Invest Islands co-founder Jack Brown talks about how his company's structure enables foreign property buyers to invest without the need for a local nominee. 

Tell us about your journey and how you ended up involved in real estate in Indonesia.

I was born in the UK, but travelled a lot early in my career and first met my business partner Kevin Deisser while working as a Business Development Manager with Marriott in Mallorca. I later relocated to Hong Kong, which provided further insight into how successful tourism islands operate and the potential opportunities they create. Mallorca and Hong Kong are clearly mature markets, so I was more interested in researching where the next tourist hotspot may be. Kevin meanwhile had moved to Lombok and when we reconnected in 2014 it all kind of fell into place.

Invest Islands has offices in Hong Kong, but you now work out of the Lombok HQ. How does living in Indonesia compare? And how does the company's foreign jurisdiction benefit clients?

Since moving to Lombok last year, the change of pace has been more than welcome. I love the fresh air and nature, and the people are very genuine. We still have eight full-time staff in the HK office and our parent company is there too, so I get back often. All transactions we complete must meet both common law and Indonesian regulations, so it provides clients with an added layer of security.

Invest Islands co-founder Jack Brown. Source: Invest Islands

What are some of the attractions of investing in Indonesia?

Like most emerging economies, Indonesia offers huge upside potential, but requires a little more input from the client. A lot of our clients are thinking of this as a lifestyle investment, especially since the global lockdown. We’ve had a growing number of conversations with digital nomads; a sector Bali capitalised on years ago and enjoyed massive growth in property sales and long-term rentals. Most people recognise though that Seminyak or Canggu can now be as expensive as Perth, so unless you have big bucks it’s no longer cost-effective. Lombok and Sumba meanwhile have adopted the Bali blueprint, but are accessible at a fraction of the cost. 

And Lombok in particular, what makes it such a smart investment?

Where to begin? It’s a beautiful natural paradise, but with grand ambitions to grow in a sustainable way. It’s only a half-hour from Bali, but feels a lifetime away in terms of the pace of life. Since the international airport opened, tourism has consistently risen and with the government creating the US$3bn Mandalika project, which will host next year’s Indonesian Moto GP, that’ll continue. Throw in incredible beaches, great food, climate, culture and low cost of living and it’s practically the full package. And, of course, land remains hugely undervalued.

How much does an investor need to buy prime land in these places? 

We start at US$35,000, which would secure you around 1,000sqm on the South Lombok coast.

How has COVID-19 affected the luxury real estate market in Indonesia?

Luxury holiday rentals have obviously halted, but we expect that to bounce back quickly once travel resumes and people seek the great outdoors more than ever. The most significant problem that COVID-19 has brought to the real estate market is the difficulty in viewings. Fortunately, we were already quite active, providing prospective clients with detailed information via drones, topography maps, and geo-reports. This, complemented by our decision last month to lower our entry-level investment, has enabled us to weather the storm relatively well.

Invest Islands co-founder Jack Brown. Source: Invest Islands

What are the two most common concerns you hear from prospective clients?

We get a lot of questions regarding the foreign ownership structure, which is why we created an e-book explainer. The law clearly states a foreign individual or company can own 100 percent of shares or assets. This can be adapted so that specific title-deeds can be assigned to specific shares, which then become an enforceable right of ownership. This legal arrangement has been working well for more than a decade. President Jokowi continues to welcome overseas investment, so the practicalities of using a “PMA” and the new online submission system are constantly improving.  

Another concern is the misperception that the local population is against development. In reality, residents are keen for tourism investment so long as it is sustainable and improves quality of life, be it through job creation, better infrastructure, healthcare, education, etc. Since we started Invest Islands, we have provided salaried jobs to close to 100 Indonesians and also have a Foundation helping the local community through various projects, such as refurbishing schools, collecting and recycling plastic waste, and providing aid packages during the pandemic.

What’s in the pipeline and will COVID-19 impact delivery? 

The biggest ongoing project we have is a 150-room beachfront resort. We’re in the final stages of design planning and the show-home will be completed later this year. The next steps may be slightly delayed as some investors want to visit first, but we expect things to remain roughly on schedule. Projections for Q3 and Q4 are positive and, like everyone, we hope to get back to something resembling normal as soon as possible.

Click here for more information about Invest Islands.

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