Luxury Resort Co-Development Fund
A TOP BRAND can add 20% or more to a property's value.
BRANDED PROPERTIES hold their value even when the market slumps
Creating High-Value Real Estate by Reclaiming land from the Sea.
The Maldives Republic is a truly one-of-a-kind destination. It is also the world’s fastest growing high-end getaway. Top Maldives resorts charge more than $2,500 a night for a single bedroom villa. In fact Maldivian resorts command the world’s highest room rates and the highest ROIs. Which is why every top hospitality brand has or wants a presence here. But now the Maldives is at an inflection point. There are hardly any sanctioned islands left to develop.
As a consequence, less than 2,200 resort beds are expected to be added to the existing inventory of 28,000 beds by the end of 2023. This represents an increase of only 2.8% over 3 years. By then tourist arrivals, mainly from Asia, are expected to rise by 30% to almost 2 million. And now that the international airport’s annual capacity has been increased from 1.8 million to 7.5 million latent demand could be 2-3 times that. With demand soon exceeding supply, high-end occupancy rates could easily top 90% by 2021. And the RevPAR* for well-managed 5-star resorts, already among the world’s highest at $440 per operational bed, could pass $540. Many people are now even considering owning, leasing, or investing in a revenue-generating holiday home in the Maldives. Dhidhoo Lagoon is the only development where this is commercially possible.
Dhidhoo Lagoon will be a game-changer for Maldives tourism. It will offer a range of attractions and experiences that are impossible to incorporate into the traditional one island one resort Maldives model. Yet it will provide the highest levels of privacy and exclusivity for those visitors who want it. It will use a scarce resource more responsibly and more efficiently than any prior tourist development. It will be the first Maldives holiday destination to be run on sound sustainable principles and the first to get almost all its power needs from a renewable source. Dhidhoo Luxury Developments is also the first and only Maldives developer that is authorized to sell titled luxury properties to foreigners; and will be the only developer authorized to do so for years DHIDHOO LAGOON IS ONE OF THE LAST to come.
A simple, fairly accurate way to estimate the residual value of a new property is to compare its potential net return against similar properties in similar locations where property prices, leaseholds, and/ or rental rates are publicly advertised. Saint Barthélemy, a hurricane-prone island in the French Caribbean is the ultimate romantic getaway for America’s rich and famous. The ‘entry price’ for a top 2,000 square foot home in St Barth is $5 million, making it second only in the world to Monaco for exclusivity. A two-bedroom luxury Maison in the Cheval Blanc Saint Barthhélemy, a 5-star resort in Flamande, the most desirable location in Ste. Barth will set you back $2,000 for an ‘average’ night. That St Barth villa—not quite sitting on a beach, but having a beach view—would charge $700 a night for long stays. It would typically be occupied for 8 months in the year. The Cheval Blanc Randheli Maldives on the other hand charges $2,250 a night on average for a similar villa but with personalized services. It would typically be occupied for 11 months in the year.
Randheli’s villa costs half as much to build as the Ste, Barth villa because the ultra-high value plot on which it sits costs so little to create. Many of Dhidhoo Lagoon’s villas will operate under the imprimatur of top hospitality brands and will match or exceed the Randheli villas in design, location, construction quality, appointments, and in personalized services. Yet they will cost less to build thanks to major advances in construction technology over the past 5 years. And unlike Randheli, our villas will sit on a 99-year leasehold titled land that can be sold to foreigners. Sotheby’s believe top branded residences such as Dhidhoo’s don't just offer cachet. A top brand can add a premium of 20% or more to a property’s value. Top brands hold their value even when the market slumps. Knight Frank reported that in 2019 luxury branded residences commanded an average uplift of 30% compared with non-branded residences. Christie attributes the post-recessionary rise in the growth of the luxury real estate market to a relatively higher increase in the number of high net worth individuals (HNWIs) compared with the general population.
HVS describes the Maldives Islands as a goldmine because they have the potential to generate enormous revenue streams from tourism for decades to come. All the more reason we should cherish these magnificent islands and make every effort to preserve them. Dhidhoo Lagoon will be the proof that it can be done and done very profitably. For investors and property buyers, our promise is that the return you earn on your investment in DL will be as high as or higher than any comparable recreational development anywhere else. Yet it will be far more responsibly run than any other Maldivian resort.
Here is Why it is profitable. Dhidhoo Lagoon is very similar to Singapore’s Marina Bay in that most of the land will be created by pouring sand into the sea in a potentially very high-value location. Las Vegas Sands Corp. paid the Singapore Government $2,143 per square meter for a 50-year lease on Marina Bay. This land cost the government less than $28 per square meter all-in to reclaim. That land is now worth more than $10,000 per square meter. We estimate it would cost an amazingly low $12 per square meter to reclaim 120 hectares of land from Dhidhoo Lagoon or $36 per square meter if we include the cost of building 500 houses for the Maldives Ministry of Housing & Infrastructure. Yet because of its desirability, HVS has unofficially valued that greenfield land at $1,000 per square meter. It becomes $4,000 per square meter for the plots that are developed according to the master plan. The residual value of that land should be twice that after five operational years if we achieve the Maldives resort industry’s average ROI for high-end resorts. According to HVS a villa in a branded well-run Maldivian 5-star resort can enjoy an average daily room rate of at least $990 and an occupancy rate of at least 70%
HVS believe 5 star resorts and hotels should achieve a minimum average RevPAR of $780 six months from opening. They believe our Sell Lease Rent revenue model, wherein everything is sold, leased or rented out: the land, the residential properties, the recreational services & facilities, the offices, ships, restaurants, the marina, the public utilities and services, etc., could pay for the full development cost within three operating years: an achievement even for the Maldives where pay backs typically take eight to ten years. This is just the beginning. The SLR model is a growth machine that is scalable, predictable and repeatable. It could become a major revenue driver in the Maldives and other comparable holiday locations for years to come. As its pioneers, however, DLD will always be a step ahead of the competition.
We invite you to be part of this unique and lucrative opportunity that will let you own a piece of paradise.
Our Luxury Resort Co-Development Fund offers an equity investment with a financial opportunity to reap 20-30% IRR