Investment Details 2019-09-20T09:37:55+00:00

Investment Details

Every buyer of our Sectional Title hotel units gets the same income and growth:

  • Freehold Sectional Title ownership of one of 300 almost identical hotel suites of approximately 55 sq metres, including a 7 sq metre balcony. These suites are in a tower block of 22 typical floors.
  • Ownership (Excluding Content) of 1/300th of all the public rooms, restaurant, bar, conferencing areas and back up areas such as kitchen, storerooms and staff areas. This ownership comes as a result of all these areas being classified as “common areas” in terms of the Sectional Titles Act. So the revenues generated in these areas, and the costs associated with those areas and generating those revenues will be apportioned equally between the 300 suite owners.
  • 1/300th share of the net benefits of the lease from the City Council, valid until about 2034, of the Parkade. This resulted from the Braamvest Trust ceding the rights and benefits of its lease agreement with the City Council (the “City Council Agreement”) for the benefit of the Income Pool.
  • ALL income is pooled. That is revenue not only from the 300 suites but also from the food and beverage trade in the hotel, the conferencing trade and the net parking and other revenues generated. All expenses are then similarly pooled. The 300 suite owners then each receive 1/300th share of 80% of the TOTAL net income from all hotel operations.
  • The hotel Management Company receives its only profit as a 20% share of the total net income from hotel operations. So the management company must make profits for the owners in order to make a profit for itself.
  • Unlike many other Sectional Title hotel or condo-hotel schemes, there will be no innate conflict of interest between the hotel operating company and the hotel suite owners. There can be no grey areas as to where net revenues must be apportioned – they all go into the communal pot, and are shared as described above.
  • All costs and all repair and refurbishment costs are costs to the TOTAL revenue pool, and the hotel Management Company bears its pro rata share, as do all the suite owners.
  • If there is a shortfall each owner is levied 1/300th of the shortfall. The hotel operator does not contribute to the shortfall but it then makes nil on its 20% profit entitlement.