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The future of buy-to-let
| Fractional focus

Stephen Harris
A piece of
the action
Developers have bought into fractional, and agents
are slowly coming on board but are sales being
made? OPP decided to fi nd out
an investment, Ward says shared
ownership hasn’t put off clients
looking to make money. “We’ve always
had very positive conversations about
the fractional model. We’ve also had
a good level of customers doing
repeat business with us, buying more
fractions or even a whole room when
they realise the potential for more
While there seem to be better
prospects at the lower end, some
luxury properties in the high-end
segment where fractional began are
also reporting an uptake in purchases.
“The best sales for private residence
+10% -19% -27%
clubs (PRC) by far have been among
the more expensive projects,” says
UK farmland returns Fall in UK house prices Fall in UK commercial
Peter Kempf, former chief executive
in 2008 in 2008 property in 2008
The news that Seasons of PRC consultancy DCP and now
Holidays had sold out a head of his own company, Kempf
fractional resort in Spain International. “For example, Palazzo
Source: Bloomberg News, January 2009
last year sent ripples of excitement Tornabuoni has had ten sales in the
• Freehold ownership of prime UK farmland
through the industry. In one of last two and a half months. Last year
• Existing farming tenants with all purchases
the toughest periods the overseas kept getting better as it went along.”
• 7.8% guaranteed cash income from rents paid quarterly for 7 years property world had ever faced, here
• Target annual capital growth of 10%+*
was a company actually making European prospects
• Socially responsible investment contributing to global food security
fractional sales – and it wasn’t alone. Nick Turner, VP and head of new
Pestana Properties says it sold business development for Europe
• Pension eligible commercial property investment with additional tax benefits for UK residents
more fractional units at its Carvoeiro at exchange network The Registry
• Generous commissions and introducer’s fees paid
golf resort in the Algarve last year Collection, says the fractional market
than in 2008 or 2007, while fractional upwards by some larger deals). Marketing manager John Ward says has now more clearly split into lower,
consultancy The Best Group claims £2 Another company reporting buyers are attracted to the aff ordable middle and high-end segments. “In
million worth of sales across a number fractional success has an even lower price, the branded golf course and the second half of 2009 there was
For further information on the perfect property investment for these turbulent
of projects in the ten weeks since the entry point. In fact, sales levels at the expected investment return. success at both ends of the spectrum;
times, please contact Land Commodities® on the contact details provided below.
start of November last year. Ponta do Pargo in Madeira were While fractional is generally thought but selling properties in the mid-
A closer look at these sales reveals suffi cient last year for developer and of as a lifestyle product rather than market was a diffi cult place to be ARKE
some interesting trends. Seasons sold investment agent Morgan Forbes to
all its units as upgrades to former raise the price of its 13th fractional We’re seeing more UK buyers but also German, Swiss, Austrian,
UK local rate number - Tel: 0845 500 5001 • Fax: 0845 500 5002
timeshare customers, for example. shares from £15,620 to £17,914 as the Spanish, French, Dutch and even some people from Hong Kong
International - Tel: +41 44 205 59 70 • Fax: +41 44 205 59 71
Best Group’s impressive fi gure was project moved into its third phase. and Australia. The advantage of selling to Europeans is they are
Land Commodities Asset Management AG, Blegistrasse 9, CH-6340 Baar, Switzerland
spread across 25 transactions, working Construction has also begun on the not at all aff ected by exchange rates, unlike buyers from the US
out at an average of £80,000 per sale Nick Faldo-designed golf course and UK.
(although this fi gure is likely skewed attached to the hotel. Peter Kempf, Kempf International
*Forecasted capital growth is based on actual historic average annual rates of capital growth for UK farmland of 9.8% over the last 10 years, 13.5% over the last 5 years and
18.1% over the last 3 years. (Source: Average historic prices from RICS Rural Market Survey H1 2009 and Knight Frank Farmland Index Q2 2009) As ever, past performance is
no guarantee of future performance.
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