Century Properties pioneers hotel fractional ownership

MANILA, Philippines - Century Properties Group Inc., the upscale real estate firm of former ambassador Jose E.B. Antonio, is pioneering in the country the concept of fractional ownership for a hotel property in the newly-announced P2.5-billion joint venture project with AccorHotels in Mandaluyong City.

Tim Hallett, Century Hospitality and Leisure Inc. chief operating officer, said construction of the 41-story, 310-unit Novotel Suites Manila will be financed through a combination of debt and equity from the sale of residential units and the sale of preferred shares through the Century Fractional Ownership Program.

The Century Fractional Ownership Program, the first of its kind in the country, allows the purchase of preferred shares of Century Acqua Lifestyle Corp. (CALC), a subsidiary of Century Limitless Corp. which, in turn, is a subsidiary of Century Properties Group Inc.

Hallett, who also heads CALC, said the shared ownership program is a massive market in the US and Europe, but is relatively new in Asia.

“We are absolute pioneers in the Philippines. There is one other product like ours, which was recently launched in Phuket, a development of a Singaporean developer which is a hotel product,” he said.

“We see that this is positive for us. We certainly believe that the product, the structure that we’ve created is the right thing for the Philippine market, the current economy as it is and the desires of most people to make a little bit of money and enjoy lifestyle,” he added.

The company is offering 152 units in the 41-story tower for the shared ownership scheme.

“This gives the subscribers of the preferred shares a number of usage nights in the hotel in a year with the remainder of the fraction being leased out. Owners will then be able to enjoy the benefit of a financial return on the lease,” Hallett said.

The company official said this fractional ownership model is different from a time share scheme, which usually comes without ownership and is limited to the usage rights of the property.

“You usually don’t own equity, you don’t own any real estate (in time share scheme). You just essentially are pre-paying your vacation time,” he said.

There are a total of 608 shares being sold – 488 in the studio units and 40 each on the three categories for the one-bedroom units.

The selling price for the studio unit fractional ownership or preferred Class A is at P2.17 million; the deluxe one-bedroom or preferred Class B at P3.11 million; the superior one-bedroom or preferred Class C at P4.98 million; and premiere one-bedroom or preferred Class D at P5.77 million.

“We have a scheme during the development period, which means that the investor will pay equivalent to two months installments as downpayment and equal monthly amortization,” Hallett said.

The program is registered with the Securities and Exchange Commission (SEC), protecting investors from issues arising from fractional ownership rights.

“CALC has been approved and regulated by the SEC. All the issues, like usage rights, exit strategy, calculation of the owners’ return, are very well defined and are all set out in the prospectus owner’s return,” Hallett said, noting that each of the owners will enjoy a return equivalent to 40 percent of the net room revenue.

Century Properties is targeting overseas Filipino workers (OFWs) looking for investments and investors looking for new kinds of investments to supplement existing ones.

Hallett said the innovative nature of the product is really going to drive the success of this program.

“At the end of the day, we’ve got all the strengths. We’ve got a strong brand and benefits of being part of the Century Properties Group to meet the demands of the OFWs investing back here,” he said.

Source: The Philippine Star | June 26, 2015

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