AirHotel comprising multiple AirBnB and other apartments suitable for 12J (SmartLoan Option). Refer different Fact Sheet for cash investment option.
Acquire (via qualifying companies) the AirHotel Sectional Title Rooms and earn annual hotel income from operations. Surplus cash will be managed and invested in money market or similar interest earning products. The Qualifying Companies shall adhere to the definition of “Hotelkeeper” as required by Section 12J of the Income Tax Act..
Asset underpinning the Investment:
AirHotel comprising multiple AirBnB and other apartments suitable for 12J.
Hotel Management Company:
Managed by Futureneers in partnership with various AirBnB management and technology companies such as:
- Manage Air (www.manageair.co.za)
- Propr (https://www.propr.co.za)
- Wishbox (www.wishbox.co)
It is the objective to develop and own the complete supply chain once critical mass has been achieved.
Minimum Investment Amount:
R1 million. Smaller investments may be considered and approved by the Board, provided that investment is by invitation only, only available to qualifying investors and not an offer to the Public to subscribe for shares.
Minimum 5 years | Investors may sell shares within 5 years, but such a sale will result in a recoupment of the Section 12J Tax benefit previously claimed. In addition, all sales will be regulated in terms of the waterfall approach prescribed by the Class 28 Subscription Agreement.
A Structured Loan is available to qualifying investors to fund up to 95% of their Subscription Prices for the specific class of Investor Shares. The main objective of the Structured Loan is to enable Investors to settle their Structured Loans as quickly as possible and within 5 years from the initial investment date, even while paying a monthly instalment similar to a traditional 20 year mortgage bond. Investors participating by way of the Structured Loan should therefore take note that they will contribute an additional balloon payment (which may be funded by way of the SARS Section 12J Benefit or otherwise) within 6 months and that all dividends and distributions from the investment will be used to pay off any outstanding debt (after Withholding taxes have been paid to SARS). A final balloon payment is only due should a shortfall and outstanding balance on the loan still be due before the end of the 5 year investment period. Details of the Structured Loan is presented in a separate Loan Agreement entered into between each Investor and the NCR Registered Finance Provider
Estimated Annual Hotel Yields:
Targeted annual hotel yields of 7% per annum.
Estimated annual asset appreciation:
Targeted annual asset appreciation at 7% per annum. We furthermore believe that we can buy property at below historical values, being a "buyer's market", which will enable the fund to achieve its targeted 7% avg. appreciation in asset value over 5 years.
Additional Benefits to Investors:
- 10 room nights flexible free usage per year (limited to availability).
- Advanced bookings allowed (booking terms to be established).
- Discount on bookings over and above free nights (booking terms to be established).
Management Fees or Dividends:
The Management Company will be remunerated by way of either a Management Fee or Management Dividends, details of which is recorded in the Class Subscription Agreement. The total cost to the investor is summarised below:
- Upfront: 5% of Subscription Price (already included).
- Annual: 1.5% of Subscription Price (adjusted every year for inflation using CPIX). First 5 years fees already included in Subscription Price.
- Performance: 20% of Super Profits realised for Investors as defined in the PPM.
Exit options after 5 years:
At the end of 5 years, shareholders will have the following 3 exit options:
- Options 1: Exit for cash (final cash dividend or buy-back of shares)
- Option 2: Exit by way of a distribution in specie. This simply means that investors with a share value greater than the value of an individual unit, may be distributed a unit as a dividend in specie.
- Option 3: Remain invested and retain shareholding similar to that of a “fractional ownership” structure, with the continued benefits of owning a share in a hotel, earning ongoing dividend income and having the additional other benefits previously described.
Investors should also note that the Directors endeavour to take all the necessary steps to enable investors to exercise any of the three options above, but that such exit options are not guaranteed. Investors should further take note than on exiting a 12J Structure, Capital Gains Tax or Dividends Tax may apply (as the case may be), while the base cost of their investment will be deemed to be zero for Capital Gains Tax purposes. The Directors endeavour to consult with Investor Shareholders closer to the time, and present the most appropriate and cost and tax efficient Exit options and to work close with the Investor Shareholders to execute such options.
Should the investors choose option 3 above, no exit tax will apply, while fees will be reduced as per the PPM.
Refer separate sections herein for a detailed analysis of targeted returns and targeted loan repayment period.
Contact us to setup a meeting with one of our Executives to discuss targeted cashflows