EPISODE 24:
From marketing to brokering and development: Inside GEONET’s Real Estate Machine

00:34
Hi, everyone. Thank you for joining, this new episode of Bali Business Club. Today. We are with Pierre and Chad. Thank you for joining. Hello, Omri. So Pierre and Chad run a super successful company called GEONET, website is geonet.properties you guys have been, have been around for 13 years. Forever. 13 years, yeah. So what is GEONET? GEONET is, building this massive ELLE property, ELLE branded project. Yeah. There’s beach clubs, there’s hotels Yes. Eight restaurants. I mean, it’s massive.
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01:09
They’ve raised already to date. And they’re raising a few million more in the next couple of weeks. Correct. There is also other businesses. You do a fractionalized, sales. Yep. Hotel rooms. This is super successful. You run a couple of funds, real estate funds in Australia. Yes. You have I don’t know how many employees probably a 100 employees or between Australia and here, Across two countries. More or less. you make a ton of cash. We spend it well. You spend more. We spending well, but yeah.
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01:46
I’m very happy to have you guys. I’ve. I love your company. I’ve followed your company for for years now. for years now. Full disclosure, these guys are friends of mine, and, I’ve always dreamt of having some sort of stake into that company. Still open Omri, come on. So we’re going to discuss all of that. I’m very excited about this podcast. Thank you. We’re excited too. Alright. After the jingle, your turn. Thank you for being here today with us. Thank you, Omri. So, Chad and Pierre.
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02:19
Yes. Okay. You’re Australian, you’re French. A good mix, yeah. So maybe we start with, before we introduce the company. Maybe we start with a quick introduction of yourselves. Yeah, yeah. Quick backgrounds, one minute each. Good. Who starts? Chad? Yeah. Serial entrepreneur. Started my first business when I was 23. Never really liked working for people. Didn’t like people telling me what to do. So, I started my first business in Australia at 23 and did multiple businesses, in Australia from, from tech
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02:51
to, CCTV, range of different things in Australia. I moved to Bali 13 years ago. Said I’d never run a big business again because I had, nearly 100 staff, 150 staff in Australia. And here we are again, running, running a big business. But, yeah, 13 years in Bali. Love it. And probably some of the best success we’ve had is we’ve started to, to join together and had an international, partnerships with ourselves with, Alberto, Swiss. Correct. So, yeah, exciting times for GEONET as we, as we unroll our ELLE Beach Club and Resort.
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03:27
Alright. Okay. Pierre. 43 years I’ve been also 13 years in Bali. Prior to that, I was in Hong Kong and then Europe and 25 years of real estate, I would say.. 25 years in Hong Kong. I mean. And London, Hong Kong and, and Bali. Okay. That’s more than me. I know, wow. Wow, I know, but I’m younger. I think. You’re younger. And you have more real estate experience more than, I have 15 only, so. And join with Chad, couple of years just at the end of Covid, right? Went back into real estate, I
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03:59
moved into hospitality when I was in Bali, which is the right thing to do. And, back in real estate now. Yeah. 13, 13 years in Bali. Love it. And the journey is, it’s just growing up. So, which is good. All right. Okay. So great. Thank you for the introduction. We’re going to talk now about your company. Your company is something every time I talk to investors, to friends and whatever I always talk about GEONET. I mean, I know there are a lot of developers here in Bali, but you guys have achieved something
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04:27
that’s really, really amazing. Thank you. Omri. Thank you. You’re welcome, pleasure. No, but it’s true. I mean, you everyone, you know, develop a bunch of villas and or hotels or whatever, and you guys have, done things differently. You got to talk about this better than me, but, Yeah, I’m very impressed by your growth. I’m very impressed by the way you’re managing things and your vision. I understand the company started as a marketing agency. Which is so far from what it is today. From building hotels.
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05:02
Well, yes, it’s. It’s like when you talk about YouTube and, you know, YouTube was a dating website. Yeah, yeah, yeah. In the beginning, you know. And it’s like What? You know. It’s crazy/ How? So tell us a little bit about GEONET. Like in a nutshell. At the very start, it was a marketing company. As I said, I moved over here. We had 150 staff in Australia and finished that up and sold that up and came to Bali for the quiter a life. Right. But again, if you’re a serial entrepreneur
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05:26
like we all are, that’s it’s never, enough, right? You’re always wanting to do more or make a change. So I started a small marketing company and actually at that point it was called My stores and more. So it wasn’t GEONET at the start. But again, it started getting very big in Australia, so we had to do it, change the name into something that it was more relative. At that point. Yeah, I was very lucky, that a lot of my projects that I was working on in Australia, I was working with some very good mentors.
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05:55
One of my, biggest mentors was a gentleman called Shane Murphy. He was the, national sales, director for a company called HomeCorp Constructions, which eventually got bought out by Toyota. But they’re one of the biggest builders in Australia for house and land packages and apartments and Gold Coast in front of Queensland. And we invented a technology for them. It’s called geo targeting. Yeah. So we were able to use Facebook and Instagram algorithms and work with the longitude and latitude coordinates
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06:23
over the top of a building in Australia as we’re going through such, population growth and we’ve got such vast, landmass, we would break up areas for three and four bedroom homes, hundreds of acres into estates. And so there would be multiple builders in each of these estates. We would put the geographical coordinates over the showroom of the home court construction, offices as well as the other offices. So they went into a competitor’s location. We knew that they were about six weeks away from signing,
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06:56
on their house to land contract. So because of the geographical coordinates, we sent him a better interest rate or a better furniture package or a lower deposit, and that. You’re pushing ads. So anyone that would walk into the competitor’s, office. Yeah. Coming out. Yeah. Will look at his phone and see ads for you guys. Yes, yes. That’s so smart. It was very good. And so therefore we changed from My store and more It’s very sneaky. And it was incredibly successful. So that really put us on the map.
