Dale Capital go ahead with Mauritian hotel
Dale Capital, says Norman Noland, the groups executive chairman, have no intention of holding back on their developments in the hotel and leisure sector despite clear signs that the global economy will take time to recover.
In this sector, he says, the group already has assets valued at approximately R250 million but they plan further investment over the next two years of R200 million.
One could argue that these tough and illiquid times are not right for investment. I tend to agree with this but at the same time our group has a solid balance sheet and can implement its expansion programme with low debt levels and through the issue of new shares.
Dale Capitals most recently completed project is their the 88 suite accommodation blocks serving the Shelley Point Hotel on the Capes West Coast (170km from Cape Town). Although no further building or expansion will take place here right now, it is accepted, said Noland, that a resort development of this kind calls for ongoing additions and upgrades to meet the demands and needs of an ever-growing client base. Projects here, therefore, will probably include fractional ownership villas and a beach club. (The estate is one of only a handful to own and successfully operate a desalination plant and has an exciting plan to ensure that the facility will be as green as possible.)
In Mauritius Dale Capital is awaiting final approval from the Mauritius Regulator to implement an Invest Hotel Scheme (IHS) and as soon as this is in place the board will start with the plans to erect the first phase (44 suites) in its new Les Ecuries Hotel. Noland expects work to start on this within three to six months.
The first phase, said Noland, will include a spa and other facilities of the kind usually found in top Mauritian hotels. The next phase will comprise eight luxury three and four bedroom villas.
Dale Capital already has at Mauritius a beach club at Perebere one of the islands best beaches and the group is now negotiating for a steak and seafood restaurant to be a part of this beach club. This will be run in partnership with one of the existing strong South African brands.
Guests at the new hotel, said Noland, will, therefore, be able to enjoy a true and uncrowded Indian Ocean beach experience but back at their hotel they will enter a different world, one in which a tranquil garden setting styled on the Alhambra/Spanish/Moorish models and covering 4 acres (2ha) which will give peace and quiet to the stressed executive or housewife.
This will be unusual for Mauritius, where 90% of the hotels are beach orientated, he said.
The design of the hotel will also be North African/Moorish. Extensive use will be made of exposed natural stone, slate tiles and mosaics and, in the garden, fountains and water features will diffuse coolness and peace.
The hotel, said Noland, has all its planning approvals in place (apart from the IHS scheme approval, sectional title in SA terminology). This will enable investors to buy one or more suites which will then be put into a rental pool on which they will be a guaranteed initial return. The investor also gets the use of his suite for a specified period each year.
Dale Capitals directors, said Noland, have on more than one occasion been asked why they are going ahead with projects of this kind when the First World is into an austerity phase, with economies heavily in debt and overseas travel and luxury hotels are no longer on many tourists agendas.
Our view, says Noland, is that it will pay to invest in developments of this type in the downturn so as to be up and running when the better times arrive.
Further, he said, it should be realised that with our hotels being in Mauritius and South Africa we are not wholly dependent on Europe. As we see it, the fast developing African and Asian countries are where we will find our clients in the years ahead.
Dale Capitals hotels and resorts, he added, are pitched at four star levels but in general offer a five star service which is appreciated by todays discerning and cost conscious tourists.
Also appreciated, he said, is the fact that Dale Capitals facilities are family orientated and are able to accommodate children without losing their upmarket ambience
Shelley Point, he said, is already performing better than many longer-established SA hotels. The hotel was fully booked over the World Cup period due to its being taken over by the popular Budweiser reality show and occupancy levels, he said, will be good as a result of good corporate bookings and the seasonal summer upturn.
Particularly promising, he added, is the conference and functions market which has been well promoted by Shelley Points sales team.
Dale Capitals other investments are in financial services; fish and fine foods; information technology; and energy, but, said Noland, the hospitality sector is likely to be its fastest growing.
Article by: www.dale-capital.com