PETALING JAYA: Believe it or not, now you can co-own a hotel room through a “hotel sharing” concept without having to fork out a huge amount of money for the investment.
Ho Wah Genting (USA) Ltd’s Goldmen Suites hotel project, located on its most prized parcel of land on Jalan Imbi in Kuala Lumpur, has gained attention with its unique “crowdfunding” strategy.
According to a sales executive, the 61-storey Goldmen Suites project will be managed by the company upon completion in 2021 with a guaranteed return of 5% per annum for a period of 10 years.
The project consists of about 600 hotel rooms with a built-up size of 500 square feet each. There are three different packages offered – RM125,000, RM135,000 and RM145,000 per investor – depending on the unit level.
A hotel room will be shared by 12 buyers on a pooling basis. Buyers have the option to sell back their interest to the developer 10 years later at the initial investment price. This means that with an investment of RM125,000, an investor would have an interest in a unit worth RM1.5 million.
The total gross development value of the project is more than RM900 million.
Construction work is expected to start soon after land clearance. The buyers have to pay a downpayment of RM5,000 and the balance is to be settled within 24 months.
The sales executive said the project has garnered a take-up rate of about 20% so far.
Ho Wah Genting (USA) is part of Ho Wah Genting Group, but is not parked under the listed Ho Wah Genting Bhd (HWGB).
Its website shows that Ho Wah Genting Group (USA) is an investment holding company engaged in promoting entertainment membership, junket operating services, online entertainment gaming, investing and marketing of real estate property.
When contacted, the group declined to comment, but stressed that the project has nothing to do with HWGB.
Zerin Properties CEO Previn Singhe said it is good to see new initiatives in real estate investments, but he highlighted that a good mirror to crowdfunding is REITs, which are regulated and safer when one wants to participate in big-ticket real estate deals with smaller capital base.
“While it provides cheaper access to bigger ticket properties via co-sharing, it is not liquid in terms of exit strategy and it is not regulated,” he told SunBiz.
CBRE-WTW Foo Gee Jen said while the scheme might have its attractions, such as not having to worry about getting a tenant as is the case in a guaranteed rental return scheme, he cautioned on the underlying risks.
He said those looking to invest would need to be mindful of the fact that they are just owning a “piece” of a unit and therefore may not be accorded privileges of a “whole” unit owner.
For example, property owners have to sign hotel management agreements with hotel operators and will these “piece” owners be looped in on this?
Besides Goldmen Suites, there have been a few all-suite hotel projects in Malaysia, including the Best Western Premier Dua Sentral on Jalan Tun Sambanthan. Listings on the property websites show that a few units are available for sale, with prices ranging from RM780,000 to RM980,000.