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07:27
So that’s why we changed from My stores and more to GEONET guide because that’s, and that just got us stronger and stronger into real estate marketing. But it doesn’t matter how good your project is, if the marketing isn’t right and the audience isn’t right, then the project selling or real estate selling is very difficult. So that’s kind of what’s, what certainly got GEONET into that. I had no idea. When I met Chad, I was like, I didn’t know about marketing. Then I understood what marketing
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07:55
could bring to the real estate industry. But, I understand that you joined at the time where you were doing Geo marketing, targeting. Yeah, yeah, that was the start of it. I remember you told me about it Correct. I wanted to do the same thing. Actually, full disclosure. I still haven’t told you the technic. I put my teams on it and they were like, oh, wow. Hold on. Yeah, but it’s not a very precise. And I’m like, okay. You need to go on a internship at GEONET and come back. Go do some corporate spying and come back.
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08:20
It’s super powerful. Yeah. For real estate sales, and project, you know, marketing, it’s amazing. Do you still use it? Yes, and like other marketers you know, we use lookalike audiences and things like that. But when we were selling, investment. So we started to run investments, property in Australia. And again, GEONET was the, marketing partner of that. We were selling apartments and co-living properties, house and land. This was during the time when I met Pierre and that was a beautiful days, right?
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08:51
We had interest rates of 0.75%. It was it was beautiful. And during those times to find the right people, what we did is we geo targeted, luxury car dealerships all over Australia. So if anyone was going in to buy, you know, BMW, or Yeah, Aston Martin or whatever, you. We knew that they had more disposable income. They had more disposable income than now. We’re probably ripe for, you know, some of the projects that we were working on in Australia. You know, they have a casino in Australia as well.
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09:20
It’s a great place to geo targeting. Wow, smart. People want to spend money there. Yeah. Of course. How precise is this? You can geo target the exact location? Exactly. And then, say five hundred meters wide or something. The exact location. And, look, we used it for multiple different business times as well. Adjusted very well in real estate. Even in your traditional real estate. You know, your normal second hand homes. Yeah. So there was an open home, so people went into open homes, we would grid all of those.
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09:46
And then, one of our, my preferred real estate agent in the area, if you walked into a competitor’s open home, then, I would get that lead. So it’s somebody that’s actively there looking at a product or service based off their geographical location. Okay. So it works very well. So yes, it still works very well for us today. In fact, you know, if you go to a beach club in Bali at the moment, you’re going to get geo targeted. And because if you’ve gone to a beach club and you understand
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10:14
how powerful a beach club in Bali can be, well, you probably might be interested in investing. And so you’ll get our ads about ELLE resort and beach club. Okay. Okay, so we’re going to get to that. Okay, so what happened next? I know about it, but I want you guys to tell us. Yeah. Yeah. We grew significantly as a become a very, very strong marketing company. But then we vertically integrated and we became our own property investment company in Australia. And again, that was very good. That was good times. Low interest rates.
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10:41
The cost of stock, a house on land or an apartment was much less than what’s today and we were able to achieve, good successful success because people’s borrowing capacity was still strong. And the cash flow positive, side of property investment in Australia, like in all Western worlds, was very strong at that point. Yeah, but as after Covid we came out cost of living crisis is going up, which is the nature again of a Western world’s interest rates went up. Yeah. And borrowing capacity is attached to the earning.
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11:13
So just like generally like 6 to 7 times that they’re earning was their borrowing capacity. So that started to change. The yields weren’t as good. And then we’re paying for Covid still, you know, with governments, tax and local council tax. So yields just kept getting worse and worse because we’re already in Bali. And then again, me and Pierre getting together and understanding what was happening in Bali. And the opportunity of property investment, we said, okay, well, let’s,
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11:44
let’s turn into GEONET property and build what we had done in Australia, but build it here in Bali, but then also give investors, make it feel native for them. So we assembled the white collar services, mortgage brokers, financial planners, self-managed super fund accountants assembled that team. And help people, Australians, invest into Bali. We do more than just Australians now. So you went from marketing agency to a full fledged real estate entities. Real estate agent. Correct. Without, you know, losing the adrenaline.
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12:16
I mean, the the, I would say the DNA of marketing. Now. because we based in Bali, how can we, bring people into Bali? Yeah. So it’s a lot of marketing education, all of this. Right? To be able to, you know, tell them. Well, there is yield in Bali. There is no more in Australia. Invest here. Correct. Yeah. I understand that you’re you’re like, you know, basically bringing people on planes, I know that story. Bringing people in like 40, 50 investors on planes from Australia, bringing them here, showing them around.
