Rocksure - Press

A Share on the Shore

Tue, 06 Mar 2012 14:17:00 GMT

Financial Times - Jane Owen

Fractional ownership offers holiday homes without the hassle – once you work out the cost.

The concept of FO began about 30 years ago in the US and, today, high-end schemes provide serviced holiday homes without the usual hassle of multiple home ownership, such as maintenance, cleaning and guilt about not going there often enough. What makes this form of ownership especially attractive in the current climate is that it costs a fraction of the capital of buying a property outright.

Rocksure uses a slightly different model whereby properties are sold at the end of a set term. Different funds offer various options. “The Crystal Fund offers villas around the world and the Capital Fund offers city apartments,” says director Desmond Patrick-Smith. “The minimum investment is €57,500, which allows seven to 14 days’ use of the properties. An annual charge of €1,050 – plus a €200 visit fee – covers all costs, staffing and concierge services. The funds’ lives are seven to 10 years, after which the properties are sold and the proceeds returned to the investors.”

Rich Pickings

Tue, 06 Mar 2012 13:14:00 GMT

First Eleven - Anna Tyzack

Having a share in a portfolio of properties gives you the benefits of a seond home without the hassle of owning one.

Owning a beach house or a ski chalet is a beguiling prospect for most parents but often the commitment aspect is a turn-off . Many families can’t justify a 52-week obligation to a second home they will only use for a fraction of the year. Others are uncomfortable with the thought of being tied to one place. But these days, as former tennis player Tim Henman has discovered, it’s possible to own a holiday home on a more flexible basis.

Rocksure, works on the presumption that the average British second home buyer usually owns a holiday property for seven years. Buyers invest in a portfolio of 12 fully staffed homes in destinations such as Brazil, Colorado and the Algarve. They can spend up to four weeks a year in the properties in return for an annual service charge. After seven years, the properties are sold off and the assets paid out to the shareholders.

“Life works in seven-year cycles,” explains David Rogers, chairman of Rocksure. This way they get to enjoy homes in amazing destinations, in the knowledge that they will be able to use their money in other ways when the fund is liquidated. Rocksure’s third fund: the Crystal Fund, with homes in St Lucia, Corfu and Provence, opened earlier this year, with full units (four weeks, service charge £4,800) costing £238,000 and half units (two weeks, service charge £2,400) costing £119,000

Home from Home in Marrakech

Mon, 05 Dec 2011 09:38:00 GMT

The Luxury Channel - Lauren Felicity Steventon

As the seasons change in the UK, it is definitely time to start thinking about winter sun. Just three hours flight, a completely different culture and 300 days of blazing sunshine a year make Marrakech a great long weekend away from the winter.

There are riads and hotels throughout the city (see this issue’s Luxury Channel Marrakech Guide), however, instead of stepping out into the bustling and stressful streets of the city, I have managed to find an alternative that gives me a fully-staffed private country home minutes from the city. If i want a private tour, the driver will whisk me in to meet a guide. If i want to chill out, the pool and 2.5 acres of land are more than enough. And if I want to indluge… There are plenty of wonderfully home-cooked meals awaiting me. This is because I have managed to sneak in a rented week at El Boura, one of Rocksure’s luxury Marrakech villas.

I say ‘sneak in’, because more often than not the villas are in use by the owners. Rocksure have properties throughout the world, all operating under a shared-ownership scheme. Properties are separated into ‘Funds’ each of which has a set number of investors are allocated a number of weeks a year to spend in any of the properties in their fund – or in properties in different funds.

Founder Director David Rogers is quick to allay any suspicions that it sounds a bit timeshare. “Investors in a Rocksure fund OWN 100% of the real estate between them” he argues, “so they are making a genuine property investment for the purpose of making a capital gain.” Unlike a timeshare purchaser, who owns nothing except the right to use the property, Rocksure shareholders actually own a fraction of each home. Funds have a finite end: after a set period of time, the properties in a portfolio are sold (although directors have a two-year leeway if they deem it prudent to wait before putting properties on the market) and the investors given their share of the profit. What makes this seem more attractive than simply owning and selling your own property is that the investment (and risk) are spread across different properties in different countries – and different currencies.

The reason people like me are allowed in to rent the properties for the occasional week is that Rogers and his Co-Founder, Desmond Patrick-Smith, want to keep running costs down for their investors. I’m glad they do – this is a completely different way to experience Marrakech. I have stayed in Riads, in Grande Dames and in country houses, but I’ve never had my own Moroccan country house and it is ultimately more relaxing.

