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Rather nice! is that 14F? Its pity it does not say who the international operator is. The hotel with 128 suites however seems to be the right size for PE's first 5 star hotel. i dont think there will now be another one in the next 4 years tho. seems almost sad that they dont have a 5 star hotel yet.

PS: i really like the website for the development!!
 

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^^ ya i know but to be honest, if they have coped without a 5 star hotel up to now, i really find it difficult to forsee high occupancy with 2 hotels offering 250 or more 5 star rooms. That will have a knock on effect on the 4 star Courtyard suite with decling occupancy if the 5 star is taken in its place.
 

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BITTER HEART NEVER REST
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The problem with PE is the lack of attracting tourists, especially local ones. I guess projects like Statue of freedom will play a major role in that regard, but again they still need to do more than this. Durban came with Ushaka a and I guess PE should come with more projects of interest to lure tourists to their shores. This will help them in fighting poverty and create jobs.
 

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Radisson to manage The Reef on Marine

Top end of market for Bay‘s Radisson hotel

By Bianca Capazorio Business Correspondent

Eastern Province Herald

IN A MAJOR boost for tourism in Nelson Mandela Bay, Port Elizabeth‘s Auspex properties yesterday finalised a deal with international hotel operators Rezidor to operate the R320-million hotel.

The hotel, Reef on Marine, will become part of the international group‘s Radisson brand, and will now be called Radisson Port Elizabeth.

Auspex property chief executive officer Ben Nyaumwe said the reason he had chosen the Rezidor group, from a number of interested international hotel chains, was because of their “high service orientation”.

Nyaumwe also said that he felt the hotel group would offer better synergies between their Cape Town-based Radisson hotel and the Port Elizabeth one, than other groups could offer.

Rezidor group business development director for Africa Andrew McLachlan said South Africa held vast opportunities to grow the Radisson brand and Port Elizabeth, being a major location, was well suited to the company‘s expansion plans.

“We‘ve got Cape Town on the one end of the Garden Route and we felt the market was right and ripe for a first class Radisson hotel at the other end, in Port Elizabeth”.

The management agreement between the two companies is structured for 15 years, renewable three times for a period of five years each.

Nyaumwe said big projects like Coega and Port Elizabeth‘s status as a World Cup host would see growth in tourism continue in a stronger upward trend than ever before.

Construction has already begun on the site, with bulk earthworks currently on the go. Nyaumwe said full construction would begin on May 1, with the first visitors scheduled to arrive in December 2008.

McLachlan and Nyaumwe however disagree on initial occupancy rates, with McLachlan cautiously saying “I believe the hotel will be well received and we will have recorded an occupancy rate of above 50% in our first financial year”. Nyaumwe however has set his sights much higher stating “I believe we will fill the hotel up before we‘ve even opened its doors”.

Nelson Mandela Bay Tourism chief executive officer Fezikile Tshiwula said the hotel would focus on a gap in the current tourism market.

“There has been a serious challenge for Port Elizabeth in servicing the top end of the market,” he said.

The Rezidor group owns nearly 300 hotels in more than 50 countries. Other brands in their collection cover the luxury market with Regent and Missoni, as well as other markets through Park Inn and Country Inn.

McLachlan said that for expansion into the South African market, the Radisson and Park Inn brands were being targeted.

The company, of Scandinavian origin, started operating in 1960.

Owned by Swedish national carrier SAS airlines, the hotel group expanded into routes where the airline flew.

The company listed on the Stockholm stock exchange last year.

[email protected]
 

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PE Gets 5-star International Hotel

2007/04/26

Property24.com

Port Elizabeth's first five-star hotel, which will be operated by the internationally-acclaimed Rezidor Hotel Group, will open the doors of its 173 luxury suites to guests in December 2008.

Already under construction in Summerstrand's prime Marine Drive, the Radisson Hotel is a R320- million project initiated by Eastern Cape-based Auspex Property.

Speaking at this week's signing of the official operator contract between Auspex and Rezidor, Europe's second largest hotel brand, Auspex managing director Ben Nyaumwe said the hotel presented a five-star sectional title investment opportunity for Nelson Mandela Bay to benefit from events such as the 2010 FIFA World Cup.

The hotel would lease the suites from sectional title owners on a turnover-based rental of 20 percent of the total hotel revenue, he said. This included revenue derived from hotel operations such as the wellness and conference centres and its restaurants.

Guaranteeing a minimum return on investment of 6 percent of the purchase price for two years, Nyaumwe said financial returns could be as high as 16 percent or more per annum. Investors could expect their first payout early in 2009.