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12:44
It’s a dream of ours to own, our own airline, but not yet. But, no we bring we basically we have, you haven’t seen it yet. It’s a shame. But next time, you’ll see it. We have a beautiful office, in Seminyak, so. Yeah. I know. It’s a home for investors, right? So we’re trying to bring people, make them feel safe about investing. It’s not just a beautiful office, guys. It’s 1200 square meters office, brand new. It’s like a Google office type of place. I’ve seen photos and videos.
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13:13
As Chad was saying, He didn’t want a big team. I was proud of my office. But you guys, I’m quite upset, yeah. You have a better office than me now. You have a great podcast studio, It’s really nice. Really nice. So, and you guys, turned over $100 million in the last three years. USD in fractional hotel investment. Okay, so tell me about this fractional hotel investment. That was the next part of the success. Like we wanted we knew in Australia. And again, it was a Western issue. But let’s focus on Australia.
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13:47
It was a bad affordability. So everyone knows they need to invest. They need to get capital growth. They need to get cash flow positive property using that cash flow positive to pay down their mortgage, right? The couple of aspects of investment and wealth creation is to get rid of debt but use debt to get rid of debt. Sure. So, it was a complex, mostly at podcast. We could explain all about it. And our mortgage brokers will help you through it. We fractional investment was, multiple people owning
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14:15
assets, together legally, In Australia it’s called tenants in common. Right? It’s a normal thing. And you’ll probably hear this in most Western countries, more and more as the affordability gap continues to get worse, more people are pulling their money together to buy investments. So that’s what it was. And that was the big game changer for for us. Correct. As we do. That and then put it in hotel asset class, not so much villas because we seen there was so much competition. So in layman’s words,
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14:45
people would not buy your property but buy a piece of the property, correct? Correct. Correct? Those are we talking about hotel rooms? Yes. Yeah, yeah. I think a minimum from what I remember it was 50K. Yeah. Correctly. $50.000 USD. The buy in. Yeah. And for that price, you would own like a certain percentage of the hotel room. Which was within a pool of hotel rooms, because it’s a hotel. Yeah. Correct. Yeah. And what were the yields on that? Are they making money? Yeah, they’re making money
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15:12
straight away, actually. One of the thing that, you know, again, it’s very thoughtful for, I would say for Australians, but anyone who’s got, you know, money was borrowing money abroad, to invest in to Bali because you can to borrow money here as we, as we know as foreigners. So it’s all about, giving them a yield straight away. Guaranteed yield. Yes. Right off the right away. Yeah. So people can, you know, actually invest most of their money now to get a yield now because, if you’re building a property,
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15:42
but you get up to two years so you’re not going to make money, you’re going to pay 10%, 20% on a payment plan. But the idea is to get money now because this is what the you know, what buying a people are buying into. Usually they get 8% during construction. 8%? Yeah, per year. 8% guaranteed during construction. Correctly. Yeah. As soon as they pay 50K, 100K, they get 8% paid quarterly in arrears. So you get money straight away. And then we’ve been doing that for over three years. Over three years now. Yeah.
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16:11
And then once it’s operational, then it’s a, you know, profit share from the operation of the room. And in the case of, Out GEONET Project, we’ll talk about that in a minute. It’s also benefiting from not just the room but also the asset, the F&B, the dining and etc. The whole business. Okay. Yeah, the whole business. And is there guaranteed yield, or is it? In the long run, no. It’s always, you know. So just the 8% during the construction. That’s the only guarantee you get.
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16:37
It’s impossible to guarantee your yield for the long run. No one can do that. Not even your bank. Not even your insurance company. So. It was a trick question. Okay, so you went from marketing agency to real estate broker. And now tell me about now. Developer. Yeah. Developer now. Yeah. So yeah. So this is the big thing. This is the big thing. You guys are building hotels. Yes. Yeah. Yes. It all starts somewhere avs a developer right. So there’s a few more things that we put into that as well into that makes it was about
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17:11
as we became that developer also ensuring that our financial management side of the business was important. So concurrently, we invested about 5 million of our own money into land purchases. And getting the sites prepared. To the one in Batu Belig. Correct. Can I say the place, yeah? Yeah. Well, we invested a lot into the into our offices, land purchases, and our architects and we’ll talk about partners, but also financial partnering. So like, you as well, you’re seeing the benefit of helping people
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17:45
have a solid foundation, financial foundation bar or fund. Yeah. So we started a retail investment fund. Yeah. Wholesale investment funds, Which are based in Australia? Which are based in Australia. And that gave people, confidence. Right. That not just being a developer in Bali. But understanding that if it’s via a fund that the money that you invest is siloed into that projects. Right. You’re audited, you’re regulated. So yeah, it’s a regulated fund. I mean, there are those are regulated funds in Australia.
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18:17
Correct. So catering for the Australian market. So for Australian investors, they would invest through the funds as opposed to any other investor, around the world who can invest directly with you. Correct. And when people understand what a fund is, is basically the trustee who our trustee is a company in Australia, in Sydney called Cush And Keiser appointed by asset Australian Securities Investments Commission, to govern that fund, to audit that fund, to make sure that we apply to all of the rules that been set down by that.