The location is perfect – five minutes drive from the Medina and the airport, in full view of the majestic Atlas mountains – and the villa has been beautifully designed in a traditional style. El Bourra has seven en suite bedrooms and can easily accommodate 12 adults and 4 children. The main house is built around a cool central courtyard with a retractable glass roof, which provides a respite for reading or relaxing out of the harsh midday sun. The massive bedrooms in this building are both contemporary and classic Morocco – beautiful tiling in the bathrooms, comfy, draped beds and mod cons such as wifi. There’s even a specially designed kid’s room. Additional bedrooms are situated in two long buildings stretching back from the main house. These aren’t as pretty, but they are spacious and comfortable. Outside, a large pool is surrounded by loungers and trees, with the odd little shady alcove hidden away and filled with pretty sofas and cushions. This is just the place to while away the afternoon hours when it’s too hot for shopping and too early for the delicious, freshly cooked dinners.

Staff are always on hand to bring a refreshing mint tea, prepare a snack or organise a massage and, unlike a hotel, they will serve whatever meals you want – whenever and wherever you want them. That could be a traditional Moroccan dinner in the dining room, an al fresco lunch by the pool or a cosy winter supper in front of the fire in the sitting room. Ask nicely and they might even teach you how to cook it… Already, housekeeper Abdell has given me tips on where to find the best shoes in the souk – invaluable insider insight, as anyone who has ever stepped foot in the Medina’s labyrinthine streets of stalls will know. The driver is on hand to nip us in as soon as the baking midday sun abates, but for now, I’m happy to sit back, sip a cool drink and dream about being one of the lucky investors who get to call El Boura home.

El Boura rents from £4,500 per week. For more information contact www.rocksure.com

Rocksure has three funds currently open for investors: the Capital Fund (which will eventually include 10 apartments in ten cities, of which Paris, Florence and Barcelona are completed), the Crystal Fund and the super luxe properties of the Quintessentially Platinum Fund, a joint venture with the high-end lifestyle and concierge company.

http://theluxurychannelmagazine.com/home-from-home-in-marrakech/

A holiday from ownership

Mon, 07 Nov 2011 09:48:00 GMT

Financial Times - Richard Holledge

A holiday home once meant a house in the Dordogne or a bougainvillea-fringed villa in Andalusia. You only had time to visit it a few weeks a year and the first days were spent phoning the pool man and buying new towels, but it was yours, all yours. How old-fashioned. These days any individual worth their high net is not content with just one property, but a score.

For those who want to enjoy many different properties without the hassle of full possession, one solution could be fractional ownership. Started in the US in the early 1990s by groups of friends who pooled resources to buy holiday homes, it has developed from simple part-ownership of a property in one location to an elaborate and increasingly upmarket share in hundreds of properties around the globe.

Put simply, investors buy into a fund that entitles them to limited use of a portfolio of properties – usually about four weeks per year – but, crucially, they have a share in the equity. It may not be romantic but it is functional, if somewhat corporate.

Founder David Rogers says: “Our properties, which are in the £1m to £1.5m bracket, have all been bought with cash. We don’t have mortgages so investors know their money is safe. Our first fund, the Alpha, opened in 2006 and closed in 2007 at the height of the good times. Then it cost £159,000 to join now it is valued at £202,000 – a 27 per cent increase.”

Rocksure has recently launched the Crystal Fund at £238,000 per investor and plans to sustain prices by buying in places such as Brazil, Portugal and Morocco, which are popular with a wide range of international buyers.

A house for all Seasons

Fri, 14 Oct 2011 13:24:00 GMT

Tatler - Claire Pilton

A minimum investment of £119,000 for a ‘half unit’ share entitles owners to an average of two weeks annual use per annum, with three-quarter and whole units offering three and four weeks for £178,500 and £238,000 respectively Shareholders, who can invest in extra quarter units or ‘stretch’ their entitlement by taking mid-season visits, are also able - via Rocksure lnterfund Programme - to use all the properties owned by its five funds, in destinations including Brazil, Thailand, Colorado, Croatia, Marrakech (pictured), Paris and New York. Annual services which are set at £2,400 per half unit for the first year, cover all utilities, maid service, a full-time housekeeper/cook, gardener and use of Rocksure’s comprehensive concierge service. At the end of the Crystal Fund’s seven-year life, the villas will be sold and all proceeds distributed to its shareholders.

A house for all seasons

Fri, 14 Oct 2011 13:23:00 GMT

House and Garden - Claire Pilton

If you hanker after a holiday home in the sunshine, but have reservations about returning to the same place every year; if you baulk at the burden of funding a second property which you may only use a few weeks each year then Rocksure Property’s Crystal Fund (01993 823809; www rocksure.com) could be the solution.

