Fractional Ownership News
Want A Fractional Hideaway?
That's the question posed by the recently launched Hideaways Club, the first Private Residence Club in Europe.
Fractional Life was on hand to attend the launch event on Monday 29 January at the Mandarin Oriental Hotel, Knightsbridge, London. There, the founders promoted the concept in a room packed with travel and lifestyle journalists.
Mike Balfour, and Stephen Wise presented the concept and talked through the Club's ambition to acquire 12 villas across Europe and expand into a portfolio of around 100 properties at an average £1m apiece. The obvious attraction being that the scheme avoids the management/maintenance worries which bother many second home owners.
The scheme is backed by leading City businessmen: its chairman is Mike Balfour, also chairman and founder of Fitness First, and another founding investor is John Lovering, chairman of both Debenhams and Somerfield. The executive team includes Patrick Henchoz, founder of fitness chain Esporta.
Investec Bank has invested £12m towards launch costs - and reports suggest Hideaways might eventually float on the Stock Market to give investors a decent financial return, plus luxury holidays in properties which will usually include plasma screens, at least four bedrooms, over 2,500 sq ft of living space and private pool.
"The first 12 properties to be acquired will have an average value of over £1 million and all will be within four hours flying time of the UK to cater specifically for the UK market. Destinations are planned to include the South of France, Cyprus, Croatia, Tuscany, Spain, Portugal, Majorca, the French Alps and Morocco. Already in solicitors' hands are a 5,400 sq ft mansion in Majorca, a restored farmhouse in Tuscany and a luxury villa in Morocco" said Stephen Wise.
When fully subscribed, the Gibraltar-registered Hideaways Club will work on a property to member ratio of 1:6 based on 100 properties and 600 investors. Membership costs £207,500, plus an annual fee of around £10,000 to cover running and maintenance costs and importantly, the Club's members will own a share in the Club' property portfolio and so benefit from the potential upside and limit risk in the event of a downturn in the market.
A share in the Hideaways Club is likely to be much more liquid than ownership of a house abroad; transaction costs are considerably reduced and the hassles involved in buying, selling and upkeep are eliminated.
By capping membership at 600, members - who must stay invested for at least three years - should get at least four peak season weeks in various properties, their length of stay decided by a points system. The Club management reckons most properties will be in use for 20-24 weeks a year.
Fractional Life says:
The Hideaways Club is a bold and innovative step in a new marketplace. The launch is particularly well timed to attract City bonuses and those cash-rich and time poor executives that want luxury holidays with the family without the hassles. The British and European target market will like the property investment angle particularly when backed by such a robust management team.
However, there's still a lot of ground to cover in terms of educating and reassuring the UK consumer about the benefits of fractional ownership and private residence clubs. The Hideaways Club is such a high profile newcomer, they might just start to pull it off.
