The View From the Beach

Groundbreaking for the LIV Bali property development on beautiful Jimbaran Bay was held this last Sunday.

With a mixed crowd of local dignitaries, foreign nationals, buyers and prospects on hand, the ceremonies began bright and early and proceeded through midday. Live entertainment followed the formal ceremonies where the local template blessed the site and the endeavor. Local media was also out in force for the event, with coverage from both print publications and local Television.

The LIV project is a milestone for the re-development of Jimbaran Bay. The project launch follows fresh on the heels of the completion of the first stage of the renovation of Jimbaran Bay and the re-opening of the first of the seafood restaurants on the bay - located just across the street from LIV. Next round of development will see the creation of a local communtiy and arts center and the renovation of the fish markets further down the Bay.

LIV features 29 units and a variety of facilities, including Jimbaran Bay’s first beach club. Project pre-sales exceeded 60% in advance of the launch. The project will be managed by BHM and the Head Sales Agency is held by Elite Havens. You can learn more about the project online at www.LIVBali.com.

The Elite Havens Group, one of Bali’s best known brand names, has opened a new sales office in the fashionable Oberoi district. The move comes on the heels of the group opening a new dedicated sales website and signals what appears to be a more aggressive market stance from the luxury market leader.

“We’ve had a great year, but our operation has always suffered a bit from a low profile office,” states Matthew Georgeson, head of Sales at Elite Havens. “We’re more visible in this area and expect both a boost to our brand recognition and to our walk-in traffic.”

The new office, sporting a colonial style and a wide veranda, is located on the same street as competitors Paradise Property, Exotiq, C151, and virtually next door to new-comer Royalty Property. “We’re known as a luxury brand. In line with that the Oberoi office is the largest and most prestigious in the area. We’ve made a real effort to distance ourselves from the competition,” noted Georgeson.

Visit them in Oberoi at 18c Jalan Laksmana or online at www.EliteHavensSales.com

The last several years have witnessed a significant increase in development, particularly relating to vacation villa housing. The trend continues and indeed is strengthening. Some commentators have speculated that there are as many as 40 multi-unit villa developments on the books which will add hundreds of bedrooms to the inventory on the market. Now add to that number, probably by a factor of 2x or 3x, the stand-alone villas under construction and you start to get a good idea of the feeding frenzy we’re seeing at this moment.

When is enough? How much is too much? People are starting to ask these questions, but I have to wonder whether the are even the right questions…

Initially let’s take a crack at the validity of the numbers. While the property marketeers are out there flogging at least 40 developments, the reality of the situation sees perhaps only 2 dozen viable projects. Of those two dozen, only a portion actually have spades in the dirt. The development game loves to sell off the plan, when at all possible. That invariably means some plans never materialize due to changing market conditions, lack of interest, etc. The point being: Don’t let the commercial multi-unit developments number fool you. We’re not anywhere near the lunacy one observes in places like Phuket.

Next, let’s factor out the hotels who have jumped on the villa bandwagon and are constructing villa-type accommodations under their hotel brands. These units just don’t come into this analysis — these are hotels, people! The hotel market is a thing unto itself with market characteristics that are distinct from the villa business. (Arguably some of the multi-unit complexes passing themselves off as villas are hotels, too, but that is a topic for another post!)

On the subject of the individual villas under construction, one must keep in mind that this is not a coherent market. Individual villa construction is driven by private owners who exhibit a wide range of motivations, from pure investment to pure whimsy. Generalizing about the individual villa market is fraught with peril. About the best one can safely say is that some of these villas will enter the commercial market — and that’s a slim reed from which to hang any meaningful trend analysis. Their impact on the market long-term, in other words, is extremely hard to predict.

The potential for over-development is a threat primarily in two key areas: burden on infrastructure and the environment, and impact on the market. In the next couple of posts I will take a look at both these topics.

Stay tuned…

Off to another villa open house in a few minutes. This time we’re headed to Villa Mako. This villa has an interesting story: The owners are long time Bali afficionados. They lived here in the region, working out of, I believe Hong Kong (or Singapore?) and had considered building The Bali Dream Home for ages. Finally, though, they found an existing house on a great piece of land and decided to renovate — a virtually unheard of decision here. (They bought from Elite Havens, by the way!).

They went through a couple of developers before they found the right partner, but they eventually got it right. The result is lovely. It is really a tribute to perserverance, dedication to a vision and a job well done.

The photo, above is may favorite of the first set of images — I think because I know the place and to me this sort of casual, relaxed elegance totally describes the place. Makes you want to hang out there. Chill.

The property is managed by BHM and will now be open for rental. It will see it’s first commercial guests this Christmas. ’twere it I….

‘Tis the season, or rather, nearly so. The Christmas/New Years’ period is one of the island’s two tradition Peak Seasons (the other being August). Looking at the number, 2006 is shaping up to be an excellent year. While it is doubtful Elite Havens will exceed the record 2005 performance, we will get very very close.

The strength of the seasonal bookings is consistent with the way the market here has firmed up across 2006. The first Quarter put on a very poor showing, but things began to bounce back in Q2; by Q3 things were moving at an excellent rate.

Looking forward, the first Quarter of 2007 is already showing signs of out-perfoming the same period in both 2006 and 2005. We’re keeping our fingers crossed, but the Bali market seems to be very resilient to disruption — particularly at the luxury end of the market where we tend to focus all our activities.

The trends hold true both for our agency business (Elite Havens) and our wholesale business (BHM). But, in all fairness, BHM’s gains are also partially attributable to the increase in inventory in 2006 — we’ve basically doubled the size of the catalog — and to the increase in the number of agents in our network.

Rentals is not the only group that is doing well as we move through the last Quarter; Sales enquiry volumes are up. The sales market is complex and there are a variety of factors at work here. Certainly, though, we’re getting a boost from our new sales website, www.EliteHavensSales.com, which began generating a phenomenal number of page views right out of the gate (over 1,000 pages a day in its first month — amazing).

Adding it all up, I can’t help but reach the conclusion that Bali villas, Bali vacations and Bali properties are hot again. I plan to sit back, be merry and enjoy the season.