As the third ‘villa fund’ in Rocksure’s five-fund portfolio (which has attracted a total £16 million of investment to date, the Crystal Fund affords the opportunity for like-minded, high-net-worth individuals to own their share of six villas: each with four/five bedrooms and bathrooms, a home office, garden and swimming pool. Collectively they will offer year-round sunshine, with locations in St Lucia, Provence, Morocco, the Algarve, Corfu and Andalucía.

A minimum investment of £119,000 for a ‘half unit’ share entitles owners to an average of two weeks annual use per annum, with three-quarter and whole units offering three and four weeks for £178,500 and £238,000 respectively Shareholders, who can invest in extra quarter units or ‘stretch’ their entitlement by taking mid-season visits, are also able - via Rocksure lnterfund Programme - to use all the properties owned by its five funds, in destinations including Brazil, Thailand, Colorado, Croatia, Marrakech (pictured), Paris and New York. Annual services which are set at £2,400 per half unit for the first year, cover all utilities, maid service, a full-time housekeeper/cook, gardener and use of Rocksure’s comprehensive concierge service. At the end of the Crystal Fund’s seven-year life, the villas will be sold and all proceeds distributed to its shareholders.

A house for all seasons

Fri, 14 Oct 2011 13:21:00 GMT

Vogue - Claire Pilton

An Easy Way to Own a Villa, or Two

Mon, 06 Jun 2011 09:41:00 GMT

Wall Street Journal - Jemima Sissons

Fractional Ownership Gives Holidaymakers the Comforts of Home, Without the Maintenance Headache

For some, the joys of owning a vacation property are numerous: a home away from home, the comfort of knowing where the linens and teabags are kept, getting to know the local baker.

But high maintenance costs and the desire to try out different destinations each year are two reasons others are thinking twice. For those who want a vacation home without the headache of expensive upkeep, fractional ownership is becoming increasingly popular.

Likened to a more luxurious and upmarket version of timeshare, fractional ownership means you actually own the bricks and mortar, buying a share of a single property or, in some cases, a whole portfolio of properties, which you are then entitled to enjoy. This can range from sprawling estates in Tuscany, luxurious, fully staffed and equipped villas in Thailand or Morocco, or residences in city centers that serve as an alternative to hotels for oft-traveling businessmen.

For venture capitalist Antony Hamilton, who bought a £159,000 share in Rocksure's Alpha Fund, which gives him access to six properties a year, it was an easy decision. "I joined three years ago because I liked the concept of having someone else worrying about maintenance," he says. "It is an opportunity to go back to different places, and it is favorable to get a company that is much better at negotiating prices than I would ever be to buy the property."

Most vacation-home plans work by raising capital from investors in order to buy houses for the fund. Each fund has a finite number of shareholders needed and, once the target is reached, the fund is closed. For example, Rocksure has two funds—Alpha and Bravo—that are already closed and three that remain open, with prices ranging from €57,500 for a half unit in the Capital Fund to £460,000 for a full unit in the Quintessentially Rocksure Platinum Fund. There are 170 units in the Capital Fund, 45 in the Crystal Fund and 37 in the Quintessentially Rocksure Platinum Fund. There is also a chance for inter-fund usage.

In some plans, such as Rocksure, each fund has a predetermined life and the properties will be sold off from between seven and 10 years, and the proceeds repatriated among investors. Others, such as the Hideaways Club, have no lifespan, and, as director Michael Balfour says, "it is something to be passed on to the next generation." Members have access to all the properties within the portfolio for varying weeks a year (generally four to eight), and some have no limit, so long as there is availability. If investors want to exit the plan, there are various strategies, which may include a "one-in-one-out" arrangement. The first properties are either bought with funds raised by the founders or from the money invested by shareholders buying into the plans.

Most of these high-end fractional-ownership properties come with all the services one would expect of a five-star hotel—often fully staffed, with a cleaner, cook and concierge services. "We didn't have to lift a finger," Mr. Hamilton says of his last trip, when he had six friends to stay in the five-bedroom Villa Arawan in Phuket, Thailand, complete with polished teak floors, Jacuzzi and infinity pool overlooking the Andaman Sea. "There was an exceptional chef. The food—freshly prepared from market ingredients every day—was out of this world."

Club Class

Mon, 06 Jun 2011 09:44:00 GMT

A Place in the Sun - Richard Way

Until recently residence clubs focused on the shared ownership of villas in desirable holiday spots around the world. But, as we reveal here, the concept has now been applied to city pads and adapted for smaller scale projects.

Top-notch restaurants, exciting nightlife, limitless shopping and bucketfuls of culture - it’s easy to see why us Brits have developed a passion for the weekend city break.

For the dedicated long-weekender, part of the fun of three Full-on days experiencing everything a city can throw at you is being able to try out different places. And why not: New York and Vienna are especially fun at Christmas, Paris is pretty in spring, try Florence in autumn, while almost every city is a buzzing tourist hub in summer.

