Invest in prime 'bricks & mortar' holiday homes at a fraction of the price of whole ownership

Source: Seeff Fractional Ownership

“Nothing makes more sense than investing in fractional ownership now that interest rates are up and people are considering selling their holiday homes. People can sell their holiday home and with a fraction of the sales price, purchase a share in a luxury holiday home from as little as R165,000.” So says Henry Greyling, CEO of Seeff Fractional Ownership and founder member of industry watchdog SAAFI (South African Association of Fractional Intermediaries).

He describes fractional ownership as a path toward wealth creation that allows the average South African to acquire ‘brick and mortar’-type shares in world-class properties, in prime locations and at extremely competitive prices.

“People are looking more closely at the economics of fractional ownership, and finding that it is not just for the wealthy, even though the assets inevitably have a high monetary worth. Another benefit is that the opportunity comes without the hassle of buyers having to find their own syndicate partners,” Says Greyling. “Fractional ownership allows buyers to enjoy their holidays in ultimate luxury in extremely well maintained and managed villas, and to generate a return on their investment.”

He says that people are understanding that fractional ownership is totally the opposite of timeshare: “You don’t just own a week of time spent somewhere - you own a portion of the actual house, i.e. of the actual bricks and mortar. Also, you can sell this share through Seeff at any time and realise the capital appreciation on that property. In some instances owners of fractional title have realised returns of more than 40% within 18 months of purchasing.”

In the not-too-distant past, premier resorts such as Zimbali would have been out of reach of the average holidaymaker. Today, however, as deeded share owners, they can enjoy from between 2 and 4 weeks every year for between R399,000 and R565,000 at places like Zimbali or the Cape Town Waterfront. Other offerings include Barra Dunes Villas in Mozambique (R165,000), Sodwana Bay (R195,000), Sparrebosch at Pezula in Knysna (R465,000), Arabella Golf Estate in Hermanus (R495,000), Zebula in Limpopo (R420,000), Pinnacle Point in Mossel Bay (R495,000), and San Lameer (R295,000) and Shelly@Sea (R190,000) in KwaZulu-Natal. All come with superior furnishings (including leather lounge suites and plasma TVs), and the villas offer at least 4 bedrooms, 4 bathrooms, private pool, boma or golf cart (where appropriate), while apartments offer at least 2 bedrooms and 2 bathrooms with the same superior furnishings.

A recent highlight for the group has been the handing over of the first 6 of the initial 24 villas at Zimbali Coastal Resort, the premier residential, resort and golfing development set in a coastal forest reserve on the north coast of KwaZulu- Natal.

Greyling says that while people now better understand the concept of fractional ownership, many are not aware that exchanges can be made. “Say you buy a share in a villa in Pezula or Zimbali through Seeff, you can exchange/swop your allocated holiday with someone else who bought through us, at another estate. This offers the best of both worlds: you have ownership and capital growth, as well as flexibility. Seeff Fractional Ownership will soon also be able to facilitate international swops in villas in France, Spain, Portugal, Mauritius, Seychelles and many more.

Investor Willem Britz recently made use of the exchange system: “I purchased a share from Seeff in Zebula. With only one phone call, I could take my family on Christmas holiday to one of your magnificent villas in Zimbali for 10 days and end our holiday off in Pezula for a week…this investment is the best I have ever made!”

The crux of Seeff Fractional Ownership’s phenomenal success is their extensive back-up maintenance and after-sales management services, says Greyling. “This is unique to us. We see the selling part of fractional ownership as relatively easy, owing to our 4-year history and expertise in it. Our sales prove the point, as does our growth by 84% in 2007 over sales in 2006. We are still seen as the market leaders by far. We see the maintenance aspect as the cherry on the top in terms of our service. We have a superb management structure and back-office handling everything.”

This excellent support enables Seeff Fractional also to effectively manage letting of the units. “Letting is proving to be huge business and our investors are seeing really excellent rewards. The letting of our investors ‘unused time’ is running extremely efficiently. In addition, resales of their shares have grown by 320% over 2006, and this will form the basis of sustained growth in the future.”

Pointing out that the predominant trend among South African holidaymakers is to take between 3 and 4 weeks of leave a year, Greyling says this translates to them paying peak season rentals of up to R5000 a day. “That puts the price tag of an average 3-week holiday at around R105,000, depending on when they go. With fractional ownership now starting at around just R125,000, that amount of money could pay for the perpetual joint ownership of a luxury holiday home in less than one year.”