Spread out over three stands, the 14-storey hotel has been designed in a contemporary style that will blend in with the area's existing buildings and compliment its coastal setting. Glass-enhanced architecture will ensure extensive natural light in the suites, all of which will overlook the Indian Ocean.

The Radisson would be a landmark building for Port Elizabeth, said Nyaumwe, adding that the use of "smart building technology" would ensure its sustainability. Fully wireless enabled with 24-hour high speed internet, and a mere five minute drive from Port Elizabeth's airport, it would be ideal for business people. It was also superbly situated for holiday makers who would have access to 40 kilometers of South Africa's finest beaches, including Hobie Beach, which enjoyed international blue flag status. In addition, Port Elizabeth was the gateway to the Garden Route and close to a number of top golf courses and nature reserves, he said.

Other features of the Radisson will include a private hotel yacht for cruises and a 24-hour complimentary shuttle service for guests. It will also have lounges, a cocktail and cigar bar and a signature nouvelle cuisine restaurant.

Nyaumwe said the Radisson would offer a fully-equipped business and conference centre, and banqueting facilities on a par with the best in the world. A leading wellness spa and gym will be on site as well as a sea-fronting, glass rim-flow swimming pool. Just a stone's throw away from hotel is a secure beach, and the hotel is within walking distance of a casino and a host of entertainment and shopping facilities.

Sales are already strongly underway, with investors paying anywhere from R2,05 million for a luxury suite to R2,85 million for one of the hotel's three presidential suites, Nyaumwe concluded. – Ingrid Smit
 

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Good that its an international brand. PE is serverely lacking in tourist infrastructure and this will help alot, but tourist products now need to also be developed. Work needs to happen on tourist precincts, like the long talk about tower and waterfront
 

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South Africa: Rezidor to open a new Radisson in Port Elizabeth

Hospitality Net

25 April 2007

The Rezidor Hotel Group has signed a contract to manage a new Radisson hotel in Port Elizabeth, South Africa. The property, with 173 rooms, will be built in the upscale, busy beachfront Summerstrand district and is scheduled to open in late 2008. From 2007 to 2009, Rezidor will add 20,000 rooms to its portfolio.

“South Africa is an important market for our organic business development. Port Elizabeth meets our growth strategy as we plan to open more hotels in key cities and resort destinations within the country”, comments Kurt Ritter, President & CEO of The Rezidor Hotel Group. “We see promising potentials in this country and are glad to arrive in Port Elizabeth, the fifth largest city with 1,5 million inhabitants”.

The Radisson Port Elizabeth will be the first international first class brand in the Nelson Mandela Bay offering panoramic views over the Algoa Bay, and featuring services such as a swimming pool, wellness centre and gym, restaurant & bar, 8 conference and meeting rooms and a business centre. Guests will be able to reach the city centre in 2 minutes and the international airport in 10 minutes. Port Elizabeth is located on the country’s south eastern coast, approximately 760 kilometres from Cape Town. The city has beautiful beaches and nearby “big six” private game reserves – as well as the Coega Industrial Development Zone (IDZ); South Africa’s premier location for new industrial investments covering 11.000 hectares of land.

Owner of the future Radisson hotel is the South African company Auspex Property.

Facts & Figures:
Property: Radisson Port Elizabeth (to open)
Rooms: 173

Between 2007 and 2009, Rezidor will add 20.000 rooms to its portfolio.
 

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The Reef on Marine becomes Radisson Port Elizabeth

Thryve,

Please rename this thread as follows:


# Radisson Port Elizabeth - Hotel - 15F - Summerstrand, Port Elizabeth


This development is spectacular!
 

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Karoo Prime
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I see there is a short feature in Property magazine about this. Good news for Port Elizabeth. Could someone please rename this thread to Radisson Port Elizabeth?
 

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Largest Hotels in Port Elizabeth

1. Garden Court Kings Beach - *** - 285 rooms - built 1971/1995
2. Summerstrand Hotel - *** - 241 rooms - built 1971
3. Radisson Port Elizabeth - ***** - 173 rooms - opening 2008
4. City Lodge Port Elizabeth - *** - 148 rooms - built 1989
5. Protea Hotel Edward - *** - 106 rooms - built 1903
 

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Hotel joins worldwide exchange

Eastern Province Herald

June 8, 2007

By Bianca Capazorio Business Correspondent

PORT Elizabeth‘s new Radisson Hotel yesterday became the third coastal property in South Africa to join the prestigious Registry Collection.

This is a global network of luxury leisure resorts and hotels which works on an exchange programme, allowing investors in a particular property to swop their allocated time for time in one of more than 100 Registry Collection partners across the world.

