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Expat Investor : August 2009
EXPAT PROPERTY Apart-hotels boosted by credit crunch global economic turmoil, the Philippines is attracting the attention of leading international investors. The real estate magnate Donald Trump is putting money into the country’s economy. His company, the Trump Organisation, and two other companies are investing in a $1 billion luxury leisure facility in Subic. In the current climate of economic turmoil apart-hotels have become a more attractive investment, according to Asset Property Brokers, a Bristol based hotel property specialist. John Scott, Asset Property Broker’s Finance Director, reports, “Apart- hotels, with their focus on yields rather than speculative capital gain, are particularly relevant in today’s property market.” Together, Asset Property Brokers and Filipino developer, Paradisya Land, have launched a new apart- hotel project, Blue Coral Resort and Spa, Mactan Island, the Philippines. Blue Coral Resort and Spa offers 140 properties, ranging from £59,000 studios to £170,000 three- bedroom poolside villas, and luxury facilities such as a gym and casino. The resort, managed by Continent Hotels and Resorts, has secured a five-year booking with top South-East Asian tour operator Oriental Spirit. This, says Asset Property Brokers, will ensure an 80% occupancy level, on a rolling five-year contract, providing guaranteed returns of 13.4% to 19.5%, depending on the property type. Up to 60% financing is available via a major Philippines bank. Mactan Island has many attractions for tourists, including clear tropical seas, powder-white sand beaches, superb reef diving and golf courses. Its international airport also makes the island easily accessible. Even against a background of Asset Property Brokers provides these top tips for investors looking to reduce risk when selecting a hotel property. ? Look at the track record of the managing company by examining previous developments. ? Check if the management company is a respected name in the industry. ? Is the project in the right location for the target market? For example, a hotel for the business market must be in close proximity to a main city with good transport connections. Tourist destinations must also appeal. For example, beaches and attractive climate for sun searchers and maybe forests and mountains for outdoor activity holidaymakers. ? Find out what occupancy rates are expected and the rates of other hotels in the area. ? Does the hotel or resort offer facilities such as swimming pools and spas to attract its target market? Tourist resorts providing better leisure facilities than competitors will be more appealing for customers. ? Make sure operating costs for the apartment or villa are clearly stated. There should be a breakdown of deductions for management and other operational fees on the earnings the property generates. ? Concerning viability of a project, examine other income streams, for example events and conference facilities. The more variety, the less the risk. ? Is the nearest airport served by a limited number of airlines? Most good hotel operating companies will have thoroughly analysed the business case of their project. However, in the present climate, when airlines are going bust, make sure the destination is accessible via an airport serving a large variety of routes with many airlines. ? It is important to consider entry price. In some locations, such as London, New York or Tokyo, entry prices are very high, and yields can be low. ? Can the developer provide investor testimonials? If investors at other projects have benefited, your investment is also likely to perform well. Dispute resolution without the agony haven’t got the evidence to support your claim. The UK’s Deposit Protection Service (DPS) reports that the majority of tenants are respectful of the properties they live in so it’s easy for landlords to become complacent after a few good tenancies and put aside making proper provisions in case a dispute arises. It’s every landlord’s nightmare. Your tenant, who initially seemed a decent and upstanding citizen, leaves the property in a significantly worse state than when they found it – scorch marks in the carpet, stains on the walls and rubbish in the cupboards. When you look to reclaim some or all of the deposit, you find you However, says the DPS, it’s important to remember that if a tenancy is escalated to its Alternative Dispute Resolution (ADR) process then the burden of proof lies with the landlord to show that they are entitled to claim some or all of the deposit. Here are some simple steps you can take to maximise your chances of success: Submit your evidence on time You only get one chance – once the deadline’s passed, that’s it. Submit relevant and accurate evidence ? Your Assured Shorthold Tenancy agreement (AST). This forms the basis of your claim – without this, your case will more than likely fail. ? Photographic evidence is your An update on the heart of Cyprus The capital city of Cyprus is Nicosia; set inland almost in the centre of the island, it’s an incredibly historic city dating back beyond 672 BC, and today it's packed full of fascinating architecture and amazing relics from Cyprus’ absorbing past. The property market and subsequent investment opportunities in Nicosia differ to those across the rest of the island. There are year- round buy-to-let opportunities at all levels of the marketplace, making it ideal as a centre for all investors to consider, no matter what their budget. Aristo Developers say the demand is based on solid fundamentals such as the fact that there is a growing student base at the university, there is constant demand from embassy staff and governmental staff, as well a steady and stable requirement for accommodation from international businesspersons. From the Engomi region of the city, where it’s high-end real estate catering, to the many international embassy staff who reside in Nicosia, to the city centre and its immediate suburbs, where demand for apartments and penthouses is “intense”, there are opportunities for all investors. According to Martin Pearce,UK Sales Manager of Aristo Developers, Nicosia currently presents the perfect opportunity for investors. “Those seeking strong and consistent rental yields as well as capital appreciation potential should take a closer look at Nicosia. There is year-round demand in the city for quality accommodation, and tenants are prepared and able to pay well for the right property type. What’s more, an investor can rest assured in the knowledge that demand is very broad in Nicosia, and it’s consistently strong because the city is developing and advancing its international reputation as a financial and business hub, and as a centre of learning. This means increased numbers of tenants come to the market each year, pushing up demand and squeezing supply. Naturally, this upside pressure on the availability of accommodation units creates the perfect climate for rising property prices and increased monthly rental rates.” Aristo currently has two projects under construction in Nicosia that it believes are ideal for investors targeting buy to let opportunities in this city. The Anemone Court high- end apartment development is situated in Lykavitos, which is right in the centre of Nicosia. Here, the real estate is being constructed to appeal to local tastes. The one, two and three bedroom apartments are luxurious, have stunning cityscape views and come with covered parking - prices start from just €144,500. The other offering from Aristo is Iris Court. This development is set in Strovolos, a suburb of the city popular with families and young professionals. The spacious two, three and four bedroom apartments have views across the city and are designed for the longer term resident in mind. The architecture is modern and progressive, and the apartments are designed to be spacious and functional. Prices start from €229,000. For more information, visit www.aristodevelopers.com. July/August 2009 ? EXPAT INVESTOR 23 best tool in proving a case. Remember, as the DPS needs to remain impartial, it can’t chase a landlord for this so take time at the beginning and end of the tenancy to log the condition of the property. Also don’t forget to follow the guidelines fully, that is, photos must be signed and dated by both parties. Readers can download an essential guide to dispute resolution along with a guide to best practice in deposit protection and a host of other information that will help you get the best out of your letting. Log onto www.depositprotection.com
May June 2009
September October 2009