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18:48
So people don’t have to go through, well they can still do the due dilligence. But the trustee does that due diligence on us as a third party. And then we’re just in our final discussions from an auditory perspective, that we’re looking at using EY, Ernst Young to do that because they’ve got very good skill sets, across jurisdictions. Yeah, yeah, sure. Yeah, we use Mazaars for The Kedungu Fund. That EY was.. One of the big five, yeah. We talked about big four. Mazaars is not in the big four actually.
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19:16
So what PWC, EY.. Deloitte, and the last four, I forgot. And then Mazaars, so yeah. And then Mazzars, big five. Okay. It was a big jump to be a developer. We got a lot of, partners. Colliers probably. is. Yeah, it was a big jump, but it made sense for us because we knew what was selling rights. We knew, that for investors, what is important is, having a property fully managed. Hands off. Right. So, one of the last project we worked on in, in Bali was, you know, the Luc in Berawa. it was managed by Tui,
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19:54
Tui Blue. So The Luc is a massive. Massive. Massive hotel, yeah. 120 rooms Berawa just right on the middle. Correct. Very close to Finns, yeah. Great location, great management. How many keys? 118 rooms, and 25 villas. Okay. So it’s a big project and it’s marketed and managed by by Tui. It’s sold out? There is still a couple of villas left. Guys. Yes, absolutely. First come, first serve. The hotels are operational, the first run of the hotels are operational. The ratings are through the roof and the.
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20:28
And Tui hasn’t started their marketing yet because it takes a year for Europe to wake up and to educate people. Also we were alking about education. So it’s sold out before? So it’s sold out and operating before the management comes in place, which is really good for investors. So yeah, it’s it’s all about management. I think, making sure that your, you know, investment would be taken care of. Yeah. Of course. Hotel is a great asset class because, it’s always running, especially in Bali occupancy rates,
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20:58
Through the roof, yeah. Through the roof. I think Seminyak is around 80%. Canggu is coming up. Oh it’s 60 plus anywhere. All year around. Right. You’re going to have a return for sure, and you’re going to have a management company that’s taking care of the property. We chose Cross as our management company. We chose Cross It was interesting because when you’re a local. Cross is? Another management company. Yeah. Yeah. Which was I think recently. Acquired by. Acquired by Korean, yeah.
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21:26
Yeah. Correct. Yeah. Yeah. So Cross is Australian owned until a month ago. Yeah. Was done by Fly Center, for many, many years. and, a company called Sonar who just flew into our offices last week, a powerhouse of, Korean hospitality asset management, 54 airlines in their in their fleet and understanding the strength of hotel asset class. So they bought Cross. And we fly to Korea, very early parts of January where that. Sonar were actually now are looking at buying into our projects as well, which is a great thing to have your hotel
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22:03
operator also be financially committed into the projects as well. So that was a very good thing for us recently. So a good jump to ELLE. For those who don’t know the brand. Who doesn’t know the brand? Everyone knows the logo. But you want to say ELLE, you know. Not necessarily. It’s a magazine. Yes. It’s a French magaizne. Correct. That has like franchise all over the world. Yes. We have the ELLE Singapore, ELLE Tokyo, ELLE Australia, ELLE everywhere. And it’s a great brand. It’s been there for as long as I’ve lived.
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22:31
70. I think they. I know they celebrated the 80th anniversary this year. 80th year anniversary. Yeah. Very super famous. Super famous. And they are launching. So tell us about the project. I mean, we are launching for them, in partnership with ELLE. the first, resort in Asia. And it’s going to be called The ELLE Resort and Beach Club in Seminyak. Yeah. So ELLE is a, as you said is a franchise business. So the brand first is a magazine, then it’s, ELLE’s wear, homewear, and they branched out into hospitality
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23:08
a couple of years back. Yeah. So they have already two running, operating hotels, one in Paris, Maison ELLE and one in Amsterdam. And since they had their own hotel, a lot of, developer around the world are looking to, obviously use. Yeah, with. There’s a massive ELLE residencies in Dubai. In Dubai. Yes. Correct. Yeah. You know, I live in Dubai now, so. He has seen on the billboard on the. The billboard in on the Sheikh Zayed Road It’s like 50m long. Well you being in Dubai, I mean then you understand
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23:40
what’s happening with branded. It’s all about branded residencies. You have The Bugatti residencies, The Rolex, The Lamborghini residencies. Biggest brands in the world. Any famous brand. I mean, they capitalizing. Everybody’s leveraging the brand’s name. Of course. But then what happens with that is we’re having these conversations now with, LVMH, the Louis Vuitton, Christian Dior, coming in and having part of the beach club and or activation and the whole retail space, and then we can bring it
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24:09
right back to the start is that we wanted to make hotel room investment or hotel investment asset class affordable to to everybody. Right. Whether it’s the base of Australia, which now and next year we have big plans to move into Hong Kong and Singapore and the likes, and making that type of investment affordable, to the masses. So you can own a piece ELLE now, by investing in the resort. It’s a crazy story, we have, one of, the representative of the brand who moved to Singapore was looking to,
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24:45
you know, looking for hotels or projects in. Was your friend or the other? In the area. It was a friend of a friend. But, yeah that we know from, you know, long time back in Paris, the French network. We met he was looking at, you know. French network. French connection you can called it. French connection, correct. Yeah. Easy. Right. When you only speak French. That’s it. Anyway, so we met and he was looking at you know, potentially projects in Bali. Yeah. Had a chat with the marketing guru
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25:10
here, and I said, what about, what do you think about ELLE. He’s like, ELLE is a great brand. And I say well, they’re doing projects now around the world. There is project in Dubai. Project in Miami. Why don’t we do Bali project and, and he was actually very, very keen. I wasn’t sure, but we went to Australia straight away. Right. And talked to a couple of investors. What about and people’s eyes But I think that’s because ELLE for you born and raised. Born and raised in there. It’s a magazine, yeah.