As a city-loving property investor, it’s this need for variety that in the past may have put you off owning a property in one destination. But if you’re nodding In agreement there could be a solution - invest in a private residence club, or fund.

So far this year two opportunities to become a part-owner of a fund that invests solely in fully serviced boutique apartments in a selection of the worlds most exciting cities have been launched. Anyone who invests in one gets usage rights to all the properties belonging to that fund, as well as access to a five-star concierge service. It’s fair to say, these funds marry two otherwise incompatible concepts - weekend breaks in different cities with property ownership.

Options for buying into Rocksure Property’s Capital Fund start at €57,500 (£50K) for a half unit, which brings an average of seven rights’ annual usage, while a full unit costs €115,000 (£100K) and includes 14 nights annually. The Capital Fund bought its first Property in January - a 178-square metre two bedroom apartment in Paris, 100 metres off the Champs-Elysees on the Rue de Ponthieu Since then it has added apartments in Barcelona and Venice.

In addition to its Capital Fund, this year Rocksure Property has launched two further funds, each investing in five luxury villas around the world with one in Partnership with Concierge specialist Quintessentially.

Unlike the Hideaways Club, Rocksure Property allocates a lifespan to each of its funds ranging from seven to ten years. When the life of a fund ends all properties owned by it are sold and any profits are distributed amongst the shareholders

Why go? For anyone looking for a taste of decadent Parisian high life...

Thu, 07 Apr 2011 08:54:00 GMT

Red Online - Hannah Rouch

Why go? For anyone looking for a taste of decadent Parisian high life...

Located off the buzzing Champs-Elysees is the stunning Rocksure Apartment. Part of the Rocksure Collection, it's a grand two-bedroom, two-bathroom apartment, and more than fulfils any latent fantasies you’ve ever had of living in a swish Parisian crashpad – for a few days at least.

The apartment is decorated to the highest standard – the finishing touches of Richard Avedon prints and an array of fresh flowers throughout the flat add a real five-star touch – with the high ceilings making the space feel positively cavernous.

The large kitchen comes well-stocked with everything you could need for full-scale entertaining should you choose to dine in or even have friends round. And, if after a hard day’s shopping or sightseeing you just can’t face heading out again, you can always just light the candles, pick from a vast DVD library and curl up in the cosy TV room.

The flat is equipped with city guides, and a tailor-made guide of recommended restaurants, bars and sights in the area, while the location couldn't be better for getting around the city (if you can bear to tear yourself away from the apartment that is).

But what really makes your stay is the warm welcome from JJ the concierge who will be there to greet you on arrival. Having stocked up the fridge – including some fabulous wine – lit the candles and advised you on where to eat, shop and visit, he’s on hand to ensure your every need is catered for.

Highs:

- The stunning decor and quality of finishing throughout

- The location

- Having your own concierge

Lows:

- The fact that you can't move in permanently?

Facilities & Important Info at Rocksure Apartment
Number of rooms: Two bedrooms, two bathrooms, plus kitchen, living room-cum-dining room and study-cum-TV room

Check-in/check-out times: 3pm and 10am (although this is flexible)

Room service: No

Swimming pool: No

Spa: No

Child-friendly: Yes. But it's probably more suitable for couples due to the cream decor (not very stain-friendly)

Dogs welcome: No

Location: The Rocksure Apartment is ideally located in the very centre of Paris, just a couple of steps from the Champs-Elysee and the Arc de Triomphe. It’s also just a 10-minute walk to the Tuilleries garden and the Louvre.

City Centres work

Thu, 10 Mar 2011 12:03:00 GMT

Overseas Property Professional – George Sell

One of the most noticeable trends in the fractional sector is the proliferation of urban fractionals, as developers and buyers see the logic of shared ownership in the heart of the city centre. What is the attraction and how are they making it work?

Most developers considering the fractional ownership sector are generally looking into resort accommodation, whether it be a small stand-alone scheme or, increasingly, part of a mixed-use development which may also include whole ownership and hotel elements.

But a buzz is beginning to grow around the burgeoning urban fractional sector, with developments appearing in major cities around the world.

Paris, in particular, seems to be undergoing something of a mini-boom in fractional ownership, with a growing number of US property professionals developing, refurbishing and selling fractional properties to their countrymen.

Why is this urban trend emerging?

Firstly, urban fractionals can be considered “dual purpose” properties. Whereas resort-based accommodation is used solely for holiday use, properties in major cities which offer “space available” nights as well as allocated days/weeks are also in demand from the business community as pied-a-terres.

A businessman staying in New York or London can combine meetings with a weekend break, and bring various members of the family to enjoy all the activities a city has to offer.

