Queensland luxury hotel checking in property investors

PHOTO: Ramada Hervey Bay: A luxury hotel on Queensland’s Fraser Coast

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Anyone who has stayed in an impressive hotel has daydreamed about not having to leave.

But fewer people have taken the next step in imagining they could actually own a part of a hotel as an investment for as little as $5,000 plus have ‘stay benefits’ associated with that investment.

The founder of Ramada Hervey Bay a luxury hotel on Queensland’s Fraser Coast, a few hours’ drive north of Brisbane, is offering investors an unusual but enticing opportunity to be part of a hotel investment with an attractive return that includes accommodation benefits for investors.

For those looking for high returns and a broadened property portfolio, there are forecast returns of more than an average 8 per cent and paid quarterly over the six-year investment, along with a forecast 14.7 per cent return on investment (IRR) combining cash and conservative capital growth (as backed by independent research).

The structure allows for investment from as little as $5,000. The Property Collect Growth Trust is a registered Managed Investments Act scheme and investors subscribe to SkyHotel Investment Units in the Property Collect Growth Trust, who owns the SkyHotel Investment Fund. The SkyHotel Investment Fund will then build, own and lease to the operator, Ramada SkyHotel. They will share in the rent paid, the capital growth when it is sold in six years and the tax benefits in proportion to their investment. The trust units are transferrable and will also be listed on primary markets.

This seven-storey building, Ramada SkyHotel, will be crowned by a top floor bar, restaurant, and multi-purpose function and conference centre. SkyHotel will take advantage of magnificent uninterrupted ocean views over the marina and out to the renowned Fraser Island, including 360-degree vistas of the Hervey Bay area and hinterland.

The design focus has been specifically targeted at attracting a high occupancy and optimising room rates, and consequently sound investor returns.

Tim Wright, Founder of Property Collect and Ramada Hervey Bay, said that when he completed construction of Ramada Hervey Bay Stage One in 2009, he always wanted to finalise the big picture with Ramada Stage 2.

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After 10 years, all indications are that the dream is becoming reality, with the ground plus seven-level Ramada SkyHotel to be owned by the SkyHotel Investment Fund.

Tim said the vital piece to the puzzle was when he purchased a Ramada franchise from the Wyndham Hotel Group in 2007.

“Wyndham Hotel Group is one of the largest hotel groups in the world with massive market reach and a clear brand standard,” he said.

“There is no doubt having the might and power of Ramada and the Wyndham Hotel Group behind us has been a wonderful component to the success of Ramada Hervey Bay, making us the leading hotel on the Fraser Coast.

“The opportunity to now have Ramada SkyHotel is so exciting, where we will have an 83-room hotel that will allow us to become a real force on the Fraser Coast, which the team at Wyndham are fully backing.”

Proven formula

In detailing how room ownership could generate such assured and attractive returns, Mr Wright pointed to numerous key aspects.

With a total development cost of an expected $22.5 million and an independent valuation of $25.5 million there is an ‘in built’ value uplift to investors. With no development margin being levied, investors will acquire the asset at cost. This formula optimises both cash return and capital growth return on investment.

“We already owned the land with all services to the boundary, plus considerable infrastructure such as the stunning resort pool, which was put into place in 2009, making the cost of development of Ramada SkyHotel a clear winner for return on capital,” Mr Wright said.

Having operated Ramada Hervey Bay for more than 10 years, and a proven track record of high occupancy, Mr Wright said they know how the numbers stack up.

“The hotel has a great corporate following due to hotel rooms and a restaurant on site being operated by us, making us the only hotel in Hervey Bay with this formula.

“We have developed relationships with all the third party providers, booking.com, wotif, bus groups and airlines.

“The operating infrastructure is proven to launch Ramada SkyHotel,” he said.

Importantly, this registered investment fund is totally ASIC and Managed Investment Act compliant. An independent trustee with an independent responsible entity looks after the interests of investors.

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Popular destination

The Fraser Coast is renowned for pristine open spaces, low-rise, uncrowded accommodation, and world-class natural attractions.

Martin Simons, General Manager, Fraser Coast Tourism and Events, said the Fraser Coast is developing quickly as a tourism destination, proved by its sustained visitor growth since 2017.

“We are fortunate to be backed by an entrepreneurial council that understands the value of the tourism dollar.

We also have the support of the state’s peak tourism body in Tourism and Events Queensland and with the resources and the product, we are extremely confident of our future tourism track,” Mr Simons said.

To register for a webinar, the independent research and/or a Product Disclosure Statement, please go to www.skyhotel.com.au.