Estate Living Magazine Investment - Issue 34 October 2018 | Page 20

Capital On Bath
Invest
in a furnished
hotel apartment
Ever thought of investing in a swanky hotel apartment? Sectional title ownership of
hotel rooms or suites is on the upswing, due to rising demand for flexible corporate
accommodation.
‘The decline in the rand exchange rate over the past few years
has boosted South Africa’s popularity as an international venue
for conferences, events and business meetings,’ says the Rawson
Property Group’s managing director Tony Clarke.
‘In addition, there is a global trend among mobile executives
and professionals who work on contract or relatively short-term
assignments to opt for hotel suites rather than self-catering
apartments wherever they are working. It’s more convenient
to have everything handy, from meals and catering when they
need it to business services and meeting rooms on site,’ he says.
Several well-known properties have successfully been opened
up to private ownership in this way, including the Pepper Club
and the Cape Royale developments in Cape Town, the Krystal
Beach Hotel in Gordon’s Bay, the Riverside Hotel in Durban,
Zimbali’s Fairmont Resort, the Protea Hotel Parktonian in
Johannesburg, and the Protea Hotel King George in George.
The typical deal is that you purchase a unit and lease it back to
the hotel into its rental pool. There’s no agency fee, and you are
guaranteed a rental income, whether the unit is occupied or not.
The only condition is that you are usually required to buy the
hotel’s furniture package so that it can be furnished to its specs,
but this is usually at a good price, due to the development’s bulk
buying and connections in the trade.
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The latest kid on the block is The Capital Hotel Group, which has
four of its apartment hotels available to investors – The Capital
On The Park in Sandton, The Capital On Bath in Rosebank, The
Capital Pearls uMlanga Durban and The Capital Mirage in Cape
Town.
‘At The Capital, the rental contracts with us are for three years,
with the option to renew for up to nine years, and we give
you a guaranteed income for the same period, regardless of
whether the apartment is used or not. We also take
care of all the maintenance and upkeep of
your apartment, so it’s fuss free,’ says
The Capital Hotel Group MD Marc
Wachsberger.
You aren’t tied to this option,
however. You can also live in
your apartment, enjoying the
hotel lifestyle, or rent it out on
your own. Located in central
business districts, these three
properties already have a robust
rental market.
For investors who don’t have time
for maintenance upkeep, like business