Why you should invest in a hotel room

Owning a hotel room represents one of the most unique forms of property acquisition and it just might be the best investment option in that segment. Not only does it confer the right to live like a “king” with clean bedsheets and fresh towels in an organized apartment on a daily basis but as an investment, investors could also make a living from it through rental returns.

In Nigeria, the idea of possessing a hotel room might sound strange and appear as though, only the stupendously rich can indulge in. However, reality shows that this high-yielding investment opportunity is something anyone looking to diversify income-streams can take advantage of.

Origin and opportunities in Nigeria

The trend began with rich Americans back in the post war era whey they started-off by purchasing rooms in their favorite European hotels just to secure them for holidays. But today, through its project Viceroy in Palm Jumeirah, the concept of owning a hotel room was introduced and same has become a viable investment for owners to earn immense revenue through the hotel room investment.

Grenadines Homes, a member of The Palton Morgan Holdings has come up with a unique concept that blends luxury with high returns on investment through The Oceanna – reputed to be the most iconic estate development in Nigeria.

Interestingly, while investors might take upwards of 17years to recover investments in buy-to-let properties, their counterparts who opt for hotel room investments, aside having the chance to live like kings through personal use of the rooms, can recover their investments in less than eight years. A case study is that of a N60m investment which would attract a yearly return of N4m from buy-to-let while the same piece of investment would attract a yearly net return of more than N9m in a hotel room investment.

Speaking on the concept hotel investment, Adeyinka Adesope, Group Managing Director, Palton Morgan Holdings, explains that it holds the potential for unimaginably high returns on investment and safety. “The Oceanna Hotel room investment offers a higher yield of 14 percent p.a. unlike the traditional buy–to– let which offers you a yield of 5-6 percent p.a. The yield on the Oceanna also allows you to have a shorter payback period between 7 -8 years, unlike the regular apartments’.

Investors now have the opportunity to buy into a high yielding industry at a fraction of the cost of owning an entire hotel. It is hassle free, particularly as it costs the investors nothing to manage. The hotel management runs the hotel and takes care of all the chores and tasks busy and discerning investors would not want to get involved in, such as occupancy, maintenance, advertising, marketing, bookings among others.

Exciting earnings/safety of investments

The hotel management earns a paltry percentage of the hotel room rental, while the bulk of earnings from lodgers go to the investors as profit. Comparing owning a hotel room to other forms of property investment, Adesope pointed out that “while the concept of hotel room investment is similar to a buy-to-let residential investment, returns on hotel room investment is much higher. “Unlike the traditional buy-to-let residential investment where you buy a property, rent it out and receive an income, with a hotel room investment, you buy the hotel room and effectively rent out to a stream of short-term tenants which earns a higher return rather than a single long term tenant,” he said.

He added that the key success to investing in hotel rooms is to invest in a hotel with a reputable global brand.

Why invest with The Oceanna?

The Oceanna is the first of its kind in the Nigerian market, seeking to domesticate global best practices and avail Nigerians the opportunity of safe and highly rewarding investment opportunity.

In the words of Kikelomo Williams, head, marketing services, Palton Morgan Holdings, the company desires to open up a plethora of opportunities and experiences to discerning investors with the project. While the concept is being offered by developers in many western cities such as London and New York, this is the first time investors in Nigeria would have opportunity to own a hotel room.

She is confident that the global appeal of the iconic development is not just in beauty, rather, the quality and expertise injected into it will excite anyone familiar with top-notch real estate development across the world. “Though the offer price for a studio unit is N78million but we are presently offering it at a pre-sale price of N57million which will be coming to a close by October 20, 2017; buying at the pre-sale price, investors will be saving N21m”, she stated.

“The Oceanna Hotel is carefully set out as a catalyst, enabling individuals to access the lucrative commercial property sector with opportunities and experiences for discerning investors who have their sights set on high returns and safety of investments. It guarantees a lifetime stream of income,” she further said.

Designed by HOK Architects, famous for their work on Dubai Marina, the Emirates Stadium (home of the Arsenal FC, London), and The Flames of Azerbaijan, The Oceanna is branded by Brash Brands, the creative agency that breathed life into the world’s tallest building, Burj Khalifa, Dubai and is being crafted by Cappa & D’Alberto.

Though management partners have not been chosen for The Oceanna Hotel, Kikelomo noted that the same care exercised in picking other partners would be applied in selecting one of the best hotel brands in the world to manage it.

The first phase of the project, covering 20,000 square metres of land took-off with design in the third quarter of 2015. It will be made up of four towers of mixed-use development, aiming to serve residential, commercial and recreational purposes for prospective buyers and investors.

Conceived and designed as a place to dignify everyone associated with it, The Oceanna project is located on the Water Corporation Drive, off Ligali Ayorinde Street, Victoria Island. The built-up area is about 40 percent, leaving ample surrounding for greenery and circulation, to suit the lifestyles of the accomplished and attract the discerning. All these reinforce the company’s optimism that when completed, the estate would deliver an alluring convergence of a residential and commercial complex, with world-class hospitality, educational and recreational facilities.

Grenadines Homes is a real estate development company dedicated to reinventing the concept of property investment in Nigeria. The company aims to create estates at the forefront of cutting-edge architecture, thereby building homes that represent luxury and high class which suit varying tastes and preferences. The company is currently developing several residential projects in Lagos and Abuja.