By Andrew MacKenzie

After the 2002 atrocities in Kuta people were saying, "this is a one off, Bali will learn from it and bounce back". And bounce back it did, tourist numbers recovered by the end of 2004 and the property market went into overdrive through 2005.

But, as you don't need reminding, happen again it did. In October 2005 the beautiful island people had to endure another tragic setback, not just affecting those unfortunate direct victims but also the lives of the whole population, who rely on Bali's tourism success. The interest in Bali property for pure investment purposes had all but dried up.

As we enter that time of year when one takes time to reflect on the events of 2002 and 2005, it's encouraging to witness Bali's return to normalcy. Hoteliers and tour operators have a spring in their steps again after witnessing a 'high' season which actually ended on a high and you've probably notice that the Balinese are smiling again. This month sees a major development to Bali's recovery, the opening of a brand new luxury resort, the Bvlgari, perched on the southern cliffs of the Bukit.

More on the Bvlgari in a later edition; but it is equally re-assuring to see confidence return to the property market and perhaps a fine example of this is the recent launch of Sesari, a boutique villa lifestyle estate in heart of Seminyak.

'Sesari' by the way is a small ceremonial coin used as an offering to the Gods. I asked Grant McArthur, a partner in MC²'5f, the developers of Sesari, why they decided to bring new property onto the market at a time when many others were lying empty. "We strongly believe that the demand for a home in paradise will never disappear and we are equally confident that there is no better paradise in Asia than Bali…'c9it has everything for the ultimate lifestyle"

Most of the empty property I am referring to is in the form of projects, started in 2005, but which failed to finish because they were relying on so called 'off-the-plan' sales, which never materialised. Off-the-plan indeed, they never got off-the-ground!

When a developer offers you something 'off-the-plan' what they could be saying is "we don't have the funds to complete the project on our own, so if you give us your money we will have your dream villa ready in 12 months". This is fine if there are enough willing investors, but dodgy if there aren't, particularly if you were the first and the last into an estate development!

"The 'off-the-plan' phenomenon has given many of us in the property business here a severe reality check; this is why we decided the best chance of attracting scarce investors is to offer them something finished and totally operational" Grant explained. "All 16 villa units were completed in time for this years' peak season in July and August because we felt it important to bring performing assets to the market, not just paper plans"

Developers and buyers often over look a key ingredient in the success of a rental property…'c9how will the property be managed by whom. All too often developers focus only on the physical structures, when they are asked "who is going to deliver the 25% ROI you are promising?" you hear replies like "don't worry, will have an international management company running the show". What they are probably meaning is "do worry, we haven't actually thought of the management yet, in fact my wife will probably end up doing it, she's a great cook bye the way"

"To us the ability to deliver rentals is more important than the building materials we use! Its no longer good enough to give potential investors ROI spreadsheets, you have to back up the numbers with proof of performance" This is why MC²'5f appointed Alu Bali as the company to manage Sesari. Alu have been building up a solid reputation in the Seminyak area by consistently delivering returns well into the teens at their original boutique resort, located down by the Living Room in Petitenget. "Going forward we are confidently predicting a return of 10% over the next 12 months, Alu have built strong relationships with two hundred travel partners" Grant advised, looking me in the eye, without blinking! "Given the attractive price that we are offering, buyers can expect to see their capital completely returned by 2013"

The price of a one bedroom villa at Sesari is US$185,000 and the two bedroom units are offered at US$240,000. Like much of the property in the popular Seminyak area, Sesari is available on a leasehold tenure, rather than freehold. Grant highlighted the advantages of going leasehold, "if you want this sort of location, there is really is no freehold opportunity, and besides, for a foreigner, the lease title is a legitimate and transparent form of tenure". Grant is referring to the complexities of foreigners holding freehold title (Hak Milik) in Indonesia, which they can't. Foreigners can enjoy the material benefits of freehold property by collaborating with an Indonesian citizen (known as the 'nominee'); by setting up a 'right to use' structure via a foreign investment company (called PMA) or a 'right to use' title from the Indonesian freeholder (known as Hak Pakai)

Sesari are offering an initial 35 year paid up lease with the opportunity to extend at a later date, this will see most of us through our lives and with a six year payback you get twenty nine years of clear income.

I think the main attraction of Sesari is that buyers can almost test drive their investment before they buy, and when they do purchase, immediate usage and return can be experienced. "We are so confident that you will want to become a Sesari owner that we'll deduct your total bill from the purchase price" sounds like a free holiday to me Grant!

If you want to take Grant up on his offer, you can arrange for an inspection by contacting their agents Exotiq Real Estate on (0361) 737 358, or seminyakbali@exotiqrealestate.com

Happy holidays!