FREQUENTLY ASKED QUESTIONS

What's the Investment model?

The investment opportunity is being built by Safari Group (NZ) Limited and designed to exceed the exact specifications set by the internationally renowned Wyndham Hotel Group. Each property has it's own unit title, which is leased back to an approved franchisee for a 30 year term (based on 15 + 5 + 5 + 5 years commercial lease agreement). This business model provides investors with a reputable tenant and the security of guaranteed income each year.

Are the properties freehold title?

Yes, you are purchasing a freehold unit title from the plans.

How many units are there in the development?

There are a total of 44 units. In addition there are 4 Residential titles, and 1 Café title available for investment.

Are the units tenanted?

Yes, the units are leased to a Wyndham Vacation Resorts Asia Pacific Pty Ltd approved franchisee for Ramada Suites Tuam Street under a commercial lease agreement for 30 years based on 15 + 5 + 5 + 5 years respectively.

What are the rents?

The gross rent the approved franchisee for Ramada Suites Tuam Street pays is $662,416 plus GST for the use of all the units, reception, office and car parks. The individual gross rents per unit range from $14,560 p.a to $29,420 p.a plus GST depending on which unit it is. This rent is paid into your account on a guaranteed basis monthly.

Do the rents increase over time?

You are guaranteed an increase of 2.0% per annum (compounding), commencing on the anniversary of year 3 after the commencement date of the lease.

Can the rents decrease?

No, as per the commercial tenancy there is a ratchet clause that prevents the rent from decreasing.

Who are the tenants and what is their track record?

Ramada is part of the Wyndham Hotel Group - the world’s largest and most diverse hotel company, encompassing more than 7,190 hotels and 609,600 rooms in 66 countries around the globe.

How is your rental guarantee structured?

In the past rental guarantees have been offered by certain developers on apartments using inflated prices to cover the cost of the guarantee. In effect, you have funded the rental guarantee through an additional surplus added to the purchase price.

This is flawed commercially and evidenced by notable collapses in rental and capital values at the end of the rent guarantee period.

We only operate using a Commercial tenancy structure. This is the only commercially viable arrangement that commercial property investors look for. The return is NOT based on the profitability of the business but is a fixed rent that Tuam Hotel Limited Liability Partnership pays on a monthly basis for the use of your property.

What deposit is required and where does the deposit go?

A 10% deposit is required which can be in the form of cash or a bond.
Deposit - This will be held in the vendors solicitor's trust account until settlement of the development.  All interest (less withholding tax and any bank and stakeholder handling charges) will be credited to you upon settlement. 

Do I pay GST on the purchase price?

No because there is a commercial tenancy in place the purchase is zero rated for GST. You do need to be GST registered prior to settlement.

The residential apartments on level 5 have GST included in their pricing structure.

Can I live there?

No it is a commercial investment property in respect of the Tuam Hotel Limited Liability Partnership lease, however the Residential units on level 5 can be owner occupied.

When does construction begin?

Construction is due to begin in August 2013.

Sunset clause?

There is allowance in the sales and purchase agreement for reasonable construction and development delays.

Is there a maintenance period?

Yes there is a 90 day maintenance period from the settlement date for purchasers in regards to any building defects in the unit.

What is the construction?

It is a concrete structure including external concrete walls to the tower and Zincalume cladding to the front facades.

Are there any vendor pre sale conditions?

No. The development is not conditional on the vendor achieving a set number of pre sales.

What are the outgoing costs?

(A) Body Corporate Fees (as per pricing schedule)
(B) Christchurch City Council rates (to be set but see pricing schedule for indicative)
(C) Christchurch Regional Council rates (to be set)

Who is the developer and builder?

Safari Group is the builder/developer whose background includes some of New Zealand's prized construction and development projects. The Safari Group boosts extensive experience of all aspects of construction and development from both Residential and Industrial, through to combined Office and Commercial. www.safarigroup.co.nz

Who are the architects?

NAO Architects. The building has been specifically designed to fit into this location and incorporate all requirements of Wyndham Hotel Group to run a successful business.

What is the Carparking?

There are 26 in total. See pricing schedule for car park allocation.

Are the units furnished?

There is a full FF&E package included in the price. See FF&E schedule.

What are the other costs?

Christchurch City Council and Regional rates along with your share of Body Corporate costs which are set by the owners are the only other outgoings.

Who looks after the maintenance?

Day to day maintenance is looked after by the Tenant. Please refer to the lease and Body Corporate budget for full details.

Who set the values?

Independent valuers have set the values of all investment packages based on the rental income and market returns. The value of the unit will increase over time as with any other property investment.

Can I borrow funds?

Yes, this is a standard commercial product which funding institutions will lend on.