South African property investors have the opportunity to diversify their portfolios and take advantage of the growing British economy by buying a unit in an apart-hotel in the heart of Liverpool, says James Bowling, CEO of Monarch & Co, a company that specialises in residency and citizenship by investment programmes around the world.
So what exactly is an apart-hotel? Bowling says that it is an establishment that offers a combination of multi-use apartments. The apartments often have multiple beds and can be rented out to guests to make use of, depending on their requirements. “The concept of an apart-hotel started in 2008 when a conventional hotel in Liverpool came up with the idea in an attempt to gain more business,” says Bowling. “The hotel started offering its guests an apartment with 15 beds to cater for large groups of people who were travelling and staying together.”
Bowling notes that the concept was well received and demand for this type of accommodation soon grew in popularity. He notes that the multi-bed apartment became especially popular for stag and hen parties and it was soon booked out every weekend for around nine months in advance. The incredible demand prompted the hotel owners to create several other multi-bed apartments, which were as popular and saw the same occupancy rates as the initial apart-hotel concept. “The demand for the apartments was so great that four years after the initial apartment was offered to the public, the hotel group purchased a hotel with the purpose of it being exclusively an apart-hotel,” says Bowling. “The project involved redeveloping an existing hotel into one that offered 111 beds spread over several themed floors. The plan for the hotel also included its own bar and night club, making it the ideal one-stop location for larger groups.”
Last year another building was purchased on the Liverpool waterfront and was redeveloped to create a completely unique apart-hotel. Comprising of 65 historically themed apartments, the apart-hotel offers over 350 beds, a rooftop bar, fully-equipped spa and a grand hall designed for functions and weddings. Bowling says that the newly developed apart-hotel boasts period features and luxury rooms at competitive prices. “Once again the apart-hotel concept showed that it was a winning formula with bookings for accommodation and other functions largely outperforming expectations.”
According to Bowling, the demand for apart-hotels continues to see growth, opening up opportunity for investors. “These types of hotels work well for groups who are travelling or touring and wish to stay in reasonable, but good value-for-money accommodation. There are a particularly large number of football fans that frequent the Liverpool area, which has given rise to the concept of a football themed apart-hotel in the heart of Liverpool’s city centre. This development, which will be tailored to Liverpool Football Club’s and Everton’s millions of domestic and international fans, will offer investors the opportunity to buy one of the apartments and benefit from the growing apart-hotel concept and the large numbers of tourists frequenting the Liverpool area,” says Bowling. “Both the Liverpool Football Club and the Everton Football Club have a massive worldwide following and fan base. This new apart-hotel will be the ideal destination for these fans who are either coming to watch one of the fifty football matches the city hosts a year or looking for a more interesting place to stay.”
He notes that the establishment will offer accommodation, office space, a pre-let gym, car park and a Bill Shankly Museum, which will comprise of never-before-seen memorabilia and will be curated by Shankly’s grandson, Chris Carline. Shankly is widely recognised as the father of the Liverpool Football Club, and the person who unlocked the club’s full potential and led them to many victories.
According to Bowling, there are 83 units in total, comprising of 61 hotel room units and 22 serviced apartment units. The cost of each unit will depend on the size of the unit, with each square foot priced at £200. “Investors can expect a yield of around 8.5% from the first year to around the third year, while in the fourth year they can expect 9.5% and in the fifth year 10.5%. There is a buy back option between years three and ten, with the units bought back at a 10% uplift,” says Bowling.
He notes that the purchase process has been made as clear and transparent as possible. “It’s a very simple process that starts with the investor selecting a unit. Then they pay a £2500 reservation fee and instruct solicitors. An amount of 50% the purchase price will be due on the exchange, with the remaining 50% due on completion. Monarch&Co are able to assist investors in the purchase process from start to finish and guide them through the process as efficiently as possible,” says Bowling. “It is a unique opportunity for investors to see a healthy return through a relatively new and exciting investment model,” he concludes.