Rental Returns with Dunas Beach Properties
Sol Melia will be operating the resort after completion although The Resort Group PLC (TRG) will retain ownership of the commercial assets, maintaining a long-term invested interest in the success of the Resort.
The delivery of TRG’s resorts will represent the very first European 5-Star resorts on Sal Island. The most prominent hotel currently is the RIU Funana/Garopa (Spanish Operator) which is certified as a European 4-Star hotel. This hotel is currently generating an annual occupancy rate in excess of 90%, while the on-island average is 80%.
Despite these on-island averages, TRG’s marketing literature promotes a conservative occupancy rate of 68% for the apartments and villas. This is despite the fact Dunas Beach Resort will represent the highest rated resort on the island, once completed.
The example below is based on a typical 2-Bed Apartment.
The daily rack rate projection below is pitched only €40 more per night versus a basic 38m2 standard room at the RIU hotel. Put into perspective, a two-bed apartment measures in excess of 80m2 (110% larger), with an additional bedroom, additional bathroom, separate kitchen, lounge, dining area and private outside terrace space. Comfortably accommodating a party of four.
The developer believes this projection to be very conservative versus the RIU’s basic rack-rate for a 38m2 standard room.
Ownership of the units will be completely freehold.
Cash-buyers opting into the rental scheme will be granted 5 weeks personal free use per annum.
SIPP legislation does not permit any private use for investors. SIPP investments are strictly ‘commercial’ transactions and as such the asset (property) must remain in the hotel rental scheme at all times.