Secondly, the general logic behind buying a fraction – that you can get access to a more expensive property for less money – applies to an even greater extent to premium city centre apartments which will generally have some of the highest prices per square metre of any property.

Thirdly, and perhaps most importantly, urban fractionals override one of the main consumer objections to the shared ownership concept – seasonal demand.

An urban fractional doesn’t have this problem – the likes of London, Paris and Barcelona are year-round attractions, which makes successfully devising a usage plan that keeps everybody happy a much easier proposition. From a developer’s point of view, an urban fractional is simpler in terms of build and a vast range of on-site amenities is not necessary, as the property has all that the city has to offer on its doorstep. Rather than grand houses or villas, they tend to be spacious but not extravagantly large apartments.

Kitchens are generally provided but are not a central feature, as most buyers take the opportunity to eat out regularly when in residence. It is the service by which you offer access to all the surrounding cosmopolitan delights which is key.

One obvious benefit of buying in major cities is that they are often safer property investments than outlying regions. Prime central London property, for example, has not felt the cold wind of recession that has chilled the regions, and has seen steady regular price increases year on year.

Rocksure says of its Capital Fund: “Such is the kudos of these locations that it is hard for individual investors to buy, let alone afford, property in the prime locations. Investors in the Capital Fund can rely on Rocksure’s experience, leverage and collective fund budget to access not one but ten sophisticated hideaways across Europe negating the need to make the agonizing choice of where to invest and alleviating the risk associated with one-off purchases.”

In keeping with fractional property ownership in general, the buyers of urban fractionals are not looking for a cut-price deal, but a more logical way to send their money. In many cases, they could probably afford the whole ownership equivalent but they see the logic of sharing the costs of an asset that is used infrequently. They also appreciate the convenience of having maintenance and management taken care of, as well as a concierge to organise their dining and leisure while they are at the properties.

Parisian chic on the cheap

Mon, 06 Jun 2011 09:45:00 GMT

Sunday Express - Jane Slade

Paris is still the lifestyle capital of Europe but, as Jane Slade finds, you can own a multi-million pound home there for just a fraction of the true cost.

Fast, quick, dynamic are how agents describe the Paris property scene. Defying all expectation and downwards trends, the French capital shines like a beacon luring buyers seeking a slice of haute culture as well as a solid investment.

As Mark Harvey of Knight Frank’s international division reveals “there are some wonderful refurbished apartment for sale in Paris but most get snapped up quickly as there is so little available. Expect to pay around £25,500 (€30,000) per sq m for a home on the fashionable left bank. Knight Frank is marketing 15 apartments in a redevelopment on the Avenue Foch starting from £2.2 million for a two-bed property measuring 150 sq m rising to a £8.5 million for four-bed homes measuring 350-400 sq m. Marks adds. “Most Brits buy because of the culture. London is more for investment but Paris is the lifestyle capital; a bit of fun and frivolity”.

Malcolm and Moira Jones have just come back from a weekend in their £1.5 million two-bed apartment in Paris. They didn’t pay anything like that though. Rocksure’s Capital Fund which gives them a share of 10 multi-million pound properties in Europe’s most prestigious cities and capitals for £115,000. This entitles them to an average of14 nights’ stay a year.

The couple who live near Chester in a five-bed home in 85 acres, have never been tempted to own a home overseas. “I don’t like feeling you always have to return to the same place”, says Malcolm, 57, who is chairman of his own manufacturing company.

He has also invested in Rocksure’s Alpha Fund as a way of getting exposure to the world property market while also being able to use the properties”, he says.

Malcolm enjoys visiting a golfing resort in the Algarve and making midweek getaways in Marrakesh. “It is so much nicer that staying in hotels. We had a lovely weekend in the luxury apartment in Paris with friends. We arrived to find the concierge had even lit candles in the sitting room”.

The apartment is just off Champs-Elysees and has lantern light hanging from the ceiling, big sofas piled high with cushions, solid oak floors and original stained-glass windows.

It is the first in the fund to be unveiled; others are planned in London, Venice, Florence and Barcelona.

The number of investors, who also pay £1800 a year charges plus £170 a visit, will be capped at 170. The idea is that after 10 years the fund is sold and profits shared.

Director David Rogers says: “The Capital Fund was created for individuals but is also suitable for private companies who want to entertain potential clients or thank existing ones in a discreet and private manner, as opposed to offering a rowdy day at Twickenham”.

City Insider

Fri, 04 Mar 2011 17:37:00 GMT

David Stevenson

The art of reinvention is one of the most precious skills in modern business.

Arguably reinvention is also constantly in demand within the core of the travel industry itself – redefining and reinventing the package holiday is essential to the survival of the sector with the all inclusive family resort complete with extra sports facilities the latest and best example.