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25:39
You don’t realize the impact of this brand around the world. I mean, have a look at Korea. 3.5 million, followers. Just on the digital. It’s huge and just getting bigger. And the appetite for branded stuff in Asia. Stuff. When I say stuff, it’s everything. Right? It’s a magnet to, to investor and and it’s a magnet to other brands. So you have the land. Yes. How big is the land? 1.2 hectares. 1.2 hectares. Yeah. It’s like beach front land. Beach front. I know it because I that’s where there was this club.
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26:07
What was the name again? Tropicola. Yeah, beach club called Tropicola. Tropicola. They didn’t reopen during. And then Mozaic? And then Mozaic restaurant was at the back, yeah. And then Tropicola took over Mozaic. Made Tropicola and then I don’t know what happened after. And then they didn’t reopen since Covid. The last beach front portion of land. So the end of ELLE hotel, a beach club hotel will just be a stone’s throw from W. It’s just next door. Which is the golden mile of hotels in Bali’s, right.
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26:37
Yeah, yeah. A little shortcut by foot from. You can walk now from. Jalan Cendrawasih. Correct. Yes, jalan Cendrawasih. And in the beach front, you can walk from Double Six from Legian, all the way now to. Yeah. Correct. To Seminyak. Yeah, yeah. So you have the land and you’re building so ELLE hotel, And then what else? I know you’re building a few things. Yeah, I’m lost. Like residencies and more lands or what? It’s a lot of things. No, no it’s it’s a hotel. Yeah. So we have a resort
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27:07
which is, in the back I would say We will share some renders so people understand better. Yes. Yeah. Because they’re beautiful. I mean, their architects did a great job on this. Inspiral as an architect and it isn’t. It is not first. Who is the architect? Inspiral. Charlie. The Luna Beach Club in the. But that’s been the attraction of ELLE as well as in it being able to get some of the best architects. The best interior designers. Their Dubai residence is beautiful too. Yeah. It’s stunning. Stunning.
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27:35
To be honest, all the branded residences, they’re all beautiful. Right? Yeah. We’re like, wow. Yeah. Like the Bugatti one they building now. They just sold like, for 500 million the penthouse. Wow. Wow. Yeah. It’s just crazy, you know. So anyway, back to Batu Belig. So, you’re making a hotel. What else are you doing there? There is a resort, So it’s a building. It’s not a one floor thing. It’s four floors, you know. Four floors, yeah. Yeah, 15 meters, which is the legal limit in Bali.
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28:07
So we have the resort and then we have a hotel, which we would call more the beach club hotel. Yeah. And then we have a beach club. So the beach club is on 30 are. It’s like the beach club up a little bit as well, which was actually inspiration from our last trip, to Dubai from Pacha, so So it’s very similar portion of land. And it slopes up a little bit so that everybody in the beach club gets a view. The beach club is accessible by anyone and hotel beach club is just for the ELLE residences.
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28:37
Is that correct? Yeah. No, it’s one beach club for everybody. Ah, it’s one for everyone. And the hotel guys will have a VIP access at the back. On on the top. And it’s kind of as Chad was saying, like a paddy. So he goes down right in stages. Big restaurant up at the top as well. So some of our investors. Rooftop? On the top of the beach club, you have a rooftop personals. Kind of for weddings, milestone birthdays, corporate events, things like that as well. A little nightclub downstairs, which,
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29:05
well, during the day could be is going to be for events or product launches. Okay. As well, which, ELLE brings to the table as well. The interest is actually already there because they do their planning years ahead. So we’re going to be on time and on budget to open because some of the biggest brands in the world, are talking about launching there. So how big is that place? Give me some numbers. Well, so 168 keys. The beach club, 8 F&B venues. Wow. Well. 8? 8. It’s big. Yeah. So they’re not all big, but, there is eight.
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29:38
So there was, you know, there’s the grill by the beach. Cafe poolside dining. Then the cafe, then the restaurant, then the VIP area. It’s 1.2 hectares. I mean, you can imagine it’s capacity will be for the beach club probably 1500 people. Okay. How big is the parking? it’s underground. And as you said, an access from Cendrawasih as well. Which brings you straight into Petitenget, From jalan Cendrawasih you can access directly at the end of the street on the left or right. It’s free access is Cendrawasih,
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30:05
Batu Belig, and the beach front. And the beach from the little street, which is not a street, but. Yeah. Yeah. Okay. Yeah. And then ELLE also let us to be able to do lots of different things from the retail space to, gym and fitness. So a true lifestyle hotel, which is where the demand is coming from. If it’s not Asia, but throughout the world, lifestyle hotel is what you want to be building today. And that hotel asset class. Right. So, we’re talking about not just us to buy, but beautification, IV’s..
