EPISODE 13:
Beware! Why We NEVER Invest in Uluwatu!

00:01
Welcome to Bali Business Club here today with Omri. Hi Gawain, how are you? Once again. Hi everyone. And today we’re talking specifically about, and we get asked this question a lot, where to buy in Bali and why Uluwatu is a, what would you say, tricky, high risk? – This is getting touchy here. – Yeah, we have riots in Uluwatu. – We’re gonna have new enemies. – Okay, so yeah, people ask us always, is Uluwatu a good place to invest? Is Sanur a good place to invest? No, it’s a lie no one asks us for Sanur

00:39
is Kedungu, of course, and other places in Bali. So today we’re gonna specifically talk about Uluwatu, actually, sorry, we’re gonna talk about the Bukit. So the Bukit, Bukit in Bahasa means the hill, or the mountain, so the Bukit is basically this peninsula here at the south of Bali, because it’s elevated, so it’s called the Bukit, or the hill, and this is what we’re going to discuss today. Let’s go. Okay, so here we are, Omri, and here is a map of Bali. I’m sure you’ve all seen this before, but

01:18
if you haven’t, maybe… Okay, so thanks, Gawain. For those who don’t know, this is Bali, right? And what we call the Bukit, I said it in the intro earlier, what we call the Bukit is that area here. It’s that small island or not really an island, the south of Bali, yeah? And it’s called the Bukit, again, because Bukit means mountain. hill, good job. So let’s increase the size here and see what we have. So basically, today, small disclaimer here, yeah? We’re going to talk about why it’s not a good idea to invest in the Bukit,

02:00
but this is just a personal opinion, yeah? It’s not… We’re not saying it’s a bad investment, we’re saying we are not investing, and we’re going to explain the reason why we’re not investing. And we get asked this a lot What about Uluwatu? All the time, yeah. So at the end of the day, it’s really up to you guys to make your own choices in life, you know? So this is our choice, and so we’re going to explain why we have invested everywhere in Indonesia, and we have in many places in Bali, but the Bukit is one place I have not

02:42
invested and I won’t invest. So in order to understand that, we need to talk about access. You know the Bukit much better than I do. You go there all the time, you go surfing. I’m going there this weekend yeah You went there this weekend? And this coming weekend I am going too So how do we access the Bukit? There are only two ways to go from the north part of Bali to the south part of Bali, and those ways are the Jalan Sunset here, that changed its name, OK, boom, and the other way is the toll road that

03:17
goes from here to here, OK? Those are the only two access points to all of this, yeah? Unless you come by boat, maybe around here, there’s no way on the road to access the Bukit except by helicopter. So the Bukit has been very, very popular lately, especially this area here, Bingin, Balangan, so all of this here, boom, very, very, very popular. Before the COVID, nobody cared. And then COVID happened it was a desert, there was nothing, yeah? I mean, that’s not true. There were a few restaurants,

04:07
but there were a lot of beaches that nobody knew about it. Remember, at Baliprod, we used to shoot in Thomas Beach all the time. There was no one. There was sometimes only us on the beach, literally, for hours. So anyway, that’s not the case anymore. But then COVID finished and people suddenly, there was this huge interest for the Bukit and it started with Bingin. Bingin was the hotspot, for sure. Yeah, definitely. Everything built around Bingin, yeah. Yeah, absolutely, yeah. So, which is a lovely

04:40
place. I like Bingin. Fish barbecues on the beach, sunsets are amazing. Yeah, absolutely, yeah. So right now, it’s very, very crowded here. Yeah. It’s still fairly not crowded… Oh, sorry. Not crowded around here, where until we’re here, about. And some places inside, yeah. This is fairly… I mean, basically, OK, where it’s green. It’s where you don’t have houses, yeah. Which is also a hotspot we’ve spoken about this many times. So surf spots. So Balangan, great surf spot. Bingin, great. Impossibles, Padang, and then Uluwatu.

05:24
So I would say maybe five, six years ago, Uluwatu was remote, a little bit uncomfortable to go to, like the restaurants, there was a couple of warungs, it wasn’t well-catered for. That hit the tipping point, where it’s become popular, easy to get to, relatively, which we can touch on, but well-catered for. So nice restaurants, beautiful hotels, nice developments. But this has a dark side, which will get to know the access. Yeah, access, yeah. And basically, we’ve seen it lately. All the major anchor brands of Canggu

06:02
have set up shop in Uluwatu All the big restaurants that you know of, like Mason, and Black Sands, and… Yeah, Black Sands. Everybody’s going there. So basically, it’s a… It’s basically a copycat… Besides the shore it’s a copycat of what Canggu is, like inland, I mean. I don’t see much difference between Batu Bolong Street and the main, you know, Jalan Uluwatu. True, for sure. Exactly the same shops, same restaurants, same thing. Same big developments, same Mediterranean vibes, and all that kind of stuff.

