Are you
interested by new trends in hospitality sector and by
natural landscapes ?
Half an hour from Bali's developments, a couple of hours from Singapore, Kuala-Lumpur, Perth and Hong-Kong, we invite you in the sole or part ownership of a 5 star hotel development at the most pristine location of South Lombok, arguably the most stunning and promising tourism development area in South East Asia.
THE MANDALIKA SPECIAL ECONOMIC ZONE AND OUR TURTLE REEF PENINSULA
The four pictures
hereabove describe the Lombok island and the 1200+ hectare
Mandalika National Tourism Resort.
Turtle Reef's lands constitute a
100 hectare highland peninsula tucked between the Kuta &
Gerupuk villages, 1500m eastward from the famous Tanjung Aan bay
where a golf course and a couple of five star hotels shall break
ground by 2018. Infrastructure like 4 lane roads, power and water
are now available at just 500 meter from Turtle Reef.
Turtle Reef's hills are the ONLY freehold
oceanfront lands neighboring the national resort (all other lands
surrounding Mandalika are either non-oceanfront freeholds, or
oceanfront lands belonging to the Ministry of
Forestry).
Mandalika is now being leased (30 year
contracts) to hotels and other operators by the Indonesian
state-owned company PT ITDC (of Nusa-Dua Bali's fame).
After the
groundbreaking ceremony on December 12, 2015 by the Vice-President
of Indonesia, a 350 room Club Med resort, a 250 room Pullman,
a Royal Tulip, and a X2 are the first four hotels built being built
for a total of 1200 rooms (including the worldly acclaimed Novotel
hotel designed by Bill Bensley in 1995). As many as 20 hotels and
5000 rooms are planned for the longer term together with a 70
hectare golf course.
As for us, we plan
to develop the peninsula as a secluded mixed-use nature
sanctuary, with 25 percent of unbuilt common area, such as a
tropical bird park, gardens & orchards, a turtle nursery, 10
kilometers of natural trails for trekking, horseback and bicycle
riding, etc... but also as a secluded accommodation area with
a few low-rise/low-density boutique hotels, and clusters of villas
for upper segments of the tourism and residential markets.
Once the nature sanctuary gets completed, 80% of its land is
expected to remain green/untouched.
For year 2020 a 750 kWp solar
farm
on 15 000 m2 of our land, is planned for
connection to the Indonesian electricity grid (called
PLN).
We also plan to invite guests, young as well as young at heart, to the discovery of outdoor activities on those untouched land & water such as horseback riding, trekking, mountain biking, surfing, diving, snorkeling, rock climbing, zipping, kayaking, kitesurfing, sailing & sea safari.
Since sea turtles are often seen on its reef, and got frequently eaten-up when occasionally crawling onshore (till we bought farmers out, we mean), we thought that naming this pristine place Turtle Reef is an appropriate tribute.
LOMBOK'S TIME HAS COME
Since the closing of the domestic
Airport in the North of the island and the opening of the
International Airport in the South in October 2011, there is
too much to explain about the tourism potential of South Lombok in
general and Mandalika in particular. So we'll just mention here 4
points.
1) The International Airport is only 20
minutes away of Mandalika, and now receives direct foreign
flights from Singapore, Kuala Lumpur and Seoul with Perth,
Hong-Kong, Shanghai and Dubai announced for years
2017-2019.
2) Well in the trail of its
mature sister island Bali, Lombok received only 0.5 million
visitors in year 2010. However Lombok has received 2 million
visitors in 2015 and 3 million visitors in 2017 !!
3) Domestic flights from Jakarta,
Surabaya, Yogja, Makassar and noticeably from Bali 25 minutes
away, have doubled in frequency since the opening of the new
Airport, totalling 30 flights per day.
4)
Round the year, occupancies in the four and five star hotels of the
whole Lombok island are now at their 15 year peak (70% to 100%
occupancy).
Still clearly undeveloped compared to Bali, South Lombok is THE FASTEST GROWING destination for tourism in Asia (+30% of arrivals in 2013, 2014 & 2015!!).
Several interesting press
articles, such as collected here in the web site of Knight
Frank/Elite Havens, bring further information
why.
http://www.elitehavenssales.com/news/&tag=64
An April 2014's article from International Business Times places the south coast of Lombok alongside Virgin Galactic...
http://www.ibtimes.com/8-great-travel-destinations-near-future-1566060
A few December 2015 articles report on the
groundbreaking ceremony of five new luxury hotels on Mandalika
resort.
http://www.antaranews.com/en/news/102000/vp-kalla-reviews-preparation-to-build-hotels-in-mandalika
http://www.thejakartapost.com/news/2015/12/14/accorhotels-kicks-construction-mandalika.html
Three articles from Haute Residence, Latte Luxury and Travel Weekly bring the last updates for year 2016 and for early 2017 .
