Numbers Without Context Are Just Marketing
Every real estate investment opportunity claims a strong return. The question is not whether the number exists — it is whether the assumptions that generate it are defensible. This article shows the complete math behind Marlaca IV's projected 21% ROI, including every variable that drives it.
The Starting Point: What 21% Means
The headline ROI figure for Marlaca IV 1-bedroom units is based on a specific set of inputs. Understanding what the 21% represents:
- It is calculated on the total capital invested (purchase price), not on equity
- It represents the annual net rental yield before income tax, after management fees and operating costs
- It does not include capital appreciation — which, based on comparable asset trajectories in South Lombok, adds a further layer of total return
For a €165,000 1-bedroom villa, a 21% net yield represents approximately €34,650 per year in rental income after costs.
The ADR Assumption: €145 per Night
The daily rate assumption that anchors the model is €145 per night for a managed 1-bedroom villa in Kuta, South Lombok.
This is a current market rate, not a projection. Comparables in the Marlaca I and II portfolio — both operational in the same area — have delivered average daily rates of €130–160 depending on season and villa specification. The €145 figure sits in the conservative centre of this range.
Key drivers of ADR in South Lombok:
- Premium surf proximity (Kuta is one of the top-rated surf destinations in Indonesia)
- MotoGP and Mandalika SEZ brand visibility driving traveler quality upward
- Limited supply of managed, quality villa product relative to growing demand
- Corporate and international group bookings that command higher rates than leisure solo travelers
Occupancy Assumption: 65% Annual Average
The model assumes 65% occupancy on an annualised basis. This represents 237 nights occupied out of 365.
The seasonality profile for South Lombok runs:
- Peak (Jul–Sep, Dec): 85–95% occupancy
- Shoulder (Apr–Jun, Oct–Nov): 60–75% occupancy
- Low (Jan–Mar): 40–55% occupancy
A 65% annual average is achievable within this profile and is consistent with the documented performance of Marlaca I and II properties over the past 18 months of operation.
Gross Revenue: The Top Line
At €145 ADR × 237 occupied nights = €34,365 gross annual revenue.
For 2-bedroom units (priced from €225,000), the ADR assumption rises to €190 per night, reflecting the premium for additional capacity and the profile of guests who book larger villas for groups or families. Gross revenue for 2-bedroom units at 65% occupancy: approximately €46,350 per year.
Cost Structure: What Comes Out
Operating costs are the critical variable that most investment presentations understate. The Marlaca model is based on actual operational data from our managed portfolio:
| Cost item | % of gross revenue |
|---|---|
| Management fee (Marlaca) | 20% |
| Cleaning & laundry | 5% |
| Maintenance reserve | 4% |
| Utilities | 3% |
| Booking platform fees | 3% |
| Insurance & local taxes | 2% |
| Total operating costs | ~37% |
Net operating income = 63% of gross revenue.
For a 1-bedroom unit: €34,365 × 63% = €21,650 net annual income.
Net yield on €165,000 investment: 13.1% in cash terms.
Where Does 21% Come From?
The 21% figure includes capital appreciation based on Marlaca I and II precedent — where comparable assets have appreciated approximately 8–10% annually as the South Lombok market has repriced following Mandalika SEZ development.
Total projected return breakdown:
- Net rental yield: ~13%
- Capital appreciation (conservative): ~8%
- Combined annual ROI: ~21%
This is a combined return metric. The cash yield component is fully documented and verifiable. The appreciation component is based on comparable asset performance but is, by nature, an estimate.
How to Stress-Test the Model
Investors who want to validate the assumptions independently should focus on three variables:
1. ADR sensitivity: If average daily rate drops 15% (to €123), annual net income falls to approximately €18,400 — still an 11.1% cash yield on €165,000.
2. Occupancy sensitivity: If occupancy drops to 55% (below the low-season benchmarks), gross revenue falls to approximately €29,100. Net income at 63%: €18,300 — an 11.1% cash yield.
3. Combined downside: If both ADR and occupancy disappoint simultaneously — €130/night at 60% occupancy — net income is approximately €19,800, a 12% cash yield. This remains a materially better return than most European real estate markets.
The model is conservative enough to hold under significant assumption deterioration.
The Bottom Line
The 21% ROI projection for Marlaca IV is a transparent combination of a documented 13% cash yield and an 8% appreciation estimate consistent with comparable asset performance. It is achievable, stress-testable, and underpinned by real operational data from our portfolio.
For investors who want to review the full financial model, including unit-specific projections, our team provides a private briefing on request. The numbers presented here are the basis of that conversation — not a substitution for it.