PROPERTY: Own the Hotel Lifestyle
Recent Gauteng Business News
Pam Golding Properties’ MD for the Western Cape metro region, Laurie Wener, says the concept of purchasing hotel rooms and suites on a sectional title basis started some years ago, chiefly as an attractive investor product. “Many developers offered the option to place the units in a rental pool with guaranteed returns for a few years, which reduced the risk in new establishments,” she says. “While there is still certainly a market for investors of this kind, most of whom only utilise their units for a fixed period each year, we are also increasingly seeing other buyers enter the market – including those who use their hotel suites as primary or secondary places of residence, as well as corporate buyers purchasing suites for the use of their executives and guests. There are now a wide variety of options available with regard to ownership, occupancy terms and investment structures. In general though, most of these units are sold on a sectional title basis, which offers the purchaser the security of tenure by title deed.”
Many of the hotels built in Cape Town in recent years have included plush penthouses on their top floors, ranging in size from 120sqm to as much as 600sqm, and offering top-class fittings and fixtures, panoramic views, and sometimes even private pools and decks. Buyers enjoy the security of a safe, convenient and luxurious lifestyle with minimal personal responsibility, dedicated secure parking, and access to the full range of the hotel’s service and amenities. These can include everything from laundry and housekeeping, to room service, gyms and pools, event managers and florists, as well as concierges, valets, and limousine service. “Attractively for the executive user, the package might also include use of the hotel’s business facilities, including boardrooms and conference venues, secretarial services and free wireless internet access via broadband,” adds Wener.
An important factor to consider when buying a hotel suite is the identity of the hotel operator. Wener points out that an established, well-branded hotel operator with a proven track record will ensure high occupancy levels for those making use of the hotel rental pool, facilities that are maintained in good order, and a standard of service commensurate with the rating and the brand.
“Some hotel suites are sold with obligatory rental pool agreements in place,” Wener says, “which commit the unit to a rental pool for a fixed period of time – or in some instances, permanently – as part of the hotel’s accommodation. The owner may be entitled to usage for a defined number of days per year, subject to availability, and rental returns are then split between the hotel operators and the owner of the unit on a predetermined basis. The benefit of this arrangement is not only the potential for rental income, but also the fact that the furnishing and maintenance of the unit then becomes the responsibility of the developer or hotel operator, so as to ensure uniform standards and grading.”
Alternatively, buyers may choose an option without a rental pool obligation, in which case they are entitled to furnish their unit individually, and may come and go as they please, while still having access to all the hotel facilities. “This is particularly popular with buyers at the top end of this market, where some have private access and concierge service to their penthouse suites,” says Wener.
Business News Sector Tags: Property|