Blue Coral Resort - Mactan Island, Philippines
Property Details
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Description
THE PHILIPINNES
The Pearl of the Oriental Seas, The Philippines lies 750 miles off mainland Asia and consists of 7107 islands, of which only about 2000 are inhabited. To the east is the Philippine Sea and Pacific Ocean, to the west is the South China Sea, and the south is washed by the Celebes Sea
MACTAN ISLAND
Mactan Island is located in the Bohol Strait off the eastern shore of the island of Cebu. Rectangular in shape, the low-lying coral island has extensive mangrove forests and offers some of Asians best diving, incredibly lush golf-courses, modern shopping centers, fine-dining restaurants, lively entertainment centers; including a casino, some of the finest powder-white beaches, and the renowned, exquisite charm and hospitality of the Cebuano people.
THE RESORT
BLUE CORAL RESORT & SPA is situated in the heart of Mactan Island’s eastern coast overlooking the Turquoise waters of the Bohol Straits. The resort will offer a tranquil retreat in a tropical paradise
Blue Coral Resort & Spa offers investors a selection of fully furnished five star properties ranging from 48m2 studios to 150m2 three bedroom pool villas. The properties are to be managed as a resort hotel offering investors high rental yields, backed by a major tour operator and a 5 year renewable guarantee.
FACILITIES
• Wellness Spa
• Gymnasium
• Casino
• 26 Spa Treatment rooms
• Conference Hall
• Restaurant Bar
• Swimming pool
• Childrens play area
• Shopping area
THE PROPERTIES
• 96 One bed Studios
• 24 Two bed condos
• 10 Two bed pool villas
• 10 Three bed pool villas
WHY INVEST IN BLUE CORAL RESORT & SPA
• High Rental Returns
• Strong Economic Growth
• Guaranteed returns
• 60% finance available
• High tourist growth figures
THE RETURNS
Example investment - Studio
Purchase price £59,000.00
Deposit £23,600.00
Rentals
292 nights @ $100 $29,200.00
Annual Management fee (25%) $7,300.00
Annual service charge (25%) $608.33
Net annual Income $21,900.00
GBP @ 1.84 £11,499.22
As a percentage 19.49%
Based on $100 per night and 80% occupancy
Blue Coral Questions and answers
Q) Are the guaranteed rentals returns simply added to the initial purchase price making them over-inflated compared to local market prices?
A) It is true that some developments add the rental guarantee to the price of the unit; however this would not work on Blue Coral as the 2nd floor studios, for example, are guaranteed a 97% return over the five years. This would not therefore be financially viable for the developers as they would only be making a £1770 profit for a fully furnished 5 star property.
Q) Who is going to manage the property in order for it to obtain the guaranteed rental returns and how do they expect to achieve such figures?
A) Continent Hotels and Resorts will be providing the day to day management of the property and the resort. They successfully manage over 60 hotels around the globe under a number of different brands. The high returns are based on room rates and occupancy levels in the area. These details have been confirmed by the department of tourism with a standard 4-5 star hotel room on this coast starting from $160 per night and occupancy levels of 72%. At Blue Coral the tour operator is able to guarantee a higher level 80% occupancy during the five year period.
Q) Are studio apartments a good option for this type of investment?
A) The reason a Studio is a good option is that it still offers good returns but with a low price and therefore lower initial investment.
Q) What has the developer constructed before?
A)
• Two Seasons Hotel, Boracay
• Boracay Beach Condo Hotel
• Asiana Village, Boracay
• Boracay Convention Center
• Kauswagan Village, Iloilo
• Iloilo City Terminal Market, Iloilo
• Coron Hotel, Palawan
• Troels Carstensen Residence, Iloilo
Q) Are there any price comparisons available for Blue Coral?
A) Palace Waterpark Resort which is along the coast, is a good comparison, the cost per/m2 on this project is £1,625 with a 3 year 8% return and no finance. Blue Coral Resort offers investors a cost per/m2 from £1,133 and a minimum return of 13.4% net for 5 years, with 60% non-status finance available.
Q) If the $ (US) were too see a significant fall in value and the rental yield is paid in this currency how will I be affected?
A) Resorts located in Mactan achieve $180 per night for studio apartments so even if Blue Coral achieves 60% occupancy your yield is achieved. If we look at a worst case scenario and the US$ drops to a rate of $3 to the Pound Sterling, the studios for example would still offer an 11.7% yield.
Q) What about capital growth?
A) It is always best to be conservative with estimates for capital growth on this type of product, especially within the current market conditions in the US and UK. However as the units at Blue Coral are so much cheaper than comparable properties in the area and the Philippines is attracting large scale international investment then a growth of at least 5% per annum for the next 2 years could be given as a ‘base’ figure
Q) Why are these units so much cheaper than comparables in the area?
A) The developer is happy with the margin the project offers for him and Blue Coral has been priced to sell, in fact even in the current market place over 25% has been sold in the first 6 weeks since release. It would be possible to increase the prices by 25% and still offer a yield of 15% on the entry level studios; however it is always important for developers to price correctly in order that both he and the buyers achieve good returns in the longer term.
Prices from as little as £59,000 for freehold property in this 5 star resort with a guaranteed rental income of 19.49% renewed every 5 years