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30:32
And because Bali is becoming more popular now, from beauty side, injectables. Yeah. So everything under the the one roof, alongside the ELLE brand. Okay. So, now it’s, December 2025. Yep. We’re recording this now for Christmas. What’s the timeline? Timeline? So we have already started working for us. It was important again, we’re coming back to partners. So we worked with Colliers. To be our construction management partner. They actually moved into our office a couple of months ago.
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31:07
And then we got a bunch of local, expertise. Experts as well, F&B experts, structural engineers, etc.. We started working with the government directly. Right. We didn’t want to, submit all of our plans. At the end, we worked with their appointed, PBJ consultant. So we’re we’re already, a long way through that, probably about 50% of the way through working with them, directly on that. So we’re looking at, demolition, finishing around, January. Cause there’s something there, right now?
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31:40
The old Tropicola. Yeah, yeah, So it was a two three story building, I think. Three story building, with the beach club that we try to reuse, yeah. Yeah, some of some. Upcycling, some of the equipment as well we work with. And you probably heard that charity Stella’s child. So we’re looking at helping them with some construction of, some of the, some housing for them. So we’ll try and use them as much as the building material as we can. Okay. Then demolition will be completed by End of Jan, mid Feb
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32:11
And construction should happen Q2. Okay. Start, breaking ground, proper. Because you need to, as you know, the building permit to be. Thorough. That’s next year and it’s going to, take 18 months to build, six months to fill out. So it’s two years after that, basically. Okay. So opening, Q2, Q3, 2028. Correct. I’ll be there. Yeah, of course you’ll be there. It’s going to be a hell of a party. The launch party that runs for six months. Yeah, well, we need to test everything and make sure that, you know,
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32:46
the food is up to standard, and the party is up to standard. I’ll help test. Perfect. And, okay, let’s talk money. So. Okay, we are on. We are what the 14th of the 15th of December. and by the time this podcast is going to be out, maybe probably about ten days ish. So Christmas Christmas podcast. Yeah. So your situation, what we are discussing now, will probably have evolved a lot because it’s going very fast I understand that you’ve raised quite a bit of money. Yeah. So, in a nutshell, let us, tell me,
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33:19
what is the total cost of that all operation? That whole building. The total development costs? Land and construction is, I’m going to have to go back to AUD. I can translate in.. We did the conversion yesterday. So I can translate into USD. Into USD, yeah, yeah. 67% Exactly. So 1 AUD is $0.67. Good. Yeah, what’s our land and construction cost is 180 180 what? So 110 USD So $110 million Project. US dollars. To buy the land and to build that whole thing. Yeah. And it’s because. A bit over $100 million, yeah.
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33:59
And with this project, we didn’t want to build something that big unless we had a very long term lease. Right. So this is a 50 year lease. With guaranteed extension. 50 years lease, okay. With guaranteed extension. Yeah. So potentially going to how long? There’s two lands. One is actually HGB.. Freehold change it into HGB. And the other one is a 54 year lease, extendable as well. Yeah. And, okay, so $110 million, do you have the cash? Did you bring it today? Yes, it’s at the back. Okay,
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34:29
Under here. So we have. It’s in the car. We have three pathways. Well, four pathways. Who finances that? Again, as I said before, injecting our first, our $5 million into purchasing deposits. So you put in yourself $5 million Correct. Okay. We then raised an additional 25 million. And that was for additional land deposits. And that was done in both a retail and a wholesale type factor. And now. Sorry, that’s done also? That’s already done. So 25 million, where is that money now? In the bank?
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35:02
Some cost into the projects land’s payment and.. And then the third part of that now is institutional capital. Yeah. So institutional capital comes in when the projects is very mature. You’ve chosen your partners, you’ve chosen your construction, management companies. You chosen your interior design. They want to know that once they deploy their capital that, you know, within 8 to 12 weeks, you’re start constructing. Correct. So we’ve been all over Asia with that raising institutional capital.
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35:32
We have a lot of interest out of Singapore, Korea, our partner with Sonar, we meet with them again in January. We have subscription forms filled in from a number of, family offices now, and capital starting to flow through from that. So that will be finished, that this round will be finished, which is another $45 million raised. We’ll be finished probably about mid January, I would say, allowing for the Christmas break. And then we continue on with our retail selling. And we’ll then have a second round
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36:03
of wholesale and institutional. To prepare for the construction. You put 5 million, you’ve raised 25. That’s done. Yeah. You’re looking for an extra 45. Yeah. In the next four weeks. Correct. More or less. Yep. And then whatever is left. So what, 50, 70 or $75 million. Yeah. Yeah. I mean, not mistaken. For the construction. You are missing another $35 million. And that will be filled with retail sales. Whoever wants in basically, yeah. Correct. And then we’ll continue to sell. Less of a rush, I guess, for that because,
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36:39
I mean, the construction is 2 years, yeah. Exactly. We can do that at stages. You have capital calls, I imagine, on all of these, yeah. Correct. Yeah. That’s the idea. You have to have capital calls The idea at the beginning was to finance everything through selling the retail rooms, right. But obviously you don’t want to put pressure too much on your sales team and on our sales. Right. And on the marketing. So the idea of having institutional is to be able to, continue construction, don’t have delay,
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37:04
which is very important because then the delay cost you money in terms of capital and you have angry investors. So the idea is to have no delay. And the fact that we are selling on a retail level, we can de-risk institutional investors, because we getting money from, you know, the development profit, etc.. We’re not talking rupiah here. We’re talking USD. Not anymore. Yeah. So if you have $1 million, here. you know, hanging around somewhere, feel free to reach out. I know a couple of guys. Might be interested.