06:37
Yeah, absolutely. And don’t get me wrong, I mean, I know we’re going to start saying bad stuff about the Bukit but the place is beautiful. There’s no question. The best beaches in Bali are definitely on the Bukit. You have white sand, it’s absolutely stunning. It’s clean. The views, yeah, it’s clean. I mean, some places aren’t but some places are… The views from the top of the hill are absolutely mind-blowing. It’s crazy if you’re lucky enough to have a villa with a nice view, and no one blocking this view.

07:11
I mean, it’s really, really beautiful. And then, of course, the surf, I’m not a surfer, but you, sir… I tried. I tried. Was a surfer, were a surfer. So let’s go down to the bad side, yeah. So let’s go down this rabbit hole of… The dark side. The dark side of Bukit. Main one, number one. Like everywhere in Bali, but here it’s a real problem. Boom. Traffic. Boom. So back to this Those two accesses, unfortunately, are not good enough to sustain the number of cars and trucks that come every day on the Bukit.

08:09
And it’s something you can accept. Today, people accept it. But the problem we have is that it’s only going worse. There’s no solution in the near future anywhere, or not that I know of, that would mitigate that problem. So basically, one thing that people should understand is that Bukit doesn’t have water. It has water, but very, very deep. So basically, you build your villa. The rest of Bali, how do you do it? You build your villa and you dig a well, and then you take the water from the ground.

08:52
It’s either this or you use PDAM, which is basically the government water supplier. But not everyone has access to PDAM, because it’s only on the main streets. And as soon as you are in a small gang or somewhere a little bit remote, you don’t have access to PDAM, and the Bukit is full of remote places. So the problem in the Bukit is that if you want to dig a well, you’ve got to go the length of the whole cliff. So we’re talking hundreds plus meters and some more. And it’s hard, so nobody does it.

09:36
What everyone does is buy water. So you have these little trucks with the big blue or black or yellow tank, water tank, that are running everywhere. Now, the problem with that is that the more construction you have, the more development there is, the more water truck you have. And I don’t know if you have ever been stuck, I know you have, I’ve been stuck on that road here at rush hour. it’s just truck after truck after truck after truck after truck. So it’s here, and it’s around here. Yeah, horrible.

10:17
It’s horrible. It’s horrible, and you’re stuck behind. I was, last time from Pererenan, it took me more than two hours on a scooter to go to Bukit on a Friday evening. I went to the Radisson. I wanted to get there for sunset I arrived there it was night time. And I was like, okay, this is the last time I go there, I think. I mean, it’s okay when you’re in there, but it still doesn’t, traffic in and of itself isn’t terminal. It’s not a bad thing. The thing is, you could build more roads, you could do all these things,

10:49

but it’s not only water. I mean, there’s, you got to get sanitation, you got to get food, you got to get everything. It has to drive down here. So more and more people, more and more development, it’s just scaling, scaling, scaling into a big problem. More water, more of everything, more construction truck, and more people, so more bikes and more tourists. And these roads just cannot be widened. And the developments are getting bigger. So it’s bigger trucks, cranes, all the kind of stuff. Yeah.

11:21
Combine that with 500 tourists moving down every five minutes, it’s a formula for big problems. Yeah. Right now, it’s still bearable if you accept it. Right? But if you think five years ahead of time from now, I mean, it’s crazy. It went from already a little bit of traffic around this area two years ago, to the situation today. So we actually have enough data to forecast the horrible situation that it will be in only like two, three, four, five years from now. Well, it’s like 50% worse in the last

11:58
year times that by in like three, four years. What do you mean? When you gridlock 100% gridlock, like, how does it work? And then you start running out of things like they’re running out of water, some places in central Uluwatu, here And then what happens? For me, as an investor, for this reason only, this is not the right place to invest. Because if you look at ROI’s today, Return On Investments from all these operators, hotels, or villas, or whatever. I mean, they look amazing. Look amazing, like Canggu,