But travel industry execs might want to look to allied sectors for inspiration and new ideas, with the timeshare sector offering some especially insightful examples. Obviously the reinvention needs to start with a name change followed closely by a business model restructure.

For really big operators like Marriott timeshare as a term is a thing of the past and fractional ownership is the new ‘new’ thing. But it’s obviously more than just a name change – the business structure has also been changing fast. New operators like Rocksure and the Hideaways Club for instance have been pioneering a particularly innovative model here in the UK, incorporating a range of properties within what is in effect a syndicate of property owners, structured around a club of some form.

The key distinction is that actual ownership of the properties rests with the fractional investor’s who collectively own the property which is in turn managed by the likes of Rocksure and Hideaways.

Obviously these managers aren’t charitable institutions and make their money by capturing some of the upside in the value of the properties, as well as making administration charges plus a cut of the rental income from selling on spare weeks.

But the key idea is indisputably innovative and obviously fairly alluring given the spate of recent product launches - pool your money with other wealthier investor’s and then buy a globally diversified range of properties, and aim to benefit from an increase in the value of these ‘special’ properties as well as enjoying more than a few holiday’s over the coming years.

In effect your holiday becomes something of a lifestyle investment for the future, where the ultimate payback comes when you sell the property portfolio.

Obviously there’s a mountain of detail and clauses that make these anything but conventional investments, including the obvious annual maintenance/administration charge (frequently in the thousands of pounds).

But the key point is that these syndicated models are proving hugely attractive. Rocksure, for instance, recently launched not one but two new funds, one in partnership with the Quintessentially Group. And Hideaways has also been very active recently.

It’s just followed in the wake of Rocksure by launching a property collection aimed at city apartments. The Hideaways model is called the Club City Collection and will begin with 10 apartments including New York, London, Paris, Venice, Miami and Istanbul – the ultimate target is 120 city properties over the next three years.

Clearly these lifestyle investments aren’t going to appeal to anything but exceedingly wealthy folk who can afford a spare few hundred thousand pounds. But the fractional ownership model has a range of mass market applications – as is obvious from the success of outfits like Holiday Property Bond where the standard entry price is more likely to be between £10 and £30,000.

The advent of these city apartment collections also raises another interesting idea – investor’s clearly like the idea of visiting major cities and then staying at centrally located apartments with all the mod cons plus good house service and concierge add-ons.

That may all sound a bit like the description you’d apply to a nice hotel but clearly some travellers like to stay in something that feels rather more personal, with more room and where they don’t need access to extortionately overpriced in-house restaurants.
Again, if I was in the luxury travel sector I’d be taking note – luxurious serviced villas may be the big new thing but it’s clear the future is in serviced uber-luxuruious city centre apartments.

But I’d suggest the biggest lesson is one about ownership and cost. As the cost of a good holiday accommodation continues to escalate, many affluent families will prefer not to see a large chunk of their money vanish into the hotel owners back pocket.

They’ll be attracted to the idea of upmarket timeshare, with lots of genuine choice and good customer service - even more so when it isn’t called timeshare but fractional ownership.

Fractional property market report

Thu, 06 Oct 2011 17:10:00 GMT

Wall Street Journal - Jemima Sissons
Fractional ownership is one of the new buzz-words in property. It is – at least for some developers – one of the few growth areas in the property market right now. It’s also a concept that struggles against confusion with timeshare. David Rogers, director of Rocksure Property, says, “I have some issues when I’m marketing our funds, because the market here was so scarred by the timeshare scandal, even though that was now 30 years ago – timeshares were so aggressively sold and there was so much marketing cost in the price.”

Piers Brown, founder of FractionalLife. com, points out that timeshare did, in the end, clean up its act, and, “there are a lot of timeshare owners who are very happy with their timeshares.” But he also explains that fractional ownership is a very different matter. “While with timeshares all you buy is a slice of time, with fractions you have a deeded interest in the property, or sometimes a share certificate if you’re buying into a fund.”

At its simplest, fractional ownership splits the interests in a property. “You are an owner, you have a title deed just like owning a whole property,” says David Burden, CEO of Timbers Resorts. Other models give shares in a fund, such as Rocksure’s and the fund holds the properties directly. Rocksure is rewarded for its stewardship by a 17.5 per cent share of any capital gains made at the end of the fund’s life – the same sort of success fee that hedge funds charge.

So it is a simple concept – but one that still isn’t well known in the UK. David Burden says that while it’s not understood well here, “In the US it’s been around for a dozen years or so and people are much more familiar with it.”

Most developers offer between one quarter and one twelfth fractions. Piers Brown says, “I’ve seen one week fractions, which to me is very close to timeshare – however the standard is twelve fractions, that’s four weeks.”

