Simali Villas - Tobago

Background

Simali Villas is a collection of 10 stunning one and two bedroom villas to be constructed on the coast of Tobago in the Caribbean.

The villas have been designed and specified to maximise the income from holiday rentals by exploiting a gap in the market for small, high quality villas for couples and families. Prices are from £150,000 to £230,000.

We anticipate that net returns of 10-15% on initial investment should be achieved on maturity and there is significant opportunity for capital growth. There are no ownership restrictions.

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About Tobago

Tobago is in the southern end of the Caribbean and is the smaller part of the 2-island republic of Trinidad and Tobago. Located only 150km from the Venezuelan coast it is geographically more part of the South America than the Caribbean.

Tobago is a holiday paradise. The climate is tropical with December to May being the dry season although, with the average daily max temp at 30-32°C every month, it is an all season destination. It is outside the main hurricane belt.

Tobago is well known for its carnivals, particularly in February and the trade winds and warm waters provide great conditions for water sports.

Trips to the rainforest to see the birds and the waterfalls are essential and there is snorkelling and glass bottomed boats going out to the reefs in the south.

There is a wide selection of shops and restaurants and the tourist infrastructure is well developed.

Getting to Tobago is easy from the UK with BA and Virgin offering regular services. However the easiest and cheapest is the twice weekly Excel Airways service from Gatwick with flights around £400 return and excellent timing for an easy week’s holiday.

Villa Location

The Simali Villas site is on the south-east shore of Tobago just outside the small but lively capital of Scarborough. This is a quieter and less developed side of Tobago and tends to be the preferred residential location of Tobago’s more upmarket residents. The centrepiece is the beautiful Bacolet Bay to which the villas have private direct access. Overlooking the beach is the Blue Haven Hotel, Tobago’s best boutique hotel, and there are 3 or 4 restaurants within walking distance.

Position

The location of the villa site is stunning. In our view it is one of the best undeveloped positions left in the Caribbean and one of the few places in Tobago where you can have uninterrupted sea views and beach access without having to cross a road. Further, the site is raised on a small cliff above the sea to make the most of the view and to catch the sea breeze. As well as the main beach there will be access to a small private beach and a sheltered swimming/snorkelling area. It is an oasis of calm and serenity with stunning views.

Site Layout

The two key criteria in the design were privacy and views. Whilst each villa has only one or two bedrooms all are on two levels to enable sea views from the master bedrooms and the main living areas. Each villa also has a private terrace and garden with direct sea views.

There is a large communal pool but in contrast to most developments, the pool has been located on the land-side of the villas to preserve the sea views and the peace and privacy for residents whilst in their private gardens or on their terraces and balconies.

Villa Design

The key element of the design brief for the villas was to avoid the appearance of an apartment block or a terrace of town houses, but rather to give the feel of a small colonial estate or village. The final design basis is that of a central colonial style manor house with two outlying buildings.

The main building compromises 3 two-bedroom villas and 2 with one bedroom. To the west is a building with 2 two-bedroom villas and to the east a third building made up of 1 two-bedroom villa and 2 one-bedroom villas.

All villas will have private front gardens with a path leading to the entrance from the parking and communal pool area.

Communal Facilities

The site is part of a larger estate with a security entrance from the public road. A private road leads through the estate off which are the Simali Villas site and a small number of other private single villa plots. At the end of the estate road (about 100m long) there are private steps down to the main Bacolet Beach. Simali Villas will have a separate secure entrance from the estate road. This will lead onto a parking area with 1 parking space for each villa and 2 overflow/visitor spaces. The communal pool will be 15 metres by 6 metres and comprise a main section for recreation and fitness swimming. To one side of centrally positioned steps will be a “wet-deck” for sunbathing and, on the other side, a shallow section for younger children. From the pool area there will be a path leading between the villas down towards the small private beach and swimming area and there are also plans for a small pavilion halfway down the beach path for communal use and potential to be used as a massage area or for romantic dining.

Pricing

The villas are priced as follows:

• One-Bedroom Villa with smaller garden: £150,000
• One Bedroom Villa with large garden: £160,000
• Two Bedroom Villa with small garden: £210,000
• Two Bedroom Villa with double balcony: £220,000
• Two Bedroom Villa with large garden: £230,000

The villas are priced on the basis of a shareholding in the Simali Villas holding company with an exclusive “Contract of Use” for the villa in question, and the option to convert to a Tobagonian lease at any point. The price includes full build of the villa and communal areas, excluding furnishing and fittings. Kitchens include built-in oven and hob but not fridge/freezer and dishwasher, which will part of a furnishing package.. Bathrooms are fully fitted. Bedrooms include built-in wardrobes and air-conditioning. There is the option for private swimming pools or spa pools with each villa.

Financial Model and Forecast

Fleewinter has been arranging holidays in Tobago since 2003 and whilst there are reasonable hotels and a good selection of larger villas there is a very poor supply of smaller villas or quality apartments for couples and small families. We therefore believe we will be able to achieve good occupancy and strong rental rates. We will offer all investors the opportunity to join a rental pool whereby all the rental income is shared in proportion to the initial investment so ensuring that regardless of which villa is purchased all investors will receive the same return on investment. A 5 year financial has been prepared to show the yield of up 15% per annum net of all costs. This equates to £20,000 per year for a one bedroom apartment or more than £30,000 per year for 2 bedrooms

The Legal Process

Fleewinter has developed a unique purchase process for overseas properties that enable the buyer to minimise their tax liability and gain total security at all stages in the process. A large proportion of the process is under English law. In summary

This process means the investor effectively owns the plot of land immediately on signing and gives the security that if anything untoward happen to Fleewinter the land and any buildings constructed are already owned by the investor. There are further protections in that the Simali Villas holding company will have a very restrictive shareholder agreement and will not be allowed to borrow money secured on any assets.

We strongly advise that investors conduct their own legal due diligence. In other Fleewinter projects, investors have shared the cost of a UK lawyer reviewing the documentation and also commissioning a overseas lawyer to conduct a due diligence of the ownership of the land (ie a legal search) and a verification that the planning consents are valid. With shared legal cost across all investors this makes them very reasonable and relieves investors of many of the hassles associated with buying properties overseas

Payment Stages

Payment 1: 5% Signature of Contract
Payment 2: 25%. Transfer of Ownership
Payment 3: 20% Interim Payment after 6 months
Payment 4: 50% Completion of Build

Timing

Project construction will commence in the Autumn of 2007 with completion at the end of 2008.

Reference

• For more details about Fleewinter’s operation in Tobago and the rest of the world go to www.fleewinter.com
• The Blue Haven Hotel and the beach area can be seen at www.bluehavenhotel.com
• A good site for a general review of Tobago including many of the places to stay is www.mytobago.info
• The Infinity Villa is the immediate neighbour of the Simali Villas site and can be viewed at www.infinityvilla.com