12:31
like Pererenan and whatever. But then you got to think, if you invest 2, 3, $400,000, and you buy some villa or whatever, and then it starts to become messy. And it will, there’s no, it’s not a if, it’s a when. It will happen no matter what. So what will happen then is that your reviews on Airbnb will start to become bad. Okay, the villa was great, but the traffic is insane. Run out of water, three days into our stay. Yeah, exactly. Run out of water. Okay, so you imagine you are a tourist, you come to Bali,

13:07
you take two hours to go from here to here because it’s just crazy traffic. And then your villa run out of water. Who do you blame? Not the world and gods and whatnot. You blame the villa owner. Angry reviews. You blame the villa owner. And so what can, the poor villa owner, what can he say? Sorry, it’s not my fault. Yeah, still bad review. No matter what you reply. And then the whole of Uluwatu starts to get affected. The whole of Uluwatu starts getting bad reviews you know, it just spirals. It spirals.

13:39
And it takes Bali, the whole Bali Yeah. So, and again, I’m not saying this place is bad or whatever. I’m saying for myself, I will not invest in the Bukit for that very reason. The traffic and the water. Well, until there’s a real plan on how they can fix this solution. Have you heard? Yeah. And there’s a plan? No there is not So, in Bali fashion, there is, you know, so we got to pretend that there isn’t a solution. Five years time, what does the situation look like? I mean, hopefully down the road, the

14:13
government will start some sort of desalination plants somewhere here. I don’t know. To be able to supply all these people because I mean, government can’t let that happen. I mean, it’s crazy if they do. Yeah. But the problem in all the same way, like you said, you know, in the usual Bali fashion, this is going to happen last minutes. Yeah. And by the way, the metro, the subway that’s being built from here to there and there and there cannot go on the Bukit. We met with the tech team a few months ago.

14:48
The engineers, it cannot go on the Bukit. So, I mean, maybe there’s a solution, but they cannot build, they cannot dig underground, at least on the Bukit. Maybe they can go up. I don’t know. Probably there is always a solution. But right now, anyway, until 2031, I think they have absolutely zero plans to explore possibilities of developments here, yeah. And I lived in Cape Town. We had that massive water shortage. I went there. I was there too. And it was crazy. You can’t bath, you can’t wash, you can’t

15:23
wash a car, you can’t do anything. Like, can’t flush your toilets. And this went on for three years. Shower, I remember I was with my daughter there at that time. It was like two years ago, three years ago or something. I mean, but long ago. Maybe long ago, yeah. Five years ago, before COVID. And then the showers, we shower in a bucket. And then the water from the bucket, we put in the toilet. Toilet, yeah. And yeah, I know. And that went on for years. I mean, we had to wait until the rains came back for the dams to be filled.

15:50
But for everybody thinking that this is not a reality that can happen. I mean, I lived through it. I know exactly what it’s like. And it’s crazy. I mean, tourists, hotels, nothing. Imagine being in a five-star hotel and you can’t shower. I mean, it’s just nuts. It’s smelly. It’s quite smelly. So again, let’s be very, very clear about that. I’m not saying at all that the Bukit is a wrong place, is a bad place, or whatever. I’m just saying as far as I am concerned and as far as any business such as

16:23
The Kedungu Fund or any other business that involves us helping investors, I will not ever invest on the Bukit Not now, not later. Certainly not later because it’s going to be worse. So unless there’s some miracle solution coming from the government or from some private company or whatever to help with that water problem and mitigate the traffic problem and the water situation, for me, the Bukit is a no-no. There are so many other places in Bali that are absolutely perfect for investment. So why do that?

17:06
Now, that said, if you are a surfer and this is your lifestyle and you want to build your own little house somewhere on here or wherever, be my guest. There’s nothing wrong with that. As long as you understand that you might have a little trouble getting through this. And if you were just stockpile a bunch of water… got some water in your underground bunker, then you should be okay. It’s not so much the little surfers that are building. It’s the big developments that are going in there now. You know, it’s a couple of hundred villas

17:46
or off-plan developments. That’s where the real problem lies. Imagine the amount of the amount of water that these guys require Yeah, that’s crazy. But yeah, so that’s it. That’s it for our Bukit review. Again, nothing wrong with the Bukit, except I wouldn’t go invest there. If you want to invest in the Bukit, be my guest. It’s just your money, your risk. You’re probably aware of the problems that might arise. Well that’s the thing. I mean, no developer will tell you that. Oh, for sure not. No Alright, thanks guys for listening.

18:27
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