Gili Air: The Constrained Alternative to Bali

The Bali baseline#

The framing question is wrong before it is answered. "The next Bali" is the headline a thousand off-plan brochures have offered for a decade, and the headline misreads the structure of both markets. Bali is not a market that repeats. Gili Air is not a market that scales. Treating one as the precursor of the other collapses a real distinction into a marketing slogan.

Bali recorded approximately 6.3 million international arrivals in 2024, against 6.2 million in 2019, the prior peak (BPS-Statistics Bali Province). The 2024 figure represents a 20.1 per cent year-on-year increase on 2023 and the formal end of the pandemic-era recovery cycle. Indonesia as a whole drew 13.9 million international arrivals in the same year (BPS-Statistics Indonesia), with Bali absorbing approximately 45 per cent of the national total. The Bali provincial target for 2025 is 6.5 million.

The supply response on Bali has been elastic and continuous. Branded residential pipelines on the island now run to roughly 200 units across confirmed projects: Mandarin Oriental Bali at Bukit Pandawa, scheduled for 2027, brings 68 villas on an eight-hectare cliff site above a 110-key resort. Anantara Ubud opened in October 2024 with 85 keys and a discrete tier of 15 branded residences cascading toward a forested river valley. Aman Villas at Nusa Dua continues to trade in the secondary market at the upper bound of the island. Six Senses Uluwatu and several smaller operators are pricing into the same demand pool. Land prices in Canggu and Berawa have moved from roughly USD 321,000 to USD 484,000 per villa equivalent between early 2024 and early 2025 in the listings sample tracked by propertia.com (16,000-plus listings, April 2026). Seminyak and Canggu transact at USD 1,200 to 1,700 per square metre. Uluwatu at approximately USD 966.

Bali is a mature, supply-elastic market. It is large enough to absorb branded scale, deep enough to support an active secondary trade, and exposed enough that further expansion in the south of the island compresses the very scarcity that the brochure promises. A buyer entering Bali in 2026 is entering a market priced on demand. A buyer entering Gili Air is entering a market priced, structurally, on the absence of supply.

The Gili difference#

Gili Air is the second of three small islands off the north-west coast of Lombok, in the West Nusa Tenggara province (Nusa Tenggara Barat, NTB). Gili Trawangan is the largest and the most developed, with a long-running diving and party economy. Gili Meno, the smallest, is positioned as the quiet alternative. Gili Air sits in the middle, both in geography and in market positioning: a habitable population, an extant village layer, and a tier of boutique accommodation that has, in the past five years, drifted upmarket.

The landmass is finite in a way that Bali's is not. Gili Air is approximately 175 hectares in total area, of which a meaningful share is village, forest interior, or coastal setback. The premium tier, the beach-proximate parcels with direct frontage or one-line-back position, is a small subset of that total. There is no realistic mechanism by which the supply of this premium tier expands. Once developed, plots in the tier do not return to the market on a generational horizon.

Lombok province (NTB) recorded 3.6 million tourist arrivals in 2024, with the surge driven primarily by domestic flows (approximately 88 per cent domestic, 12 per cent international). North Lombok, the gateway to the Gili archipelago, posted the strongest growth in the province in early 2025 (+88.9 per cent cumulative against the prior year, BPS-NTB). The Gili archipelago captures a discrete share of high-end overflow from Bali, particularly from the European and Australian visitor segments that already price into multi-week stays.

The market is boutique, not branded. The branded operator that defines Bali pricing is not the operator that defines Gili Air. The scale that absorbs 68 Mandarin Oriental villas in Bukit Pandawa would saturate Gili Air in a single development cycle. The boutique scale, ten to twenty units, low rise, parcel-by-parcel, is the operative model. This is not a constraint the brochure can engineer away. It is the carrying capacity of the place.

Hak Milik, Hak Pakai, and the constitutional ceiling#

Foreign ownership of land in Indonesia is constitutionally constrained. Article 33, paragraph 3 of the 1945 Constitution vests ultimate control over land, water and natural resources in the State for the benefit of the people. The operative statute is the Basic Agrarian Law of 1960 (Undang-Undang Pokok Agraria, UUPA), and its Articles 9, 21 and 26, paragraph 2 are the binding text. Hak Milik, the closest Indonesian equivalent to full freehold, is reserved by statute for Indonesian citizens. A non-citizen cannot hold Hak Milik directly. A transaction in which a foreign buyer purports to hold Hak Milik through a nominee structure is, under Indonesian case law, void.