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37:37
And it’s interesting as well. Right. Because, obviously we want to grow. We have ambitions beyond, Bali too, ELLE have very big ambitions. Yeah. We had, we sponsored the idea in Bangkok, a couple of months ago. And we had, we were very fortunate for them to take us to the French ambassador house. And we sat down with all of their senior The real French connection. That’s where it all started. Yeah and it was a great dinner. And you’re like, okay, I just want to absorb, absorb this and type this in,
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38:09
And you did for, you know, maybe for one drink. And then ELLE is putting the pressure on to say, okay, we want growth. We want more, right? So part of this, the work that we’re doing now with the family offices, is looking at going beyond Bali as well. So, developing in other countries in Asia or elsewhere. So right now ELLE has two development projects, right? ELLE Paris and.. ELLE Paris, Amsterdam. And Amsterdam. Now Dubai.. And Miami. Miami and Bali is the next. I’m sorry, they did design Sao Paulo.
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38:40
Yeah, there’s a couple of project of villas in Sao Paulo and a couple of more projects in Europe. Yeah. I’m sure they working on things. Correct. Okay. But the signed deals are basically those ones. They’re very keen on having more operating hotel. Sure. The sky’s the limit I mean there’s so many countries in the world. You guys are looking into partnering with ELLE on a long term basis in order to open new venues elsewhere in Asia. The financing you’re looking now are getting the investor shares on GEONET
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39:13
or shares of that specific project. Different buckets of money. So the idea is what we wanted to do is to involve, early investors into the growth phase. So, you know, the journey we are embarking on, which is a long journey. But it’s not just a Bali journey, it’s now becoming a regional journey, which is very interesting for a lot of investors and people that have followed us and invested with us in the past, for some years. So there is this equity raise that we’ve closed and we’re closing
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39:43
in the next four weeks. And then after that, it’s moving on to, you know, the growth. Yeah. So there will be construction money that we need, obviously to as, as I mentioned, that line of credit that we’re looking to, to be able to, to not have delay for the first project, which is the most important. Right. When you talk to institutional money they’re always looking further. And what about the exit strategy? And what about in 5 years? Of course, yeah. So, it was good for us to actually,
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40:08
you know. It was an interesting exercise. Very interesting. Because if you’re going to. Like what we’re going to do next. Family offices. We haven’t started to build the first one. You have to think the third one. Exactly. We don’t really want to start business with you in anything less than 50 million. That’s correct. 100 million. And then you realize that around the world there for the right story and the right project and the right people and seem and track record. And I think what they liked about GEONET
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40:33
is that we invested a lot of our own money. And this is a growth story of of 12 years. It’s not start up, ELLE is the ideal history. And building hotels it’s fairly straightforward actually. Structural engineers, you get the team ready. So they understand that you can scale up. Some of our partners built 50 hotels. Our current partners within GEONET and GEONET developments built 50 hotels in six years. Correct. So we’re easy for them to do that so they understand that that scaling. But, yeah. So it’s very interesting conversations
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41:04
to have and say, well, let’s start at 100 million. Yes. Well, okay. How are we going to spend that money. Correct. Yeah. No, no, this is mine. Yeah, yeah. But if you have the right brand. Monopoly. It’s all about money now. The money and the story. We’re going to do great projects. Tell me again we just talked about that, but I want to emphasize a little bit more on that, on that GEONET equity. That’s open at the moment. Yeah. So we’re at 20% of our shares have been put out before.
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41:32
So hold on a second. Who is, who owns GEONET? Myself, Pierre, and our other partner, Alberto. Alberto. yeah. Okay. He’s our CFO. So you’re opening 20% of your capital to foreign investment. Correct. Outside investment. Sorry. Yeah. And that’s up to how much? In this particular one is 45 million AUD. So does the 45 million you’re raising from now till mid June. Correct. And then after that we then we continue to raise with family offices and different institutional money for construction funds
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42:02
and then retail, ownership of the hotel as well as what Pierre was saying before when our projects, we don’t just give them income, or the rights to their income for the next 50 years for the hotel room, but also all of the hotel assets. So if we do a deal with Louis Vuitton in the retail space then our investors make money when we sell drinks and cocktails in the nightclub after the beach club shut down, our investors make money. So 30% of out of the hotel revenue, it also goes back to our investors.
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42:34
So that retail selling is a very, very important part of our business and happens forever in the day. So we have the mix of developer income, or developer, capital injection, retail money, wholesale and institutional level, all blended together to take out these projects and, and any others moving forward. You, guys. So now it’s, I mean, there’s a time thing. Yeah. We are in December. It’s in January. But if you listen to this or watch this episode in a few months or even in a few years,
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43:03
I’m sure these guys will have something interesting, happening. So you can still reach out. Yes. And there probably some even better investments or different investments. Anyway. So, this is, this podcast still evergreen. this podcast still evergreen. Yes. Correct. All right. Cool. Well, I want to, discuss a little bit about Bali in general. There’s Covid, yeah. So there is a before and after. What is the impact on the hotel industry and so far, what you’ve seen, obviously your company has evolved.