The appeal of fractional is very simple. In most overseas property markets, particularly the most mature ones such as France and Spain, overseas property is now highly priced - it is no longer the steal for UK buyers that it was ten or twenty years ago (particularly not with the weak pound). Credit tightening has further priced some overseas property out of the reach of the averagely wealthy. Piers Brown says “What fractional does is lower the price point and the level of entry for people.”

But fractional property is generally not addressing the bottom end of the market. For instance at Castello di Casole, some of the restored Italian farmhouses are priced at €4-5m or more. David Burden says that, “We find a broader audience by opening up to fractional ownership for €5–600,000.” The properties also include services such as cook, housekeeper, and concierge; “high end, but not ultra-ritzy,” Burden says.

Fractional properties are now available in many property markets. Timbers has resorts in Colorado, Mexico and the Caribbean, appealing to the US market, as well as Castello di Casole in Tuscany; Yoo’s Phuket development offers fractions from €45,800; and Rocksure is currently launching a fund with ten properties in Europe, focused mainly on the city break market, with an entry price of €115,000 giving 14 nights a year.

There are even fractional properties offered in the UK now; Kingfisher Apartments at Lyng in Norfolk, on a fishable stretch of the Wensum, offers 25 per cent fractions, and Barrasford & Bird is now offering fractional ownership at its Tregrenna barns development in Cornwall, from £39,000 to £86,000.

It seems to be the mid market that is doing best. Though some fractions are ‘bargain basement’ with Panama flats from €25,000, the average fraction in Europe appears to be around the €100,000 to €200,000 level. Most of the properties offered are on resorts, though some city centre properties in destinations such as Paris are also being offered on a fractional basis; the market is definitely being driven by developers.

Piers Brown says, “A lot of developers are looking at fractional at the moment.” He points out that services and inventory all have to paid for at a resort, so fractional can help to defray expenses. It’s not surprising that developers see fractional as a useful addition to their sales armoury.

Les Milton of the Fractional Ownership Consultancy points out another advantage of fractional ownership for the developer. “Most importantly, fractional ownership creates a year-round resort population,” he says. “Resorts that have no ‘buzz’ don’t last.”

Most developers have adopted a ‘mix and match’ policy, with both fractional and whole ownership being offered on the same resorts. David Burden says that Timbers Resorts has a Residential Club or Fractional Ownership component on almost every one of its nine developments. “It’s another way of selling. We’re very careful that we don’t just have one single residential offering at any of our resorts.”

So who is buying fractional property? The answer to that question depends to some extent on who you ask. David Rogers says Rocksure’s purchasers are generally in their early fifties, often partners in professional firms. “They’ve got a nice UK house, a good income, they’re still in work but they also want to have some fun. They pay cash, we pay cash – there’s no gearing in the Rocksure fund. Our target is wealthy, but not super wealthy.”

Les Milton, on the other hand, divides fractional buyers into three main types. Mature couples, looking for a family holiday property within 3-4 hours flight time, younger people using fractional as a way of getting started in overseas property. And then the pure investors, who want a trouble-free investment and perhaps the chance to diversify their property portfolio by holding fractions in different countries rather than buying a single property.

David Rogers says that diversification is often a motive for fractional purchase, particularly with Rocksure which offers a fund, rather than a single-property investment. “They’re attracted by the idea of overseas property assets, but they don’t know enough about it and are worried about the time involved and the need to select wisely. The spread of destinations, gives them a spread of risk. They like the fact that there’s a planned exit.”

But there’s also a lifestyle motivation. Piers Brown says, “Another key driver for fractional becoming more popular is that people’s time is more constrained and more valuable.” Purchasers don’t want the responsibility of maintaining property – they want a trouble-free investment that is managed for them, and that is what developers are increasingly offering.

It’s interesting that David Rogers comes from a travel background, not from the property sector. He is clear that what Rocksure is offering is a lifestyle choice. “Instead of taking £800,000 to buy a hous in Provence all for yourself, have the hassl of looking after it and the knowledge that you have an underutilised assets, you can spend £189,000 and buy a share in six properties around the world, and in different climate zones, so you can use them at different times of year.”

So far, most developers are marketing their fractional properties direct. David Burden says, “For the most part it’s direct, though we market to intermediaries too and look for referrals from them.” David Rogers says “We haven’t yet got to grips with how agents should be working with Rocksure.”

Piers Brown believes most agents will struggle to make money out of fractional property. For a start, he says, it’s a completely different sales process from whole ownership; he also points out that there is less commission on a fractional sale. “You might make commission on a £44,000 fractional sale but on £250,000 for a whole house sale – and sales people are usually greedy, and they go where the money is.”