The recognised foreign access routes are four. First, Hak Sewa (Right to Lease), a contractual lease that runs for a negotiated term and is the simplest structure. Second, Hak Pakai (Right to Use), a statutory right held in the foreign buyer's own name, capped under the current framework at 80 years on the formula 30 + 20 + 30 years (Government Regulation 18/2021). Third, a foreign-owned company (Penanaman Modal Asing, PT PMA) that may hold Hak Guna Bangunan (Right to Build) on land it does not own outright, typically structured against a Hak Milik parcel held by an Indonesian counterparty. Fourth, holding through an Indonesian-citizen spouse, a route that has been narrowed by subsequent jurisprudence and is rarely the operative structure for an institutional buyer.

*The 80-year Hak Pakai ceiling is not a soft limit. Government Regulation 18/2021 codified the 30 + 20 + 30 formula and the consolidation procedure but did not extend the underlying constitutional rule. Hak Pakai is the longest tenure that a foreign individual can hold in their own name on Indonesian land. For an institutional structure, PT PMA holding Hak Guna Bangunan* on a 30-year primary term, renewable in two further increments, is the standard arrangement. Both routes have the same upper effective horizon: 80 years.

For Gili Air specifically, this constitutional ceiling layers over the physical ceiling. The plots that exist are physically scarce. The tenure available to a foreign buyer on those plots is statutorily capped. The two constraints compound. A buyer who enters today on a properly structured Hak Pakai or PT PMA Hak Guna Bangunan holds an asset whose underlying parcel cannot be replicated and whose tenure cannot be extended beyond the statutory horizon. The pricing implication is asymmetric: scarcity protects value, tenure caps liquidity at the long end.

The visa frame#

The Second Home Visa is the route most relevant to a property-anchored relocation. Introduced under Minister of Law and Human Rights Regulation 22/2022 and currently administered by the Directorate General of Immigration through the eVisa portal (evisa.imigrasi.go.id), the Second Home Visa allows a foreign applicant to reside in Indonesia for an initial five-year term, renewable once for a further five years, on satisfaction of one of two qualifying conditions.

The qualifying conditions are alternative, not cumulative. Either a fixed deposit of IDR 2 billion (approximately USD 126,000 to USD 130,000 at May 2026 rates) in an authorised Indonesian state bank, the funds blocked for the duration of the visa, or proof of property ownership in Indonesia at a minimum value typically cited at IDR 5 billion (approximately USD 315,000 to USD 326,000). The property route is generally read as the more flexible: the capital sits in the asset rather than in a blocked deposit, and the family members of the principal can be added on the same sponsorship.

The Golden Visa programme, introduced in 2023 and refined in 2024, sits one tier above. A ten-year Golden Visa for individual investors requires a minimum investment of USD 350,000 in qualifying instruments, with a USD 700,000 threshold for the corporate variant. For a buyer whose investment thesis is property and whose lifestyle pattern is part-year residence, the Second Home Visa is, in most cases, the operationally adequate framework.

The frame matters because residence and ownership are decoupled. A foreign buyer can hold Hak Pakai on Gili Air without holding any Indonesian residence permit. The Second Home Visa is not a precondition for the property purchase. It is the parallel framework that allows the buyer to spend the time on the asset that justifies the purchase. The two decisions, ownership structure and residence permit, are taken together but priced separately.

Branded supply on Bali, boutique on Gili#

The branded residential pipeline on Bali is one of the largest in Southeast Asia. Mandarin Oriental Bali at Bukit Pandawa is scheduled to deliver 68 branded villas across an eight-hectare cliff site for 2027, positioned above a 110-key resort, with ranges from three to six bedrooms and a dedicated owners' clubhouse. Anantara Ubud, opened October 2024, brings 15 one and two-bedroom branded residences cascading down a river valley above a 85-key resort. Aman Villas at Nusa Dua trades in the secondary market at the upper bound of the island and is not actively releasing new primary inventory. Six Senses Uluwatu, Capella Ubud and several smaller operators sit within the same competitive pool.

The implication for Gili Air is not that the branded model is unavailable. It is that the branded model is the wrong instrument for the carrying capacity of the island. A 68-villa scheme on Gili Air would saturate the premium tier of the entire island in a single cycle. The operationally sound model on a finite landmass is boutique scale: ten to twenty units, low rise, structured against the existing village layer and the carrying capacity of the marine protected area that surrounds the archipelago.

This is not a constraint that the operator can engineer away. Building density that the island cannot carry is not value creation. It is the conversion of physical scarcity into operational fragility. The operator that respects the carrying capacity is the operator that protects the value of the asset over a 30-year holding horizon. The operator that does not is the operator whose product trades at a structural discount to a properly sized scheme within a five-year window.

Climate exposure, honestly disclosed#

Climate exposure on Gili Air is real and must be disclosed at the underwriting stage. The Gili Matra Marine Protected Area, which surrounds the three Gili islands, is projected to cross the annual coral bleaching threshold from 2026 (De Clippele et al., University of Glasgow, 2023; published in the broader Indonesian MPA analysis). The same modelling identifies twelve Indonesian MPAs that will experience annual bleaching events by 2030, rising to 99 by 2044 and effectively all 161 by approximately 2075.

