IFA Hotels & Resorts has launched its first hotel ownership program, the Movenpick Hotel & Residence Laguna Tower Dubai.
The new property ownership concept enables purchasers to buy a hotel room or suite on a freehold contract, receive 30 days usage a year, and benefit from a rental income, as the rest of the inventory is handed over to Movenpick to operate as a five-star hotel.
The Movenpick Hotel & Residence Laguna Tower Dubai, due to begin construction by the end of the year, will offer 120 hotel rooms and suites, as well as a host of traditional hotel amenities, including restaurants and bars, health club, swimming pool, and retail outlets.
“This is the first time that a branded freehold hotel product has been available in Dubai,” said Werner Burger, president & COO, IFA Hotels & Resorts, at the press launch. “There’s a need for a buyer to invest in a product like this,” he added.
Owners will receive up to 30 days to use at the hotel when they wish per year, and will be guaranteed an 8% return on investment for the first three years, Piaras Moriarty, director of IFA’s Palm Vacation Club, explained to Hotelier Middle East. After the first three years, owners will receive an annual share of net room profits from the hotel.
“IFA’s new ownership program represents a unique opportunity for mid-tier investors to participate in hotel ownership, which has previously been the domain of high net-worth individuals. The hotel residence model is well established in more mature hotel markets such as the US and South Africa, however, we are seeing an emergence of this type of product coming into the region. Investing in this type of programme is an attractive alternative for investors wishing to diversify their residential and commercial property portfolios, with the added benefit of getting some personal usage out of the investment,” commented Patrick Smith, vice president asset management, IFA Hotels & Resorts.
The Movenpick Hotel & Residence Laguna Tower Dubai will be managed by the Swiss hotel chain following the formation of a partnership between IFA Hotels & Resorts and Movenpick Hotels & Resorts. The two companies plan to develop hotel residence projects throughout the Middle East, Europe, India, Asia and Africa; markets they see offer additional opportunities of this new branded investment product.
IFA, which already has hotel and timeshare projects in Lebanon, Portual, Tanzania and South Africa, as well as an interest in the Golden Mile on The Palm, is also considering the set up of an internal exchange system to enable members to use other resorts.
“We will see similar products coming up,” confirmed Burger. “We are making a big effort to formulate the information to educate the buyers. It will be a new product, so it is important to take a broad view of how this works in other parts of the world.”
IFA claims hotel residence ownership reduces the risk in owning, managing and renting a property and it offers buyers peace of mind, as well as the means to be a part of Dubai’s two biggest growth industries — hospitality and property.
“Mövenpick Hotels & Resorts are delighted to partner with IFA in this exciting new venture and are committed to deliver the highest standard of quality and service to the Mövenpick Hotel & Residence Laguna Tower Dubai, ensuring that owners and guests can be guaranteed five-star service all year round,” said Andreas Mattmüller, Senior Vice President Middle East Mövenpick Hotels & Resorts.
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