Demand for 5-star lifestyle drives investment into hotel apartments
Hotel apartments offer an undeniable allure for buyers and investors. Aside from acquiring these for own use, they make for excellent investments and are sought-after with corporates who use these for travelling executives.
While popular across the globe, South Africa is the leading provider of hotel apartments on the African continent, especially in Cape Town's CBD and increasingly also in the Sandton area.
According to Ross Levin, Director for Seeff Atlantic Seaboard and City Bowl, there is a growing trend of hotels selling apartments to assist in their funding model, generally those located in luxury 4-5-star hotels. Top end hotel suites are generally priced upwards of R6 million to R35 million and more, depending on the hotel brand.
The most exclusive of these are located in the One&Only at the Waterfront, comprising of three luxurious penthouses with private pools and magnificent views that have sold for up to R110 million a few years ago and are today worth well above that.
Hotel suites at international hotel brands in Cape Town have sold at the Taj Hotel for up to R6 million and the Radisson for up to R18.5 million. Local hotel brands include 15 On Orange (sold for up to R11 million), Cape Royale (sold for up to R4m) and the Pepperclub.
Ten years ago, there were only a few hotels offering the opportunity to invest in your own hotel suite, but there are now many more options to choose from. JP Ricketts, Warren Emett and Alan Screen, Seeff's sectional title team for the City Bowl says there are currently more than twenty hotel suites on the market in the area. Some of the newest offerings are at the Radisson Blu where you can expect to pay upwards of R2.395m to R20m-R25.5m for the top units. At the exclusive Pepper Club, prices range from R3.2m-R17.5m. The 5-star Taj is also offering a limited number of suites, all luxurious furnishes at prices of R2,595m-R8,3m.
Rates tend to differ according to the hotel brand and what is on offer. At the Radisson Blu you can for example find a small apartment from R1,9m, but prices range to R25m for a top end penthouse unit. On a cost per square unit, rates can vary from around R45,000-R85,000/sqm based on the most recent sales at the Radisson Blu.
Why invest in a hotel suite though? According to Ricketts, these properties offer an excellent location as they are generally in the Cape Town CBD with easy access to the convention centre, Waterfront, Cape Town Stadium and other attractions, restaurants and the beaches. They also offer relatively easy access to the airport and business nodes in the city.
Security, access to hotel amenities and services with luxury living are part of the attraction. Most top-class hotels offer restaurants and even room service. It is also a status symbol to own a hotel suite, hence the attraction for wealthy buyers and investors, according to the agents.
There is also the opportunity to earn rental returns as many of the hotels offer a rental pool, although, says Ricketts, many recent purchasers are opting not to participate as they can achieve better returns on medium to long term rentals rather than short-term rentals.
Contact Seeff City Bowl on 021 423 9146 or visit www.seeff.com.
Photograph: The Taj - a limited number of apartments are available for purchase priced from R2,595m-R8,3m. Each unit is luxuriously furnished and equipped, and you have access to the hotel's 5-star amenities and services including a 24-hour concierge, valet car service, one of the city's top spas, a business centre and conference rooms, restaurant and tapas bar, swimming pool and gym.
Author: Gina Meintjes