Meet the Fractional consumer

Source: Fractionalownership.co.za

The types of mutual ownership today known as ‘fractional ownership’ originated over 700 years ago, and were originally used for boats and ships carrying cargo or used for exploration purposes. So says co-founder of fractionalownership.co.za and member of the South African Association of Fractional Intermediaries (SAAFI) Working Committee, Dirk Wilson.

“In America the concept and use has been in commercial existence for over 12 years, and it had its origins in the corporate aviation industry, the luxury boat and yacht industry and then, over the past few years, the luxury secondary homes market. During 2004 this was the fastest growing real estate market in the world, with a $500 million turnover during 2004 in the USA alone.”

So what types of people are interested in fractional ownership in South Africa? Wilson says a number of attributes have been found that may identify those most likely to invest: people with an established primary residence; the affluent and aspiring wealthy; the golfing community; the financially educated and investment-savvy; and those aged 30-plus (mean average age 35 - 55 years), with a multiracial profile - while city dwellers from Gauteng are your most likely candidates.

Explains Wilson: “In South Africa most enquiries around fractional ownership come from geographical financial and industrial hubs such as Gauteng and the surrounding areas (45%). A close second is Greater Cape Town (40%), with other regions making up the remaining 15%.

“Fractional enquiries and investment is currently being driven by professionals from the mining and minerals, financial, energy; and government sectors in South Africa. This could be attributed to the types of marketing media being utilised by fractional promoters and the demographics thereof.”

In terms of the Gauteng consumer profile, individuals in this area generally receive higher remuneration and have a higher disposable income than other regions in South Africa. Wilson says they also have more incentive to get out of the city, and generally don’t mind traveling in order to be able to do so. “The key element for investors in this region is having access to their holiday within 5 hours’ drive time from their home. It is widely acknowledged that the Gauteng consumer represents at least 80% of the fractional ownership buyers market.”

People in the Western Cape live in a tourism-driven economy which brings in droves of seasonal visitors from all over South Africa and around the world, and they are exposed to a constant flow of international visitors. Says Wilson: “Statistics are not readily available currently, and it is widely accepted throughout the industry that the consumer patterns of the Capetonian are the most difficult to define. This may be due to the landscape in which they reside, negating the need for the Cape Town consumer to even leave the city and its surrounds.”

Twenty-six per cent of the traffic on fractional ownership.co.za is international people showing interest in products available in Southern Africa. “Many of these visitors could be ex-pats looking at investing in their homeland and simultaneously benefiting from the well-performing property market, as well as non-ex-pats looking at purchasing holiday time in Southern Africa. In many instances international investors require fixed usage in block periods of time to accommodate travel and the seasonality of their visits.” The site has received enquiries from the following countries, in order of decreasing interest: United Kingdom, Canada, Australia, Germany, United Arab Emirates, and The Netherlands.

Wilson says that specific amenities that the consumers are looking for in their fractional ownership purchase are extensive amenities on or near a beach, golf course or ski resort; fitness centre, club room, pools, landscaping, bikes and laundry facilities; housekeeping services; resort toys such a golf carts, kayaks and boats; great views; luxurious furnishings and fittings; excellent on-site and hospitality services; family activities; upmarket shopping; watersports, hiking and 4 x 4 trails.

“Fractional ownership in South Africa is still really in its infancy, the industry only being around 4 years old. Given the growing interest in it and the pace at which it is growing, it is clear that this means of ownership, investment and enjoyment has yet far to go in our country.”

Contact Dirk Wilson on 072 591 0582; 021 556 5064; email dirk@fractionalownership.co.za; visit www.fractionalownership.co.za