How to Buy Raw Land in Derawan for 2027: A Complete Step-by-Step Investment Strategy

How to Buy Raw Land in Derawan for 2027: A Complete Step-by-Step Investment Strategy

As a senior content lead for Derawan Land Investment, our objective is to provide precise, factual guidance for sophisticated investors considering raw land acquisitions in Indonesia, with a focus on areas such as Derawan. While ‘Derawan Land Investment’ functions as a brand and project name, not a distinct asset class, the underlying market dynamics for land and real estate in Indonesia, including regions like Derawan, are well-established. This guide outlines a strategy for 2027.

1. Indonesia Real Estate & Land Market Overview (2025–2027)

The broader Indonesian real estate market demonstrates consistent growth, providing a robust backdrop for land investment. The total market was valued at USD 100.4 billion in 2025, with projections reaching USD 156.2 billion by 2034, indicating a 5.03% Compound Annual Growth Rate (CAGR) 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 holds a dominant 58% market share in 2025, with commercial and industrial sectors comprising the remainder. These figures imply an annual growth in the wider real estate and land market of approximately 5–8% through 2030, translating to an increment of approximately USD 8–12 billion per year in national real estate value for 2026–2027.

2. Commercial Land-Linked Real Estate Context

For investors focused on land suitable for commercial development (offices, retail, logistics, hospitality, mixed-use), the Indonesian commercial real estate market is relevant. It was valued at USD 26.88 billion in 2025, projected to reach USD 28.55 billion in 2026, and 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, with rentals accounting for 62% of revenue. Logistics is the fastest-growing subsector at a 9.12% CAGR. Jakarta represents 25.2% of commercial real estate activity, but the “Rest of Indonesia,” which includes Bali and other secondary cities, is projected to grow faster at an 11.22% CAGR to 2031. This growth in secondary cities indicates potential for land value appreciation in regions with developing infrastructure and tourism.

3. Bali Real Estate & Land Market Specifics

Bali, while distinct from Derawan, offers a comparable investment environment in terms of tourism-driven demand. Bali’s real estate market was valued at USD 1.3 billion in 2024, with projections to reach USD 2.6 billion by 2030, at a 12.2% CAGR from 2025–2030. Residential properties account for 75% of this market, with villas and luxury properties being significant segments. Key growth drivers include tourism, foreign direct investment (FDI), and infrastructure development. Average property prices in Bali saw a 7.2% year-on-year increase in 2023, with land prices in prime areas appreciating by 10–15% annually. The average land price per square metre in prime areas of Bali ranged from USD 500–1,500 in 2024, with more remote areas at USD 100–300 per square metre. Rental yields for luxury villas were approximately 8–12% in 2024. These figures provide a useful benchmark for assessing potential returns in other coastal, tourism-focused regions like Derawan.

4. Understanding Land Ownership for Foreigners in Indonesia

Foreign individuals cannot directly own freehold land (Hak Milik) in Indonesia. The primary mechanisms for foreign investors to control land are:

• Right to Build (Hak Guna Bangunan – HGB): This right allows a foreign-owned company (PT PMA) to construct and own buildings on land for a period of 30 years, extendable for another 20 years, and then another 30 years (total 80 years). The land itself remains under freehold ownership, often by an Indonesian citizen or entity. This is the most common and secure method for foreign investors.
• Right to Use (Hak Pakai): This right grants an individual or entity, including foreigners, the right to use land for a specified period, typically 25 years, extendable for another 20 years, and then another 30 years (total 75 years). This is suitable for residential purposes or smaller commercial ventures.
• Leasehold Agreements (Sewa): A long-term lease agreement with an Indonesian landowner, typically ranging from 25 to 50 years, often with options for extension. While contractually binding, it offers less statutory protection than HGB or Hak Pakai.

For raw land acquisition with development intent, establishing a PT PMA and securing HGB is generally the most robust strategy for foreign investors.