Sea level rise projections for the Lombok archipelago run 13 to 35 centimetres by 2050, in line with the IPCC AR6 mid-range scenarios for the West Pacific. The upper bound of that range is consequential for low-lying coastal parcels and for the existing village infrastructure on the Gilis. The underwriting response is parcel-level: setback discipline beyond the statutory minimum, elevation above the projected high-water mark, drainage capacity sized to the upper bound of the modelled range, and a light operational footprint that does not depend on continuous mainland resupply for water and waste.

The honest position is that climate exposure does not invalidate the destination thesis. It does change the underwriting variables. Asset selection at the parcel level, setback discipline and operational lightness are not optional in a scarce coastal market. They are the conditions on which the long-horizon value of the asset depends. The local community is already working on coral restoration and on adaptation pathways in the marine protected area (Gili Eco Trust and partners). The operator that integrates the adaptation work into the asset specification underwrites the asset more credibly than the operator that does not.

The operator advantage#

The Indonesian regulatory frame favours the operator with onshore capability. PT PMA structuring requires a minimum paid-up capital threshold set by BKPM (Investment Coordinating Board), an Indonesian-resident director, and a sectoral classification that aligns with the underlying activity. The Hak Guna Bangunan on a parcel held by an Indonesian counterparty requires a notarised acquisition deed (Akta Jual Beli) executed before a Land Deed Official (Pejabat Pembuat Akta Tanah, PPAT), and registration at the local Land Office (Badan Pertanahan Nasional, BPN). Permitting for construction proceeds through the Online Single Submission system and the local Izin Mendirikan Bangunan (now reframed as Building Approval, PBG, under the omnibus law).

Each of these steps is a place where a foreign buyer without local capability loses time, money, or both. The operator that holds a working PT PMA, an established notary relationship, a permitting track record at the local BPN, and a familiarity with the Lombok and NTB regional governance layer absorbs that friction inside the project budget. The buyer who attempts the same set of steps with imported counsel and no local presence does not.

The Indonesian Investment Coordinating Board (BKPM) and the Online Single Submission system have improved over the past five years. The standardisation is real and the institutional posture toward foreign investment is, on paper, more accommodating than it was in the 2010 to 2015 window. The execution layer, the actual closing and registration of an Akta Jual Beli at the BPN office in Mataram or in the relevant Lombok regency, remains a working process that benefits materially from a local operator who has done it many times. The institutional buyer who outsources this layer to a credible operator and prices the operator's spread into the deal is the buyer who underwrites the asset correctly.

What this means for the foreign buyer#

The decision frame for a Gili Air entry is not whether the market will scale. It will not. The decision frame is whether the buyer values the structural scarcity of the place above the deeper liquidity of the alternative. The deeper liquidity is on Bali. The structural scarcity is on Gili Air. The two are not substitutes. They are complements in a properly diversified Indonesian exposure.

A buyer choosing Gili Air over Bali is choosing constraint over scale. The constraints are constitutional (the Hak Milik ceiling), physical (the perimeter of a 175-hectare island), and climatic (the bleaching threshold from 2026, the SLR range to 2050). The benefits are also constitutional, physical and climatic in the same order: a tenure structure that cannot be undercut by new statute, a landmass that cannot be expanded by new entrants, and a marine ecosystem whose adaptive management is already part of the operating fabric of the place.

The institutional case rests on three observable conditions. First, a binding constraint on supply. On Gili Air, it is constitutional and physical, not policy-driven. Second, a durable and growing international demand pool. Indonesia's 13.9 million 2024 arrivals and Bali's 6.3 million both confirm the pool. NTB and Lombok's 3.6 million confirm the regional layer. Third, an operator capable of converting a scarce parcel into a finished, compliant, deliverable product. The operator advantage on Gili Air is concentrated, not commodity. There are few credible operators on the island. The buyer who entrusts the asset to one of them is underwriting against a smaller set of execution scenarios than is typical on Bali.

The marketing line writes itself and should be resisted. Gili Air is not the next Bali. The thesis does not require it to be. The thesis requires Gili Air to be itself: small, statutorily constrained, climatically exposed, operationally demanding, and structurally scarce. For the long-horizon buyer who understands that scarcity protects value more durably than scale, that is the entire proposition.

Skin in the game. Victaura, through its parent Greystone B.V. (Netherlands), holds an active commercial position on Gili Air through the Gili Air Villas project (boutique-scale, 16 villas plus a small hospitality component on approximately 3,200 square metres of consolidated parcel). Readers should assume that commentary on this market may be influenced by, or may benefit, Greystone's existing position. This document is classified as marketing material under MiFID II Article 24, paragraph 3. It is not investment advice.