http://www.hauteresidence.com/beyond-bali-investors-set-sights-on-neighboring-lombok/
https://latteluxurynews.com/2016/09/09/plans-for-club-med-lombok-announced-by-ceo-and-founder/
http://www.travelweekly-asia.com/Travel-News/Hotel-News/Club-Med-moves-on-Lombok-project
On the 20th of October 2017, the Special Economic Zone KEK Mandalika gets inaugurated by Mr Jokowi, President of Indonesia, as reports the Jakarta Post in two articles.
http://www.thejakartapost.com/travel/2017/10/21/jokowi-inaugurates-mandalika-economic-zone.html
Recently in January 2018, PT ITDC the state
owned company in charge of Mandalika has signed a 450 MUSD contract
with the French company Vinci Construction Grands Projets for the
development of 5 additional hotels and a GP Moto Circuit on a 120
hectare concession in the northern part of Tanjung Aan
Bay.
OUR TURTLE REEF SANCTUARY
The six pictures below describe our nature
sanctuary in the midst of Mandalika.
OUR NATURE SANCTUARY AS THE MOST PROTECTED AND EXCLUSIVE LOCATION ?
If there is one day a Beverly
Hills in Lombok for luxury and
respect of
nature, it will arguably be Turtle Reef.
Pristine beaches, ornated by James Bond style
crags...
Breathtaking karstic cliffs hovering above
Mandalika...
Let's survey where else: Mandalika is all
government leaseholds. Mawun Bay would have been a
candidate however the Sampoerna tobbacco
group owning all
lands there seems more eager to
lease them to high-rise hotels. Finally, Selong
Belanak Bay is
equally beautiful, with freehold lands for
private
villas, but beachfronts there are notably prone to
ownership
disputes, hampered by a lack of legal roads and
are moreover one hour away from Airport and from Mandalika's
facilities.
POWERFUL NAMES, LEAN BUDGET
In our search for a
first iconic hotel brand, we got warm replies of interest
from Ritz Carlton Reserve, Hyatt, Four Seasons, Sofitel and Oberoi
headquarters, all for the branding and management of the first
villa resort (15 to 20 year duration). Other luxury brands such as
Intercontinental, Hilton, Shangri La, Six Senses, Le Meridien...
can be approached as well.
Since this hotel will be the first on
Lombok island for those brands (at the exception of an Oberoi hotel
in the North of Lombok), they show higher
flexibility.
Most of them already agreed to operate
small-medium size (40-90 keys only), with controlled footprint and
responsible operational practices.
Then the land is also offered
under much sweetened conditions (read below).
Bottom line : the project will probably cost
20-30 MUSD only, while other branded projects at Bali, Phuket,
Maldives, etc... always cost between 75 and 200 MUSD depending
on land size and number of keys.
If they
wish to do so, foreign investors are welcome to stay, or even
relocate, in Indonesia to head monthly meetings with the hotel
management once the hotel gets in operation (resident
permits get provided for families).
INVESTMENT CAN PROBABLY BE CAPPED AT 20
MUSD
(Although a single ownership is preferred, experienced hoteliers, environment leaders, as well as financial investors, could possibly enter in the development from 3 MUSD upward)
The hotel development needs the erection of 40-90 villas, mostly 1 bedroom plunge-pool villas with oceanview, on a 3-6 hectare plot.
For instance,
50 villas
averaging 200m2 amount to 10 000m2 built, plus say 2 000m2
built for shared facilities (restaurants, lounge, spa) thus a
total of 12 000m2.
With prevalent upscale hotel construction rate
of 1 500 USD/m2 for top grade materials & interiors, inclusive
of architects fees , utilities, fittings and equipments, budget
will probably reach a value of 18 MUSD. You may desire to round it
to 20MUSD to include working capital and safety
margins.
Developers need to enter into discussion with
their architect to ascertain actual figures for the planned
resort.
Bank or contractor's loans can possibly be obtained for, say 35% of the budget, once the foreign investment company (called a PMA) has been registered with the Indonesian ministry of Foreign Investment at Jakarta (called BKPM).
SELLING VILLA UNITS ?
Some luxury brands such as
Sofitel, Six senses, Shangri La, Four Seasons welcome the sale of
villa units to individuals, prior and during the management
tenure.
From most sources, sale of 30% of villas units
prior and during the construction phase can cut the capital
requirement by more than 50%.
We
could thus feel comfortable with a conservative figure of 10 MUSD
of equities if this option is selected by the
developer.
Some other luxury brands like Marriott/Ritz
Carlton request that hotel developer's company retain full
ownership of hotel rooms during the duration of the management
contract. With those brands, villa units may only be sold as
additional private residences.
ONE EARLY BIRD GETS ALL THE WORMS
As of October 2018, market value of oceanfront lands, with freehold certificates, 25 minutes from International Airport, neighboring the future Mandalika golf course & five star hotels, gently sloping toward the sea and sunset, with private roads avoiding village traffic, is above 285 Million Rupiah/Are (190 USD/m2).