The Radisson Hotel is being developed by Ben Nyaumwe and Auspex Property, and is due for completion in 2008.

Speaking at the signing of the agreement between Auspex Property and the Registry Collection, Nyaumwe said it was a major milestone for Port Elizabeth, as Radisson would be joining the top 1% of the world‘s leisure destination properties.

Nyaumwe said his company was “committed to the tourism growth potential in the Eastern Cape” and said the hotel‘s association with the Registry Collection would allow Port Elizabeth to continue to position itself as an international tourist destination.

Registry Collection portfolio manager (Africa) Dominique Moralee said Port Elizabeth was a “growing attraction which was well-known internationally”.

She said Radisson was a “world class” development. The agreement would allow investors in the hotel the chance to travel anywhere in the world.

Investors in Radisson receive 28 days to be spent at the hotel or in one of the partner hotels.

Registry Collection marketing director (Africa) Brendan Mbatha said the hotel would allow travellers from the US and Europe to travel to Port Elizabeth and not have to compromise on luxury.

“There is a perception that when you come to South Africa, you come here to rough it, but this hotel will put Port Elizabeth on the map in terms of international tourism,” he said.
 

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Rename thread to Radisson Port Elizabeth

Dysan1,

Now that you are in charge can you rename the title of this thread as follows:

# Radisson Port Elizabeth - Hotel - 15F - Port Elizabeth

The development used to be called The Reef on Marine before Rezidor signed the management contract with the developer.
 

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World class standards for PE hotel

Property24.com

2007/08/20

Port Elizabeth's Marine Drive skyline is receiving its tallest addition to date and this five star luxury hotel looks set to be the definitive landmark along this stretch of PE's coastline. The whitewashed building and glass-walled exteriors of the Radisson SAS Hotel Port Elizabeth is a groundbreaking and innovative design unlike anything in the region.

The Radisson is affiliated to Auspex Property developers, The Registry Collection, Camelot Spa Group, Technogym and is a brand of The Reizdor Hotel Group. Auspex is responsible for building the hotel with its 173 sea facing suites, of which 147 are luxury, 11 business class, 12 king and 3 presidential.

The hotel's glass façade is protected by a Silent Gliss System to prevent heat gain and offers panoramic views over the Indian Ocean and Algoa Bay. The popular Hobie and Pollock beaches lie on the Radisson's doorstep and negotiations are ongoing between the developer and the local municipality to create the first private beach in Port Elizabeth through Private Public Partnership (PPP).

According to Dominique Moralee, portfolio manager for the Registry Collection (Africa), so far interested parties and buyers have not been attracted to the project by 'big media splashes.' "Rather, it's basically been word of mouth," adds Moralee. The success and rapidity with which buyers have approached the project has resulted in 80% of the units already being sold, before construction started in April 2007. "Interestingly, the majority of buyers are predominantly from the domestic market," says Adrian Zanetti, marketing director of The Registry Collection (Africa).

The 173 units are priced accordingly: the luxury suites sell for R2,05m, super luxury for R2,425m, king luxury suites for R2.65m and presidential luxury suites sell for R3,65m. All the suites have been sold, except for a few luxury suites.

The hotel is conveniently located five kilometers from both PE's International Airport and CBD, as well as 70 kilometers from Addo Elephant National Park.

An investment product
Zanetti goes on to say that the Radisson is "very much an investment product," and most of the units are based on sectional title schemes, so all the owners will be part of the body corporate, and as a result will have a say in the overall running of the hotel.

Upon purchasing a unit, investors are assured a guaranteed return on investment of 8% for the first two years, that is extended a further one year at 7,5%, after which no guarantees are assured. Currently, guaranteed returns on investment are something of a 'hot-topic', and although the Radisson has assured the hotel's financial viability at 45% with a room rate of R950, financing guaranteed returns then falls on the shoulders of management. Zanetti says he believes this guarantee will be underwritten by Auspex in the event of under-occupation.

Zanetti refers to the three years as a safety net on the relationship between investors and hotel management, as the Radisson deals with its growing pains of new marketing campaigns, building a client base and overall establishment of the iconic landmark.

Investors earn their returns in two ways; either through capital appreciation upon reselling the unit, after growth in the market has taken place or as an income strategy by collecting quarterly returns, paid out of lease proceeds.

Value added services
Primarily targeted at affluent buyers, the Radisson courtesy of their affiliation with The Registry Collection provides members with access to some of the most desireable and internationally acclaimed hotels and resorts, across the globe.