5. Step-by-Step Investment Strategy for 2027

Phase 1: Research and Due Diligence (Q1-Q2 2026)

1. Market Analysis: Identify specific regions within Derawan or other coastal areas with suitable zoning for intended development (e.g., tourism, residential, mixed-use). Assess local infrastructure development plans, including roads, utilities, and port access.
2. Legal Framework Review: Consult with Indonesian legal counsel specialising in property law to understand the latest regulations concerning foreign investment in land, including any updates to PT PMA establishment and land rights.
3. Local Partner Identification: For complex projects or to navigate local nuances, consider identifying a reputable Indonesian partner or consultant with established local networks.

Phase 2: Site Identification and Preliminary Assessment (Q3-Q4 2026)

1. Property Sourcing: Utilise established networks, local agents, and property advisory firms like Derawan Land Investment to identify suitable raw land parcels. Focus on properties with clear land titles and appropriate zoning.
2. Initial Site Visits: Conduct thorough site visits to assess topography, accessibility, proximity to amenities, and environmental considerations.
3. Feasibility Study: Commission preliminary feasibility studies covering market demand, development costs, and projected returns for the intended use of the land.

Phase 3: Legal and Financial Structuring (Q1-Q2 2027)

1. Establish PT PMA: Incorporate a foreign-owned company (PT PMA) in Indonesia. This process involves obtaining approval from the Investment Coordinating Board (BKPM).
2. Legal Due Diligence: Conduct comprehensive legal due diligence on the selected land parcel. This includes verifying the land title (Sertifikat Hak Milik), checking for encumbrances, reviewing zoning regulations, and ensuring compliance with spatial planning (Rencana Tata Ruang Wilayah – RTRW).
3. Valuation: Obtain independent valuations of the land from certified appraisers.
4. Negotiation and Agreement: Negotiate the land price and terms with the landowner. Draft a legally binding Sale and Purchase Agreement (PPJB) with the assistance of a Notary Public (PPAT).

Phase 4: Acquisition and Title Registration (Q3-Q4 2027)

1. Payment and Transfer of Rights: Execute the land transfer at the Notary Public’s office. The Notary will facilitate the payment to the seller and oversee the signing of the Deed of Transfer (Akta Jual Beli).
2. Conversion to HGB/Hak Pakai: For PT PMAs, the newly acquired Hak Milik land must be converted into Hak Guna Bangunan (HGB) under the company’s name. This involves applying to the National Land Agency (Badan Pertanahan Nasional – BPN).
3. Registration: Register the new land title (HGB or Hak Pakai) with the BPN. This ensures the company’s legal rights are recorded.

2027 Note: Investors should anticipate potential adjustments to local spatial planning regulations (RTRW) in areas undergoing rapid development, such as coastal tourism zones. Regular consultation with local planning departments and legal counsel is crucial to ensure proposed projects remain compliant with the most current land use plans throughout 2027.

6. Key Considerations for Derawan and Coastal Regions

Investing in raw land in Derawan or similar coastal regions requires specific attention to:

• Environmental Regulations: Coastal areas are subject to strict environmental protection laws. Understand zoning for conservation, coastal setbacks, and waste management requirements.
• Infrastructure Readiness: Assess the availability and reliability of utilities (water, electricity), internet connectivity, and transportation links. Remote coastal areas may require significant investment in basic infrastructure.
• Tourism Development Plans: Align investment strategies with regional tourism development plans. Government initiatives to promote tourism can enhance land value and project viability.
• Community Engagement: Local community relations are paramount. Understand local customs and ensure projects benefit local populations, fostering long-term stability.

Table: Comparative Land Rights for Foreign Investors in Indonesia

Acquiring raw land in Indonesia, particularly in burgeoning coastal areas like Derawan, presents opportunities for capital appreciation and development. A structured approach, combining thorough due diligence with expert local guidance, is essential for successful execution. Our team at Derawan Land Investment provides the specific market insights and legal navigation required for such strategic acquisitions. For detailed analysis and to discuss your investment objectives, we invite you to book an investment consultation on WhatsApp.

Continue reading: Cost Breakdown of Investing in Derawan Land 2027: From Purchase Price to PT PMA Setup Fees · Critical Mistakes to Avoid When Buying Derawan Land for Investment in 2027 · Tax Implications