14 | FRACTIONAL
NEWS US sales suffer massive fall By Amit Katwala
THE latest research from Ragatz Associates into the North American fractional real estate market has revealed a 38 percent drop in year-on- year sales from US$860 million (2009) to US$530 million (2010), reported
FractionalLife.com last month. The fi gures represent the latest in a series of drops refl ecting the ongoing trials of the US economy – in 2007 the industry recorded record sales of $2.3 billion. The research statistics, which cover
the US, Canada, Mexico and Caribbean, are made up from sales reports at 104 active projects, broken down into fractional ownership projects (priced at less then $1,000 per square foot), private residence clubs (over $1,000 per square foot) and destination clubs. Fractional projects accounted for
$107 million (20 per cent of sales value), PRCs for $242 million (46 per cent) and destination clubs for $181 million (34 per cent). The average annual sales volume in
www.opp.org.uk | APRIL 2011
Fractions on show at APITS
Fractional sales | fell by 38% in the US last year, a decline of more than $300m
the 104 projects was $1.2 million for the fractional developments and $3.4 million for the PRCs. Average prices per fraction were $121,000, rising to $271,000 for PRCs. Average price per square foot varied widely, from $590 in Canada to $1,100 in the US. The research, compiled by industry
analyst and consultant Richard Ragatz blamed the low numbers on a variety of factors including the uncertainty
Joining the right club
RESEARCH from destination club website Sherpa Report hs revealed the factors taken into account by consumers when choosing a destination club with choice, size and cost leading the list. The most important infl uencing factor
was the variety of destinations offered by the destination club. Nearly three quarters – 74% – of respondents gave this response. Members selected clubs largely based on where they live, where they like to travel and what they perceive as being a top vacation destination. “Destination clubs are an alternative to
villa rentals, fi ve star hotels or buying your own second home,” said Nick Copley, president of SherpaReport, “so in a way it’s no surprise that the old real estate adage of location, location, location still holds true. Nearly three quarters of the members we surveyed highlighted the variety of destinations as a key reason for joining.” Nearly half of respondents said the size
of the club was an important factor in their decision making process. Members who
had joined both large and small clubs named this as a top issue in selecting their club. For some, the intimate, boutique nature of a smaller club is appealing. For others, the large breadth of destinations offered by a bigger club is more attractive. Almost 70 percent of respondents
identifi ed price and value as key considerations - the affl uent membership is clearly still very focused on receiving good value for their money.
The Castello di Casole development Why buy?
The variety of destinations 74% The price was right for the value offered 69% The club structure 59% The size of the club 49% The services off ered by the club 44% Flexibility of the reservations 31% Friends or family are already members 21% Other 10%
www.sherpareport.com
in Tuscany, part of Timbers Resorts, is launching fi ve new real estate offerings for whole and fractional ownership. A collection of newly restored and
reconstructed farmhouses is going up for sale within the estate’s 4,200 acre site. The new units have been designed
to complement the development of the project’s boutique Hotel Castello di Casole, which the company hopes to open in April 2012. The development will comprise of
two “enclaves of private villas situated just below the hotel’s central courtyard
with views over the vineyards below,” says the company. “Both Villa Scuola and Sant’ Antonio are currently available for sale,” it adds, and “Villa Sant’ Antonio is a collection of seven restored luxury three- bedroom, three-bath villas with a private infi nity pool and terraces.” The price for a 1/12 fraction at Villa
Sant’ Antonio starts from €290,000. Villa Scuola fractions start from €275,000. Whole ownership offerings on the estate start at €3.7million. Castello di Casole picked up the
Reader’s Choice Award at Fractional Summit 2011.
of the USA’s economic stability, an almost complete lack of consumer financing and a glut of significantly discounted whole ownership vacation homes on the market. On a brighter note, fractional ownership fared better than whole ownership vacation homes sales, which fell by 60 percent during the same period, and roughly on par with timeshare sales which were down by 32 per cent.
Fractional awareness in the UK is set to be boosted by a special pavillion at the next A Place in the Sun Live Exhibition, at the NEC in Birmingham. The Fractional Ownership Consultancy has announced it will be running the special area at the show, which runs from the 30th September to the 2nd October 2011. It will feature a focussed fractional area with talks and seminars dedicated to informing visitors about shared ownership. The organisers says that the pavillion will be open to developers from across the globe to use to show their wares, and it will off er developers the chance to showcase their off erings and boost sales. Jerry Cobb of the Fractional Ownership consultancy said: “We tested the water in March and are amazed at how ready the fi nancially savvy consumer is to embrace the concept of sharing. It is time that we started the process of educating our customers.”
New Italian fractionals
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