The membership with The Registry Collection is valid for a 10 year period and members are able to exchange between local and international destinations offering wildlife, spa, beach and golfing activities, as well as luxurious international experiences.

Furthermore, a concierge service is available 24 hours a day, 365 days a year. Zanetti said that Registry chose 'La Concierge', a company based out of London, to cater for members' every whim or fancy.

Zanetti further adds that the there is a "network established locally", so clients can request park passes, sports tickets, cultural or artistic performances within South Africa and overseas – the list is endless.

Concludes Bailey Schoeman, PR and Event Manager for Auspex Property, "We are thrilled about this affiliation to The Registry Collection, and are proud to be able to offer the Radisson Hotel Port Elizabeth investors the incomparable lifestyle benefits afforded through membership to The Registry Collection. The agreement between the two parties serves to reinforce the fact that Nelson Mandela Bay is undeniably a world-class travel destination." –James Monteiro
 

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This article brings up the problems some of us raised with this hotel, as well as some new ones. Will PE be able to support the room rates is surprisingly lower down the lsit of the problems, even though it still is one

PE HOTEL: Guaranteed return too good to be true?

Oct 04 2007 12:00 AM
Joan Muller

HOTEL DEVELOPERS, like their residential counterparts, are starting to climb on the "guaranteed return" bandwagon. Most of these developers are selling sectional title hotel suites and buy-to-let apartments with a guaranteed income return of between 6% and 10% of the buying price in the first year or two after transfer.
The developer of the new Radisson SAS Hotel in Port Elizabeth has upped the stakes in the guaranteed return game considerably, stretching its pledge period to an unprecedented 15 years. Radisson is part of the Stockholm-listed Rezidor Hotel Group and one of a number of international hotel operators claiming its stake in South Africa's hospitality industry in the run-up to the 2010 Soccer World Cup.

Hotel suites in the Radisson - Mandela Bay's first five-star hotel - are being sold on a sectional title basis. The 173 rooms cost between R2,05m and R3,65m and are sized from 30sq m to 90sq m. The Port Elizabeth-based developer - Aumwe Property Developers - guarantees a minimum return on investment of 8% for the first two years and 7,5% for years three to 15.

Owners will be entitled to 28 days/year free usage of their unit. Some 20% of the gross hotel revenue - including revenues generated by the hotel's spa, conference facilities, restaurants and shops - will be paid out to investors. Surprisingly, owners won't be charged any of the usual costs associated with property ownership, such as levies, rates and taxes or maintenance.

The attractive terms of the Radisson offer do raise questions concerning how viable guaranteed return products are, particularly given that some previous developments of this nature never came to fruition.

A case in point is The Lincoln at trendy, mixed-use precinct Melrose Arch in the northern suburbs of Johannesburg, which was canned earlier this year. The luxury development was brought to the market off-plan 18 months ago, offering buyers a 10% guaranteed rental income for the first year after completion. Construction was due to start early this year but the project flopped. The development is now being "re-engineered" - sans the guaranteed rental clause.

The 10% guaranteed return, coupled to rapidly rising building costs, would no doubt have made it near impossible for the developer to earn a decent profit had The Lincoln gone ahead in its original guise.

Joop Demes, MD of Golding Hotel Investment Consultants (GHIC), says though guaranteed returns are a growing international trend used to churn stock, he's nervous about the Port Elizabeth model.

Not only is the 15-year guarantee period unheard of, but Demes says there's added risk in that hotel occupancies and room rates in Port Elizabeth aren't yet on a par with those of Cape Town, Durban or Johannesburg.

Another commentator doubts whether the developer will earn enough revenue to cover the promised returns, particularly as only 20% of the Radisson's income will be paid out to investors. "The sums don't add up."

An added concern is that buyers are overpaying for units, as developers often build guaranteed returns into asking prices. But Aumwe Property Developers MD Ben Nyaumwe says that suggestion is ridiculous. "Published statistics show that it costs on average between R1,75m and R2,5m to build one five-star hotel room. The Radisson is being built to international standards so it's at the top end of that scale."

Nyaumwe maintains that the minimum guaranteed return of 8% in the first two years is based on projections of a relatively low occupancy level of 55%. He believes those calculations are conservative and likely to exceed 16%/year, given the Eastern Cape's tourism growth potential and limited supply of hotel rooms.

However, Nyaumwe admits that there's a chance that the hotel revenue alone may not be sufficient to meet obligations to investors in the first two years. "But we have sufficient cash reserves in the business to cover any shortfall." Nyaumwe is apparently also in the process of negotiating performance insurance with a financial institution to take risk away from investors. That means that the developer will effectively pay insurance premiums to guarantee payouts if targeted revenues aren't achieved.

