Homes, boats and planes attract "fractional title" interest - South Africa

Fractional ownership in South Africa is generally perceived to be exclusively applied to luxury vacation residences; however, the concept is now also being applied to luxury leisure use assets such as helicopters, private planes and boats delegates attending the recent 3rd Annual Fractional Ownership Conference in Cape Town were told by Dirk Wilson, co-founder of fractionalownership.co.za and organiser of the conference.

One Johannesburg company had sold six private planes by fractional ownership and was busy selling their first helicopter; a Cape Town company had recently completed the sale of a R15m luxury cruiser on fractional and was now moving onto their second boat.

Wilson also outlined the number of active players selling assets on fractional ownership in the South African market: vacation residences – 34 companies with 120 plus different residences in more than 41 destinations throughout Southern Africa; one company with seven aviation products; two companies with two top-end boats, and one company putting final touches to their super-car club.

The number of fractional ownership companies involved in the residential sector had dropped dramatically in the last six months. “There were 64 companies active in the residential market six months ago, which has dropped to 34 today. This is a good thing, because it was evident that there was something of a ‘gold rush’ to market. Droves of developers and agents had the perception that a residence that was not selling on the whole ownership market would automatically sell on the fractional market. They could not have been further from reality.

“To operate in the pre- and post-sale fractional market, you will be required to implement management and hospitality support infrastructure for a minimum of 20 years. For the South African market to maintain long-term sustainability and keep its position as the world’s second most established fractional sector (after the USA), it is imperative that new entrants in the market understand what their long-term obligations to their projects are, and are prepared to conduct essential research before they launch a product into the market.

In terms of the volume of fractional residences available on the market in Southern Africa, South Africa has the lion’s share of the market (90%), Mozambique 3,3%, Mauritius 2,5%, Seychelles 1,6%, Tanzania 1,6%, and Namibia 0,8%. In South Africa alone there are an estimated 41 lifestyle destinations/resorts, towns and areas where fractional ownership residences are available. When looking at the volume of residences by province, this time the Western Cape has the lion’s share with 47%, KZN 18%, Limpopo 15%, Eastern Cape and Mpumalanga 5% each, Northern Cape and Gauteng 3% each, and North West and Free State 2% each.

Wilson says there is global interest in Southern African fractional offerings, as recorded on fractioanlownership.co.za. “Most (74% of total enquiries) some from South Africans, and then, in descending order, from the UK, USA, Canada, Australia, The Netherlands and United Arab Emirates.

 

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