Ever wanted to own a room in a five-star hotel?
A London company may soon have the answers. Having demonstrated his business-model over the last one-and-a-half years, Johnny Sanderson, a pioneering property-developer from London, has set his eyes on India.
"We are here with a cheque-book and are looking at buying one or two hotels in Mumbai," says the jovial 38-year-old, fresh from "fielding 4,000 enquiries over the last four days" in the commercial capital of India. Johnny's idea is simple, a reason why his wares were sold out in two months the last time he put them on the shelves in London.
"I want to give everybody a chance to have a piece of the action," he says. He buys hotels and then resells it, room-by-room, to individuals, much like a builder would sell of flats.
"Of course, in this case, you don't have to worry about who is going to collect the rent, fix the windows or anything of the sort, but the owner gets the rent anyway."
Of course, not all of the rent- just half, to be precise. "Once you buy your room, you enter into a long-term lease-contract with us under which we keep 50 per cent of the rent generated by that room. Making sure that the rooms are occupied, and well kept, is our responsibility," he says.
Indeed, going by his previous record, it's probably money well-spent. His maiden, and to-date the only, operational venture called 'Guesthouse West' in London's Notting Hill claims an occupancy rate of 78 per cent since it started functioning in April 2004.
Hiring their rooms for 119 pounds a night, the two-dozen or so owners of 'The Guesthouse' have earned an average of nearly Pound 16,400 a year.
"The best thing about my venture is the transparency... In the Guesthouse, they know that each guest pays Pound 119 to stay in their room, they get published lists of the number of guests at each room, the duration of stay, etc.
Unlike owning the share of a hotel or real-estate company, your returns don't depend on how much the hotel manager is keeping for himself, whether all the accounts are correct, how much is being spent on advertisements and renovations etc."
Sanderson, who enjoys the support of the prestigious Scottish Bank in his investments, claims.
While Sanderson's second venture, a 170-room luxury hotel near the Heathrow airport, is "almost ready," it is the opportunities in Asia that occupies him of late.
"In London, everyone can only talk of the booming economies of India and China and so we thought we should provide our partners a opportunity to make investments here too," he says.
Though he has set apart $50 million to buy "one or two" hotels in Mumbai ("the real-estate prices are really high here"), the deals are far from closed, he says. "In my London ventures, we had a lot of queries from NRIs and that is what got me thinking about Indians as possible investors," he said.
"I think there is something about Indians which makes them want to invest in real estate," he says, "Of course, you don't have to wait for us to buy and resell hotel rooms in Mumbai, if you want a safe, secure investment, you can buy one right away at our London hotel too."
Modus Operandi