Meanwhile, latest results from Deloitte's Hotel Benchmark Survey show that the performance of SA hotels continues to improve. Hotel revenue per available room throughout SA was up 16,7% in the first six months of 2007 (year-on-year), while average occupancies have increased 2,1% to 70,4% over the same time.

It's uncertain to what extent, if any, Port Elizabeth's hotels have shared in those performance stakes because it isn't one of the cities tracked by Deloitte's hotel survey.
 

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PE Hotel : Guaranteed return too good to be true?

Finweek

03 Oct 2007

Intro
Hotel Developers, like their residential counterparts, are starting to climb on the "guaranteed return" bandwagon.

Most of these developers are selling sectional title hotel suites and buy-to-let apartments with a guaranteed income return of between 6% and 10% of the buying price in the first year or two after transfer.

The developer of the new Radisson SAS Hotel in Port Elizabeth has upped the stakes in the guaranteed return game considerably, stretching its pledge period to an unprecedented 15 years. Radisson is part of the Stockholm-listed Rezidor Hotel Group and one of a number of international hotel operators claiming its stake in South Africa's hospitality industry in the run-up to the 2010 Soccer World Cup. Hotel suites in the Radisson - Mandela Bay's first five-star hotel - are being sold on a sectional title basis.

The 173 rooms cost between R2,05m and R3,65m and are sized from 30sq m to 90sq m. The Port Elizabeth-based developer - Aumwe Property Developers - guarantees a minimum return on investment of 8% for the first two years and 7,5% for years three to 15. Owners will be entitled to 28 days/year free usage of their unit. Some 20% of the gross hotel revenue - including revenues generated by the hotel's spa, conference facilities, restaurants and shops - will be paid out to investors.

Surprisingly, owners won't be charged any of the usual costs associated with property ownership, such as levies, rates and taxes or maintenance. The attractive terms of the Radisson offer do raise questions concerning how viable guaranteed return products are, particularly given that some previous developments of this nature never came to fruition.

A case in point is The Lincoln at trendy, mixed-use precinct Melrose Arch in the northern suburbs of Johannesburg, which was canned earlier this year. The luxury development was brought to the market off-plan 18 months ago, offering buyers a 10% guaranteed rental income for the first year after completion. Construction was due to start early this year but the project flopped.

The development is now being "re-engineered" - sans the guaranteed rental clause. The 10% guaranteed return, coupled to rapidly rising building costs, would no doubt have made it near impossible for the developer to earn a decent profit had The Lincoln gone ahead in its original guise. Joop Demes, MD of Golding Hotel Investment Consultants (GHIC), says though guaranteed returns are a growing international trend used to churn stock, he's nervous about the Port Elizabeth model.

Not only is the 15-year guarantee period unheard of, but Demes says there's added risk in that hotel occupancies and room rates in Port Elizabeth aren't yet on a par with those of Cape Town, Durban or Johannesburg. Another commentator doubts whether the developer will earn enough revenue to cover the promised returns, particularly as only 20% of the Radisson's income will be paid out to investors.

"The sums don't add up." An added concern is that buyers are overpaying for units, as developers often build guaranteed returns into asking prices. But Aumwe Property Developers MD Ben Nyaumwe says that suggestion is ridiculous. "Published statistics show that it costs on average between R1,75m and R2,5m to build one five-star hotel room. The Radisson is being built to international standards so it's at the top end of that scale."

Nyaumwe maintains that the minimum guaranteed return of 8% in the first two years is based on projections of a relatively low occupancy level of 55%. He believes those calculations are conservative and likely to exceed 16%/year, given the Eastern Cape's tourism growth potential and limited supply of hotel rooms.

However, Nyaumwe admits that there's a chance that the hotel revenue alone may not be sufficient to meet obligations to investors in the first two years. "But we have sufficient cash reserves in the business to cover any shortfall." Nyaumwe is apparently also in the process of negotiating performance insurance with a financial institution to take risk away from investors. That means that the developer will effectively pay insurance premiums to guarantee payouts if targeted revenues aren't achieved. Meanwhile, latest results from Deloitte's Hotel Benchmark Survey show that the performance of SA hotels continues to improve.

Hotel revenue per available room throughout SA was up 16,7% in the first six months of 2007 (year-on-year), while average occupancies have increased 2,1% to 70,4% over the same time. It's uncertain to what extent, if any, Port Elizabeth's hotels have shared in those performance stakes because it isn't one of the cities tracked by Deloitte's hotel survey.
 
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