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43:30
Do you see the market being drastically different before and after Covid or even after Covid. There is like the, you know, there was the Russian war and there was the revenge traveling and is the market different now? For when you talk about hotel asset class and we silo it to them I think like the Luc and Tui Blue, right. So developers are joining with bigger operators to produce a lifestyle asset. So the Luke for example, padel courts, retail, commercial space, hotels, restaurants, everything under the one roof.
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44:05
And that’s what we’re continuing to do with ELLE and our other projects as well. Building lifestyle, Destination. Hotel. It has to be a destination now. No longer just a hotel. Yeah. You can go there and stay there like for one week. You need things to do and as you know, in Bali traffic is, you know, can be a bit, Hectic. Daunting to go somewhere. So if you have everything on one spot, like a resort type and a destination and lifestyle destination with the right restaurant, the right, you know, activities, the kids club, etc.
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44:34
then you stay there and you don’t need to go anywhere. Yeah. It’s a Club Med all over again. Yeah. Kind of, yes, correct. But blended in as well with very much about, you know, a fitness lifestyle recovery. So it’s not just about having a massage anymore, right? Red light saunas.. Hyperbaric chamber, the best, gym equipment we’ll be working with techno to fit our gym. We’ve already working through that with our hotel operators. So I think travelers will expect, to get to a destination
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45:02
where they can have everything easy access, right? Yeah. That would be the biggest change. I say that certainly we see in hotels. And then what we’re building to, which is what the tourist one and therefore what does the investor want to be part of as well. Cool. I love this. I really love your company. I mean, I’ve been you know, a fan from the early days. All right. Anything you want to add before we, go to that? No. Go. Go. All right, so the IQ test. All right, so we have a little game.
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45:39
We’ve been doing in the past, recently. All right, no pressure, people. People will know what to do, and we don’t. As far as our viewers concerned. This is the first why we do it. Give us the rules again. So there’s no rules. Oh, good. Perfect. It’s a quick fire questions. Yeah. Okay. We have one minute. in which I’m going to ask you questions to the both of you at the same time. And you can only answer by yes no or pass. Okay. Yes. No. Pass. Good. Ready? Ready. Let’s do it.
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46:09
I mean, no, come on. There’s no there’s no trick here. Yeah, but this is this is where. This is easy. get the curly questions. Yeah, yeah. Okay. Okay. Is land banking smarter than building right now? No. Would you invest in a villa project without seeing the finished property? No. Can you disconnect from work for a full weekend? Yes. Pass. Do you trust Google Maps in Bali? Yes. Yes. Do you believe most mistakes are preventable? No. Yes. Is water flow one of the most underestimated risks in Bali?
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46:43
Water access. No. Do you enjoy being in control? Absolutely. Yes. Have you ever thought this would be impossible in Europe? Yes. Are you happier now than five years ago? Yes. No. Do we need to talk? Huh? Are you okay? Do you need a cuddle? I do, I do, I do. Is delegation harder than execution? Yes. Have you ever refused a client for ethical reasons? Yes. Do you prefer uncomfortable truth over comforting optimism? Uncomfortable truth. Comforting optimism. And that’s the last one. One minute.
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47:25
All right. Well, thank you guys. Very good questions. Thank you. So the URL of your website is? geonet.properties or elleresortandbeachclub.com elleresortandbeachclub I don’t know that one. If you want all the pictures and information about. Okay, we’ll put the link. Still free to ask both digital assets. Of course ELLE’s. You guys that don’t have millions of dollars, I mean, you still selling retail? Oh. Big time. There’s a bunch of. Yeah, yeah, it’s still. It’s still one of the most important
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47:54
layers of our financial, methodology is retail guys and giving those people a home and opportunity for investment, which is starting from 65,000 AUD Thought like 40,000 USD. Yeah. Buy in. Yeah. The average is higher. The average investment is higher than that, but it’s still an entry point. So for those that want, in a time when it’s so hard to invest in the Western world, they have that opportunity with us. Yeah, sure. Okay, cool. All right. Well, thank you very much. Thank you Omri. Guys, again, feel free to contact GEONET
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48:28
Or you can contact them through us if you want us to discuss them more. Happy to help. Thank you for following today. And look at the links below. Lots of links. So, GEONET, ELLE property. Yes. A lot of things that we going to, mention below. Don’t forget to subscribe if you haven’t, and please comment if you have any comments. If you want us to talk about something specific in the next podcasts, feel free to let us know. We’d be happy to consider your topics and, see you soon. Thank you.
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49:03
Excellent. Thanks, guys. See you in Dubai. Yeah. In Dubai. See you in Dubai. Yeah, because we are going to Dubai, for an events. Yeah. End of January. Chad will you be there? Of course. If we’re going to Dubai, I’m coming. Mr. Party. See you in Dubai end of January the date is not set yet, but probably like on the last week of January, Or first week of February. Somewhere along those lines. Yeah. Alright. Thank you very much. Thank you. Ciao, ciao. Appreciate it. Thank you. Bye.
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