Derawan Land Investment, as a term, does not represent a standalone asset class in Indonesia as of 2025–2026. However, Indonesia’s broader real estate market, including coastal regions relevant to Derawan, demonstrates consistent growth, projected at 5–8% annually through 2030, offering a robust environment for land-linked investments.
Derawan Island Land Investment: A Step-by-Step Guide for Foreigners in 2027
Indonesia’s real estate and land market continues to attract significant foreign direct investment. While ‘Derawan Land Investment’ functions as a brand for specific projects, understanding the overarching Indonesian investment landscape is crucial. This guide outlines the process for foreign investors considering land acquisitions in Indonesia, including regions like Derawan, in 2027.
Indonesia Real Estate & Land Market Overview (2025–2027)
The Indonesian real estate market exhibits strong growth trajectories. In 2025, the total market was valued at USD 100.4 billion, with projections indicating a rise to USD 156.2 billion by 2034, reflecting a 5.03% Compound Annual Growth Rate (CAGR) from 2026–2034. Other analyses estimate the market at USD 169.9 billion in 2025, potentially reaching USD 248.7 billion by 2030, at a 7.9% CAGR from 2025–2030.
Residential real estate constitutes the largest segment, holding 58% of the market share in 2025. Commercial and industrial properties account for the remainder. Overall, annual growth in the wider real estate and land market is anticipated to be approximately 5–8% through 2030, suggesting an increment of USD 8–12 billion annually in national real estate value between 2026 and 2027.
Commercial Land-Linked Real Estate Context
For land underpinning commercial ventures such as offices, retail, logistics, hospitality, and mixed-use developments, the Indonesian commercial real estate market was valued at USD 26.88 billion in 2025, growing to USD 28.55 billion in 2026. It is projected to reach USD 39.02 billion by 2031, at a 6.22% CAGR from 2026–2031. Offices represented 39.45% of the commercial market share in 2025, with rentals generating 62% of revenue. Logistics is the fastest-growing subsector, with a 9.12% CAGR.
Jakarta contributes 25.2% to commercial real estate activity; however, the ‘Rest of Indonesia,’ encompassing regions like Bali and other secondary cities, is projected for faster growth at an 11.22% CAGR until 2031. This growth trajectory is particularly relevant for land investors targeting tourist-centric or emerging commercial zones.
Bali Real Estate & Land Market (2025–2027)
Bali, a primary target for foreign real estate investment, is experiencing significant expansion. The Bali real estate market was valued at USD 2.6 billion in 2024, projected to reach USD 4.9 billion by 2029 at a 13.5% CAGR. Residential properties dominate, holding 59% of the market, with luxury residential units (priced above USD 750,000) growing at a 15.2% CAGR.
Land prices in prime Bali locations have seen substantial appreciation. Between 2018 and 2023, land prices in Canggu increased by approximately 200%, in Pererenan by 180%, and in Uluwatu by 150%. Forecasts indicate continued appreciation of 8–12% per annum in high-demand areas. Rental yields in Bali average 6–8% for villas and 4–6% for apartments, with luxury villas in prime areas achieving 10–12%.
2027 Note: By 2027, the implementation of the new National Capital City (IKN) in East Kalimantan is expected to further stimulate infrastructure development and economic activity in Kalimantan and surrounding areas, potentially influencing land values in nearby regions such as Derawan Island due to improved connectivity and regional investment focus.
Foreign Land Ownership Regulations in Indonesia
Foreigners cannot directly own freehold (Hak Milik) land in Indonesia. However, several legal structures facilitate long-term control and investment:
- Right to Build (Hak Guna Bangunan – HGB): This right grants the holder the ability to construct and own buildings on state land, freehold land, or Hak Pengelolaan (Right to Manage) land. The initial term is typically 30 years, extendable for another 20 years, and then renewable for an additional 30 years, providing up to 80 years of control.
- Right to Use (Hak Pakai): This right permits the use of state land or freehold land for a specified period. It is commonly used by foreign individuals or foreign-owned companies (PT PMA) for residential or commercial purposes. The initial term is usually 25 years, extendable for another 20 years, and then renewable for an additional 30 years, offering up to 75 years of control.
