Generate a high income for life, investing directly into International Hotels and their freehold land. Ideal for generating long term income

What is the opportunity?

There are various opportunities of this type, including one hotel group which offers shares in Closed Ended Property Portfolios (CEPP’s), within which the freehold and trade of a hotel is held. Currently there are opportunities in Fernie (Canada), in Cape Verde & in the UK.

What is the aim of the opportunity?

To generate an inflation proofed, life-long income at 20% to 80% plus of the original capital invested, having received back just short of the original capital after 3 years. This may seem incredible but it is an authentic opportunity to invest at ground level in a business opportunity. Our view is that as long as this investment forms a small part of the assets owned, then the potential rewards justify the investment gamble.

How does it work?

The investment is made as the build commences, the intention being to return investors capital at the end of the build phase (typically 3 years). The Investor, who is then a shareholder, receives an ongoing dividend stream which will differ from project to project and which is paid from Investors’ share of Gross Operating Profit. Investors are buying ordinary unlisted shares in a UK Ltd Company and then getting their money back whilst retaining a shareholding.

The hotel group hopes that once the investors get their money back, they will invest into another project and repeat the process. This way, after a relatively short period of time, they will have built up shareholdings in a number of UK companies providing them with a dividend income on a regular basis, having had their original investment back.

Investors receive a share of the gross operating profit of the hotel. The hotel operator also receives a share of the gross operating profit as well as a % of the turnover. All parties concerned are interested in making as much money as possible as they all have a vested interest in the results.

There follows some further information on the Cape Verde opportunity, which has already raised £32 million and currently has £4.5 million of capacity left.

Cape Verde

• Experts predict this will be the next hot tourist destination
• All year tourist season with an almost tropical climate
• Europe’s most easily accessible tropical destination
• Flight times from UK a little over 5 hours

Sal

• Ownership of land and 1,000 room 5* all-inclusive hotel complex, pre let on a 25 year lease to Thomson Holidays.
• Capital investment is expected to be returned after 3 years, as the development is completed. A return of the order of 80% level per annum is expected from year 8 to the end of the lease with Thomson (in 25 years’ time). This assumes 75% occupancy of the complex in the all year round resort, with level operating profit over the term. Then the asset may be sold or a new lease negotiated.
• Income to investors may be realised by repeated lump sums every 4-5 years via equity release
• Through this mechanism, an estimated 360% of initial investment lump sum can be paid out to investors every 4 -5 years (after the initial 3 year period)
• Alternatively there may be an option to take 5% annual dividends from year 4 onwards plus a large lump sum when the investment is sold
• If hotel profits increase or decrease over time then the return will change too
• The investors own the land and the 5* hotel, due to open December 2009. There is potential for long term gain in the property value on top of the estimated figures presented here.
• The hotel is leased long term to Thomson. This is the basis of the long term income
• A similar hotel was recently completed and is already running at 75% average occupancy rate

What is the expected return?

In summary: All of invested capital back in 3 years, followed by an estimated 80% per annum level return (paid as a lump sum every 4-5 years) over the remaining 22 years (at 75% occupancy rate)

Who can invest?

You can invest personally or from your pension fund. Individuals must be over 18 and categorised as Sophisticated Investors or High Net Worth Individuals. The minimum investment is £16,000

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This is a non-regulated business opportunity and as such is not monitored or authorised by the Financial Services Authority. Not all areas of property investment are regulated by the Financial Services Authority. The Financial Services Authority does not regulate tax advice