A NEW real-estate business concept has been introduced in the domestic property market aimed at changing the norm of leasing in the Philippines.
Capitarise Holdings Inc. (CHI) has partnered with FPD Asia for Versailles Stay, a rental property management solution the company said “defies the conventional way of leasing while providing the benefits of a hospitality entity.”
This rental business model offers temporary lodgings and amenities to guests while, at the same time, offering dependable care for unit owners and developers, according to CHI Chairman Abigail T. Sumida.
“We do not run it as a hotel. We just lease it out—short term [or] long term. We simulate a hotel, but we’re not a hotel.”
According to Sumida, the key differentiator of Versailles Stay from a typical hotel “lies in its unique business model, wherein we provide value-for-money and convenient accommodation facility to customers as it operates and manages the investment of both the developer and unit owners.”
Starting with just 10 units in August last year, this pioneering rental solution has since expanded with 50 units—mostly foreign-owned—for lease.
According to FPD Asia President Joel C. Perez, these are being operated as daily or short-term rents.
“Our average take-up right now is 40 percent to 50 percent for the 50 [for lease units],” Perez said, attributing such a fete to their “affordable luxury” rates. He said the rates are a third of what serviced residences charge customers.
The remaining 150 out of the total 200 units we manage at present are being leased out on a regular basis for one year to two years, Perez said.
“Our target number of inventory is a hundred, maybe by the third quarter of this year [in this building alone].”
Perez said moving units in the inventory “depends on the take-up because we haven’t really completed the full one-year cycle.”
“Mind you, we’re entering [the third quarter beginning] June, July and August, which are considered lean months in the hospitality operations. So we’re also managing it properly,” he added.
While Versailles Stay is yet to be launched in May of this year, its concept already has proven that it really works business-wise, according to Sumida.
Without citing exact figures, she bared though, they already have remitted monthly rental dividends to the unit owners from abroad since the soft opening in the third quarter of last year.
“For the first year, we guaranteed a percentage that we agreed upon. And then the second year, it depends on the occupancy rates.” she explained.
“But we also have to offer a kicker, which is a variable or component on top of the minimum guaranteed rent,” Perez added. “If the occupancy is high, the variable component of rent is high. But regardless of occupancy, it will not go down below what we committed to them in terms of minimum guaranteed rent.”
To date, Perez said that guests that have been leasing Versailles units are a mix of foreign and locals, of which 40 percent are corporate clients, 40 percent are walk-ins, and 20 percent are online travel agents.
Seeing a strong market take-up in the near future, Sumida said they are now working on partnerships with two residential properties in Makati City and soon will expand to Cebu and Davao. “We’re targeting 1,500 units [in our inventory] within three to five years.”
While they are currently focused on leasing units in high-end residential projects, she told the BusinessMirror they also eyeing those in the mid-end segment.
Roderick L. Abad
1 comment
Not a new idea as there are others who are doing exactly the same. This is not news it is a commercial.