Real Estate Investor Magazine South Africa May 2014 | Page 45

COMMERCIAL

assumes a minimum 50% ownership of operating
companies, ensuring that the forecasted returns on
each development are achieved.

rental pool and are fully managed and maintained by
professional and experienced hotel operators, often
under well known global brands,” Taylor explains.

“The approach of our group is to partner with existing
properties that have a track record of successfully
operating their businesses, developing the hotel and
resorts further, thereby increasing their bedroom
stock,” says Taylor.

Investors receive room revenue split between all
other room investors, a split of net income accrued
from all room sales after operating expenses plus a
monthly refurbishment reserve set aside for major
upgrades to the hotel are deducted.

The business model, which has proved extremely
successful in Europe, the United Kingdom, America
and Australia over the past two decades, is centred
on outright sectional title ownership of a unit or hotel
room rather than shared ownership options such as
fractional ownership or timeshare.

Rooms are sold fully furnished. The resorts operate
a reservations system to ensure that rooms are rotated
on a strict basis to even out occupancy for equal
distribution of income to hotel room investors whilst
managing the level of wear and tear on furniture,
fixtures and fittings.

“Hotel suites are of a sectional title nature, similar
to a residential apartment. Therefore investors have
the security of ownership of the property as they
would do from a traditional buy-to-let investment
property. All hotel suites are placed in each hotel’s

Each hotel is operated, managed, marketed and sold
by a professional hotel management and marketing
company which is selected by the developer according
to the character of a particular resort, the market in
which it will operate and its star grading.

www.reimag.co.za

REALE ESTATE BUSINESS DIRECTORY

May 2014 SA Real Estate Investor

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