NEW LUXURY CONDO/HOTEL DEVELOPMENT, GRAND CAYMAN
There are 5 condo buildings consisting of two and three bedroom units plus 3 penthouses, a total of 47 units plus the amenities including an 11,000 sq. ft. club house, 5,000 sq. ft spa, two pools, tennis courts and two restaurants among several other services provided.
This is a five star property located directly on the water with magnificent views out and minutes from all the restaurants, golf, beaches and shopping.
Building "A" consists of six 3-bedroom condos at 3,000 sq. ft each and one penthouse at 6,000sq.ft
The total sq. footage is approximately 28,000
the total selling price of the building is estimated at approximately $21,600,000 including all furnishings and fixtures.
The ADR for the 3 bedroom is $1,500 per night
The ADR for the Penthouse is $2,000 per night
The combined gross income for the building @65% occupancy is $2,609,750.00US per year
The gross return @60% of the rental income is $1,565,850.00US
The estimated increase in value of the property (Building A, 7 units) @ 3% per year $648,000.00
The total estimated gross return on the investment is approximately 10.3%
OR THE CONDOS CAN BE BOUGHT INDIVIDUALLY:
The units can be bought individually,however, as condos they are not broken out on their own lot. The units can be bought as a building or individually. The entire project sits on about 5 acres. Phase two will be on about 1.5 - 2 acres.
Post purchase the inventory will go right to the hotel operator. The rooms are put into the rental pool and the income will come from that. There are management fees and several other costs however, they are absorbed by the rental income. Insurance, FF&E, Utilities, staff etc.
There are two major international hotel chains that want to manage the property. The brand will be decided very soon.
There are no taxes on rental income at all in The Islands. There is a 7% stamp duty at the time of purchase.
All reservations are 100% refundable in order to guarantee the purchaser time to review the contracts and the pro formas set out by the management company once the name has been decided.
More info on the tend and success of Condo hotels and Fractionals. The forecast is very strong. The article can be checked out on the link:
Phase 2 for condo hotel investment is going to be released soon.
The building will have 12 units and be completely and full furnished to a 5 star specification. It is sold as condo hotel investment so the returns are in the 10-12% area.
There will be 4 units at 2,000 sq. ft and 8 units at 2,500 sq. ft.
The entire block will be released at $28,000,000US
OR BUY A CONDO IN THE ADJOINING RESORT AND GET UP TO 14% RETURN
The Resort is about to start "phase two" of the development. All of the plans are submitted, paid for, and the property is ready to start construction on the next phase consisting of 40 two bedroom units.
The two bedroom units will be sold at between $450,000 and $550,000US.
The structure of a condo hotel relies on the owners of the units giving their property to the management company to be placed in a rental pool. At the same time the asset is appreciating in value the ROI from the rental pool is providing a very high return. I have put together a brief and basic example of how the client benefits from this structure.
40 Two bedroom units sold as a package to one investor would cost $450,000US Each (plus govt. stamp duty)
The total investment would be $18,000,000US
The inventory will be put into a rental pool
40 two bedroom units provides 14,560 room nights per year
the Average Daily Rate (ADR) is $399.00US
The average hotel occupancy rate per annum is 65%
65% occupancy per annum is 9,464 room nights @ $399.00US per night
Gross revenue from the rental pool is $3,776,136.00US
The split is 45%owner 55% management fee
The gross return on the investment is approximately $1,699,261.00US Total
each units will have a gross revenue of approx. $42,481.52
The average gross rental return on investment would be approx. 9.4% per year
The average increase in condo properties in The Island has been proven to be between 5 and 10% per year for the last 15-20 years.
The rates and occupancies used represent a lower than normal occupancy and ADR.
Conservatively the investment can yield up to a 14% return including the increase in property values. Given the lack of properties in the area with this many available units, and other contributing factors within the management structure and branding of the Hotel, there is no doubt that the opportunity of the investor or investors is very sound.
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