- Foreign-Owned Company (PT PMA): Establishing a PT PMA is the most common and secure method for foreign entities to acquire land rights (HGB or Hak Pakai) in Indonesia. A PT PMA is an Indonesian legal entity, allowing it to hold these land titles directly.
- Leasehold Agreements: Foreigners can enter into long-term lease agreements (Hak Sewa) for land, typically ranging from 25 to 50 years, with options for extension. This provides operational control without ownership of the land title.
It is crucial to conduct thorough due diligence and seek legal counsel to ensure compliance with Indonesian agrarian laws and to structure the investment appropriately.
Step-by-Step Guide to Derawan Island Land Investment for Foreigners in 2027
For investors considering land in regions like Derawan, particularly in 2027, the following steps are advised:
1. Market Research and Due Diligence
Begin with comprehensive market research specific to the Derawan region. While ‘Derawan Land Investment’ is a specific brand, understanding local land values, zoning regulations, and development plans is critical. Engage local advisors for due diligence on land titles, ownership history, and potential encumbrances. Verify all permits and licenses, especially for commercial or hospitality developments.
2. Legal Structure Establishment
Determine the appropriate legal structure for your investment. For significant land acquisitions, establishing a PT PMA (Perseroan Terbatas Penanaman Modal Asing) is generally recommended. This entity will hold the land rights (HGB or Hak Pakai) and provide a robust legal framework for your operations. Consult with corporate and agrarian law specialists to ensure correct setup and compliance with Indonesian investment regulations.
3. Site Identification and Negotiation
Identify suitable land parcels that align with your investment objectives. Factors to consider include proximity to infrastructure, access to utilities, development potential, and environmental considerations. Engage in direct negotiations with landowners or their authorised representatives. Ensure all agreements are documented in writing and reviewed by legal counsel before any commitments are made.
4. Land Acquisition Process
Once a suitable parcel is identified and terms are agreed upon, the land acquisition process involves several stages:
- Binding Agreement: Sign a Sale and Purchase Agreement (PJB) with the seller, typically facilitated by a Notary Public (PPAT).
- Payment: Structure payment terms according to the PJB.
- Transfer of Rights: The PPAT will process the transfer of land rights at the local Land Office (Badan Pertanahan Nasional – BPN). For HGB or Hak Pakai, this involves registering the new rights holder under the PT PMA.
- Certificates: Obtain the new land certificate bearing the PT PMA’s name and the specific land right.
This process requires meticulous attention to detail and adherence to legal protocols.
5. Permitting and Development
After securing the land rights, obtain all necessary permits for any proposed development. This includes building permits (PBG, formerly IMB), environmental impact assessments (AMDAL or UKL-UPL), and business operational licenses. The regulatory environment can be complex, and working with experienced local consultants is essential to navigate the permitting process efficiently. Ensure compliance with local zoning and spatial planning regulations.
6. Post-Acquisition Management
Ongoing management of the land and any developed properties is critical. This includes property management, financial reporting, and compliance with all Indonesian tax and corporate regulations. Regular monitoring of the local market and adapting strategies as needed will ensure the long-term success of the investment.
| Investment Method | Foreign Control | Typical Term | Renewal/Extension |
|---|---|---|---|
| Hak Guna Bangunan (HGB) | Indirect (via PT PMA) | 30 years | 20 years + 30 years |
| Hak Pakai | Indirect (via PT PMA/individual) | 25 years | 20 years + 30 years |
| Leasehold (Hak Sewa) | Direct (contractual) | 25-50 years | Negotiable |
| PT PMA (for HGB/Hak Pakai) | Direct (entity ownership) | N/A (entity holds rights) | N/A |
Investing in Indonesian land, including regions with emerging potential like Derawan, requires a structured approach and adherence to legal frameworks. With Indonesia’s projected economic growth and increasing investment in infrastructure, strategic land acquisition in 2027 presents opportunities for discerning investors. Our firm provides expert advisory services to navigate these complexities.
To discuss your specific investment goals and receive tailored guidance on land opportunities in Indonesia, book an investment consultation on WhatsApp with Sari Kusuma, Derawan coastal property advisor.
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