That hasn’t stopped Morgan Forbes from bringing estate agents into its marketing mix for the sale of fractionals on its Madeira development, Ponta do Pargo. According to John Ward, marketing manager at Morgan Forbes, the company wants to increase its third party list in the near future. “Agreements are still to be finalised, however at this stage we offer an eight per cent commission,” he says.

While commission from fractional sales is lower, he says that repeat business is often easier to get than with whole property sales. And he states, “We can also upsell from a fractional product to a 100 per cent ownership.”

Fractional investment still has a number of regulatory hurdles to jump – as well as the ‘timeshare’ problem with its image. A trade association has recently been founded, the Fractions and Shared Ownership Trade Association (www.fsota.org), which should help address many of these problems. But fractional ownership is affected by the EU Timeshare Directive – vendors must offer a 14 day cooling off period, and cannot sell fractions as an investment.

In fact Piers Brown is very wary of selling fractional as an investment. “In my mind, fractional is a combination of lifestyle and property purchase; access to a luxury property at a fraction of the price. If you’re looking for investment, there are better investments out there than fractionals.”

On the other hand fractional investment can free a purchaser’s money up to work harder in other asset classes – if property turns out not to be the best performer over the next few years.

Brown is also worried that some fractions give the buyer a poor deal. While most fractions sell at a 20-30 per cent premium to the price of the same property wholly owned, he has seen some developers trying to achieve a 200-300 per cent uplift. “That’s outrageous, it’s people just jumping on the bandwagon,” he says. “Transparency and prudence are two words we’re going to be hearing a lot about over the next few years,” he predicts, and while that could help the fractional industry – by making purchasers concentrate on getting value out of their investment – it could also damage it, if disreputable dealers try to get in on the act.

Another issue with fractional is lack of finance; unsecured lending is available to purchase fractions, but mortgages are not. David Burden comments that, “In Italy you can’t have a mortgage on a fraction; in the US you can.” However, lawyers are now conversant with fractional – they’re no longer a bottleneck for purchasers.

And there is, as yet, no real resale market for fractions in Europe – that’s still a big issue facing the industry. However, Fine & Country has just announced plans to sell fractional alongside normal property sales – and the involvement of mainstream agents should help create a resale market.

Resale is one area where the funds, like Rocksure, have an advantage as they sell up the properties after seven or 10 years, and distribute the funds to the shareholders.

There is now widespread consumer interest. Piers Brown says, “From the consumer perspective our web traffic has more than doubled to 1.3m hits,” and the Fractional Expo grew from 100 delegates to 210 last year and is expected to see further growth this year.

Les Milton points out that fractional isn’t just a temporary quick fix for developers stymied by the credit crunch – it’s already demonstrated staying power. “Over the last five years, that is, before we entered the global recession, fractional ownership has been the fastest growing sector of the US property market,” he says. “Growth has been five-fold over the last 5 years.” That’s made it a USD 1.6bn market.

And David Rogers believes fractional has much, much further to go. “Right now, the prevailing model is that you sell a whole house to someone who’s got the money to buy it outright. That’s the old way,” he says. “Your grandchildren will think that’s a damned stupid thing, something their grandparents used to do! Fractional ownership is the future of overseas property for the British market.”

Interview with Quintessentially – Selling Class

Mon, 28 Feb 2011 11:00:00 GMT

Estates Gazette 29 Jan 2011

THE CLUB THAT CAN ARRANGE PARTIES IN THE PYRAMIDS AND BUILD A BAT CAVE

Launched in Soho in December 2009 by Simpson Elliot and Paul Drummond, Quintessentially began life as a luxury Concierge service available to its members 24 hours a day, 365 days a year and on hand to assist with any lifestyle requests; from last-minute restaurant reservations and holiday bookings, to theatre and opera tickets and access to clubs, parties and special events. Today Quintessentially has expanded into 59 cities around the world in destinations as diverse and far-flung as Maputo, Istanbul, Accra, Shanghai, Seoul and Baku.

Members are kept up to date through weekly newsletters, offering advice on the art and cultural events of the moment, invitations to charity evenings, balls film premieres and parties. Quintessentially has closed the Sydney Harbour Bridge for a private climb and unique marriage proposal, arranged a party for 300 at the Pyramids in Egypt, a romantic meal for two on an iceberg, and even created a Batman-style bat cave in a member’s home for an avid film fan.

The company has also recently turned its hand to property fund management. Last November it launched the Quintessentially Rocksure Platinum Fund with overseas property specialist Rocksure, which offers high-net-worth individuals the opportunity to invest in five luxury properties around the world. The eight-year fund will eventually own property worth $20m (£12.7m) located in Barbados, the South of France, the Algarve, Marrakech and Mallorca. Quintessentially says it is around “one-third of the way” through meeting its target.