Popularity of condotels
As construction activities continue unabated, some non real estate industry insiders have opined that there is now an oversupply of condominiums in the Philippines, especially in the central business districts.
There are others who say that due to the weakening peso, demand from the OFW (overseas Filipino worker) market has significantly decreased by as much as 20 to 30 percent.
While this might be true for some developers, there are others who continue to rely on the OFW market with much success.
One such developer is Sta. Lucia Land Inc., which continues to enjoy a 90-percent OFW market contribution.
Sta. Lucia Land does not focus purely on condominium projects. It is a diversified property company that offers affordable developments ranging from subdivision lots, house and lot packages, townhouses, and condominiums.
Used to be known as a horizontal developer, Sta. Lucia has decided to diversify its project portfolio to truly serve the needs of its growing and more discerning clientele.
Sta. Lucia has not forgotten its core competence of subdivision development despite getting into condominiums and townhouses. In fact, majority of its projects are still horizontal developments. It believes that it is still every Filipino’s dream to have his own house and lot.
But realizing the fact that Filipinos have different investment interests and preferences, it ventured into condominium development simply to cater to this particular market.
A condominium in the right location can be a great real estate investment if you get in at the right place and time.
A condominium is multi-floored with shared common areas. Common areas can include hallways, elevators, gym, and other places, where all residents have access.
When buying a condominium you are effectively buying everything inside the walls of your condo, while everything outside is shared and managed by a group of owners. Each resident has to pay fees to the homeowners association that maintains shared facilities and general upkeep of the complex.
People nowadays invest in condominiums for two reasons: either to live in it or to earn from it.
Some of the reasons given out by those who choose to live in a condo include being able to live within the city, and greater accessibility to their place of work or school in order to reduce their travel time. Add to that better security, and first-rate facilities and amenities.
For some, they invest in condominiums because they see tremendous passive income opportunity from the vibrant demand created by local and foreign tenants—all looking for temporary residences, with varying budgets for mid and high end units.
People who have invested in condominiums have different stories and experiences to tell. Some may be satisfied and contented, others may not.
Sta. Lucia conducts focus group discussions with buyers to determine possible enhancements and directions for its developments. This was meant to prepare the company for its foray in the international scene.
When Sta Lucia Land started its international sales and marketing operations by opening offices abroad in 2011, there were already several other developers that were present and actively selling in other countries.
But Sta. Lucia Land was able to penetrate the market through its condotel business concept, which addressed the common complaints lodged by many condominium investors.
Many of the condominium investors have complained about the difficulty of leasing their purchased units.
They have to compete with the other units for rent in the building, and thus, more often than not, their units end up having no tenants. As such, aside from paying their monthly amortizations, they end up shelling out additional money for monthly association dues, annual real estate tax, unit repairs, and maintenance costs.
With these experiences and concerns of previous condominium investors, Sta. Lucia Land innovated a hassle-free rental program for all its condominium investors by offering its unique and one-of-a-kind condotel concept.
Under Sta. Lucia Land’s condotel concept, its hotel management team will lease back the condominium units of its investors and operate it as a hotel for at least 15 years.
The units are individually owned and a Condominium Certificate of Title (CCT) proves their ownership. It is considered hassle free since the income from the hotel rooms are pooled together and distributed among all condotel unit owners on a pro-rated basis based on the floor area purchased by each unit owner.
While units of the investors are in the hotel rental program, Sta. Lucia Land has given a unique benefit of allowing unit owners to enjoy 30 nights per year in the condotel that they invested in. They may also use three nights, out of their 30-night privilege, to use other condotel developments of Sta. Lucia Land nationwide.
Owners don’t have to worry about the maintenance of their units while these are under the hotel pool rental program.
OFW market acceptance
The condotel concept of Sta. Lucia has been favorably accepted by many of the company’s OFW customers.
And these condotel investors abroad are now the ones pushing and marketing the product to their peers, and promoting the many advantages of Sta. Lucia’s condotel program.
Currently, Sta. Lucia has five operational condotels namely Splendido in Tagaytay; Sotogrande and La Mirada in Mactan Cebu; La Breza in Quezon City; and Stradella in Cainta. With these hotels already operational, Sta. Lucia is able to lure more prospective buyers to invest in its condotel developments as existing investors are now enjoying quarterly dividend income from their units.
Other ongoing condotel projects of Sta. Lucia include Arterra Residences in Mactan, Cebu; Sotogrande Hotel in Davao, Iloilo, and Katipunan; and Neopolitan in Quezon City. New locations in the pipeline include Baguio and Puerto Princesa.
The expanding population, booming economy, and thriving tourism guarantee that the Philippines has no shortage of hotel tenants. In 2016, local tourism reached 65 million and the country is projecting 73 million local tourists for 2017.
Definitely, there will be more demand for hotel rooms and condotel. Sta. Lucia Inc. will be there to respond to the demand.
Liezel Tuason-Magpoc is currently the chief executive officer and executive vice president of Sta. Lucia Ventures Inc., and is now in charge of all the local and international sales Sta. Lucia Land Inc.
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