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.