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It Makes Good Financial Sense
Investors can expect a return ranging from 5.1% in the first year and up to 8.7% in the fifth year. These returns are net of all costs including, operating costs and expenses, management fees and lease costs, body corporate costs and FF&E contributions. The Sheraton Denarau Villas, which were also developed by Tabua Investments Limited, have proved to be a high quality investment with outstanding returns and good capital growth.
Detailed studies have shown that Fiji still needs additional resorts to accommodate future demand, placing the Denarau Beach Resort in the perfect position to capitalise on the growth in visitor arrivals.
With the significant reductions in airfares now in place between Australia & NZ to Fiji, an increase in visitor arrivals is expected to continue. There has never been a better time to invest in a Fiji hotel development. For further information regarding returns, investors should read through the Investment Summary.
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| Denarau Beach Resort |
| Projected Returns for an Average Apartment |
2006/7 |
2008/9 |
2010/11 |
| Occupancy Percentage |
52% |
60% |
65% |
| Average Room Rate |
FJ$256 |
$269 |
$282 |
| Cash Available to Owner |
32,866 |
44,631 |
55,998 |
| Percentage Return |
5.1% |
6.9% |
8.7% |
| Accommodation Revenue |
|
|
|
| Room |
97,052 |
117,974 |
133,909 |
| Telephone |
1,595 |
1,939 |
2,201 |
| Mini-Bar & In-House Movies |
2,659 |
3,232 |
3,668 |
| Total Revenue |
101,306 |
123,145 |
139,778 |
| Direct Operating Costs |
|
|
|
| Room |
21,279 |
23,077 |
24,694 |
| Telephone |
1,462 |
1,641 |
1,790 |
| Mini-Bar & In-House Movies |
2,313 |
2,676 |
2,964 |
| Total Direct Expenses |
25,054 |
27,394 |
29,448 |
| Other Operating Expenses |
|
|
|
| Administrative & General |
8,912 |
9,602 |
10,237 |
| Marketing |
8,624 |
9,291 |
9,905 |
| Energy |
2,461 |
2,763 |
3,013 |
| Property Operation & Maintenance |
2,294 |
2,539 |
2,748 |
| Total Other Operating Costs |
22,291 |
24,195 |
25,903 |
| Gross Operating Profit |
53,961 |
71,556 |
84,427 |
| Management Fees & Lease Costs |
|
|
|
| Incentive Management Fees |
4,317 |
5,724 |
6,754 |
| Base Management Fees |
2,026 |
2,463 |
2,796 |
| Equipment Lease Rentals |
1,000 |
1,000 |
1,000 |
| Total Management Fees & Lease Costs |
7,343 |
9,187 |
10,550 |
| Body Corporate Costs |
|
|
|
| Property Taxes |
578 |
607 |
638 |
| Body Corporate – Insurance |
6,934 |
7,285 |
7,654 |
| Body Corporate Fee/Sinking Fund |
1,734 |
1,821 |
1,913 |
| Ground Rent |
750 |
750 |
750 |
| Total Body Corporate Costs |
9,996 |
10,463 |
10,955 |
| Other Deductions |
2006/7 |
2008/9 |
2010/11 |
| FF&E Reserve Contributions |
2,026 |
4,926 |
5,591 |
| Repayment of Developer Loan |
1,730 |
2,349 |
1,333 |
| Cash Available to Owner |
32,866 |
44,631 |
55,998 |
| Percentage Return |
5.1% |
6.9% |
8.7% |
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5.1% |
6.9% |
8.7% |
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