Condotel Investments in the Philippines
For Metro Manila investment real estate buyers, condotels are good buy to rent property investments.
The buyers are investors in hotel-condos, a real estate product that combines the flexibility of ownership of a condo in a hotel setting. Popular in the United States, Europe and the Middle East, hotel-condos are just starting to pop up in the Philippines for the first time.
Unlike simple condominiums -- which owners can use as they please -- hotel-condo units are both investment and residential units that can be used by their owners for up to 30 days per year. The plus is that the owners can invest in real estate while having access to hotel amenities like a spa, gym, room services. The remaining time, the units' owners return the rooms to a rentable pool run by the hotel. As the units are rented out, the owners receive a split of the income. Alternatively, unit owners can live permanently in their suites and enjoy hotel living 365 days a year.
One such project recently announced, with Pacific Concord Properties Inc -- among the first developers to do a hotel-condo in Metro Manila -- submitting plans to build a 42-story twin high-rise at Shaw Boulevard, will be called Lancaster – The Atrium.
The Lancaster Atrium is a twin tower development that sits on a common podium with the Lancaster Suites Tower I, which was sold out in less than 18 months and is part of its hotel-condo program.
Units at Lancaster – The Atrium Tower A are priced at $34,250 to $275,000 -- for sizes ranging from 300 square feet to 1,350 square feet About 45 percent have been sold at press time.
Beth Collingz, Marketing director for PLC International Marketing Networks, which is exclusively marketing the Lancaster Suites and Lancaster – The Atrium Hotel Condominiums in Metro Manila, said condotels started appearing on the market following PCPI’s launch of the Lancaster Suites back in 2004. “We see a marked increase of interest from buyers who live Europe as well as from corporations looking to invest in Philippine real estate”. There have been a plethora of residential properties coming on the market, but not many Condo Hotel developments adding that, “in the currently hot Philippine real estate market no one felt the need to try out a product that had not been tested in the country before.
"The market for investment properties has shifted in part because of a booming demand for hotel rooms in Metro Manila and a weak dollar internationally. On a broader scale, baby boomers are retiring and buying second and third homes, and interest in real estate as an investment remains strong, when it comes to the market for hotel-condos, the Lancaster project is attracting international customers familiar with this type of investment opportunity. Collingz said
The Lancaster Atrium Tower A development will have 400 hotel-condo rooms and suites, a spa, swimming pool, business center, its own mini mall, shops and convenience stores and several restaurants. The project, located atop a common podium with Lancaster Suites Tower I is only one block from the Ortigas Center, Shangri-La Mall, Edsa Plaza Hotel and SM Megal Mall, will continue construction of its superstructure this year having already completed foundation works and put in place 5-levels of basement parking.
While it is possible to secure easy no prequalification, no down payment 6 year no interest payment plans for the Lancaster Atrium suites, Collingz said that most buyers purchase these properties with a small down payment of some 30% to reduce the monthly payments to around $400 a month for a Studio unit or take advantage of a 20% discount for outright cash purchases.
Unsurprisingly the hotel-condo investment trend in the Philippines will accelerate -- from Metro Manila to other major metropolitan hubs such as Cebu. PCPI’s Lancaster Cebu development is already sold out with Condotel operations will commence this March.
PCPI has appointed Lancaster Hotels, Land and Properties, Inc (LHLPI) to oversee the operations, sales and marketing, and asset management of the condotel. Guided with a clear goal of maximizing profitability, LHLPI will spearhead the management of the condotel as well as that of the entire condominium building.
LHLPI has likewise commissioned Resort Club of the Pacific (RCP), a management consulting company with vast experience in the hospitality industry. RCP’s officers have worked with recognized international hotel chains such as Shangri-La, Hyatt, Westin, Sheraton, Peninsula and Hotel Intercontinental. The key role of RCP is to ensure that hotel quality standards are met from the rooms to the services.
Collingz said that given the expertise of the hotel management team coupled with the prime location of the Lancaster condotels, we foresee a profitable operation in the years to come thereby ensuring maximum return on investment.
Statistics from the Department of Tourism indicate that the number of tourist arrivals to the Philippines has been consistently growing by double digit percentages for the past three years. In 2005, of the 2.3 million tourist arrivals, 1.7 million visited Cebu. In fact, an additional 40,000 hotel rooms are needed to accommodate the expected five million tourist arrivals by 2010.
The Lancaster brand of Condotel developments further validate the increasing demand for hotel rooms which make us more confident that our market and financial projections will be achieved.