growth.
The choice of segment influences the required land size, location specifics, and regulatory considerations.
7. Key Considerations for Derawan
While specific market size data for ‘Derawan Land Investment’ as a distinct asset class is not available, its potential is contextualised by broader Indonesian trends:
- Tourism Growth: Derawan Islands are a significant marine tourism destination. This drives demand for land suitable for accommodation and related services.
- Infrastructure Development: Ongoing and planned infrastructure improvements in East Kalimantan, including airports and road networks, will enhance accessibility to Derawan, positively impacting land values.
- Environmental Sensitivity: As an eco-tourism destination, development in Derawan is subject to stringent environmental regulations. Investors must ensure projects align with sustainability principles.
The following table summarises typical land types and their potential applications:
| Land Type | Potential Use in Derawan | Regulatory Focus |
|---|---|---|
| Coastal Frontage | Resorts, beach clubs, luxury villas | Environmental impact, setback rules, tourism zoning |
| Inland & Elevated | Residential villas, boutique hotels, eco-lodges | Building density, access roads, water/electricity infrastructure |
| Commercial Hub | Retail, restaurants, service centres | Commercial zoning, traffic flow, local business integration |
Investing in undeveloped land in Derawan for 2027 requires a strategic approach, informed by national and regional market data, coupled with a deep understanding of local regulations. Derawan Land Investment provides the expertise to navigate these complexities, ensuring a compliant and potentially lucrative investment.
For a detailed discussion tailored to your investment objectives, book an investment consultation on WhatsApp with Sari Kusuma, your Derawan coastal property advisor.
Continue reading: Derawan Land Investment Company 2027: Choosing the Right Partner for Acquisition and Development · Derawan Land Investment Cost Breakdown 2027: Notary Fees, Surveying, and Exit Strategy Costs · Financing Payment