Nearby, the Elite Havens & Knight Frank real
estate company just sold the balance of oceanfront lands of the
same Gerupuk/Tanjung Aan peninsula at 325 USD/m2.
As references, market price of
land at Kuta village of Lombok is now above 550 Million Rupiah/Are
(375 USD/m2), and this is for non-oceanfront...
As further references, market price of oceanfront lands further away from Mandalika (7km westward is Air Guling, 5km eastward is Bumbang) is 150-200 USD/m2 when devoid of access uncertainties and ownership disputes.
As further reference, price for 30 year leases on Mandalika is 90 USD/m2 (which would translate into an equivalent price of roughly 270 USD/m2 if Mandalika lands had been for sale).
For information of distant readers, beach-front and cliff-front lands at South Bali nowadays command sky-high prices of 1500-5000 USD/m2. Traffic jams keeping increasing as well...
Back to our lands, at the contrary of most other locations which never include an inch of common space, we shall add the cost of protecting forever 25 percent of the land for common green/unbuilt areas. This comes at a cost but is the only way to develop with exclusivity and privacy. This increases land value to a minimum of 190 USD/m2 / 75% = 250 USD/m2.
To avoid valuation increases during investor's evaluation and contract preparation, let's freeze this value of 250 USD/m2 till January 2019 (since the opening of the international airport, South Lombok's lands appreciate at a steady rate of 20%-30% per annum).
MOREOVER, TO SHARE THE BENEFIT of land owners (main founder of the PMA company, his Indonesian family, and ISCO underpriviledged children foundation) in enjoying the early development of a maiden luxury-branded hotel within the nature sanctuary, let's provide a price reduction of 50% on land acquisition, thus parting with land at 125 USD/m2 only !
Or, if the overall
design you select with the international brand can fit into a 3
hectare plot, even parting with land for FREE
!!
Be it a 50% price reduction
on a 6 hectare plot or a "100% price reduction" on a 3 hectare
plot, our
incentive has a present value of 7.5
MUSD, probably rising above 15MUSD within the next 3
years.
The CEO and his family will
develop one midscale 50 key boutique hotel of their own, Net Zero
Energy, on a distant 4 hectare plot in 2019, however no other land
from Turtle Reef will be offered for subsequent hotel
developments before the 3 years following the actual
operations of the luxury hotels and golf course (2021+3
years=2024).
LAND COMPENSATION IS FLEXIBLE
1) For allocation of 6 hectares of land, a
developer opting to purchase the land needs a budget of 7.5 MUSD
only (market value being already 15 MUSD and rising fast toward 30
MUSD at time of payment and time of hotel opening !!).
(Sale of land can be legally discontinued, with
part of the 35% down-payment withheld as penalty, if developer
doesn't develop according to an pre-agreed schedule of 36 months,
plus time provision for force majeure, if any.)
2) Alternatively, if the developer is foreign and insists for a local partner, the developer can ask us to convert a 4.5 hectare land into shares of the foreign investment company (payment of whole land is thus forfeited since land owners then get shares of the hotel).
(By notarial deed, final land ownership is completely granted to the hotel development company when the villa resort gets actually developed and a management contract with a luxury brand kicks off. To prevent detrimental loss of time, a 1.75 MUSD deposit/penalty needs to apply. It gets refunded 36 months later when the branded hotel opens to the public)
3)
Alternatively the developer can opt for a 20 - 50 year leasehold
contract, with 20 years at no cost (free use of up to 6 hectares of
land), plus a first right to renew the lease or to buy the
land. (To prevent detrimental loss of time, a
1.75 MUSD deposit/penalty needs to apply. It gets refunded 36
months later when the branded hotel opens to the
public).
4) Or simply opt for 3 hectares of freehold land
for free...
(To prevent detrimental loss of time, a 1.75 MUSD deposit/penalty needs to apply. It gets refunded 36 months later when the branded hotel opens to the public. Deposit is replaced by a 35% down-payment when the developer opts to purchase extra land, as on alternative 1) above.)
SUCCESS FEE
And if you aren't interested to develop the hotel, we'll be glad to properly reward you for promoting this opportunity to your friends or clients.
(Plus, by doing so, you help protecting against
over-development and help freezing 80% green one of the most
stunning place on earth. You also help financing the education of
more hard learning Indonesian children).
Please feel free to contact us at your
convenience for further details or discussion.
Pascal Lalanne
Managing director & founder of PT Lombok
Nature Sanctuary
Founder (1999) and present chairman of Yayasan
Isco for education of underpriviledged children (2500 children
from 26 slums of Jakarta, Surabaya, Sumatra, Lombok, now 35+ at
state universities).
Trade Advisor to the Embassy of France (Jakarta, 2002-2019)
Villa Ambhara
Jalan Uluwatu, 80364 Bukit Jimbaran, Bali,
Indonesia
Tel (62) 361-703491
Fax (62) 361-703492
Mobile (62) 811 104 202 (Indonesia)
Mobile (33) 68085 2525 (France)
