Investors line up to purchase hotel rooms (From Bradford Telegraph and Argus)

Bradford is first UK site for new scheme

10:40am Monday 22nd June 2009 in Search By Chris Holland

A Bradford hotel development has been chosen for the UK launch of a new scheme for investors to buy hotel rooms for income or as part of a pension plan.

Potential investors from as far afield as Slovakia are showing interest with enquiries totalling more than 40 of the 120 rooms available to buy.

The scheme has been launched by a new company called Buyhotelrooms.com to sell rooms at the £15 million hotel, office and residential development at No1 Hamm Strasse, whose first phase is under construction by Liverpool-based developers The Property Group.

Mark Bingham, managing director of Buyhotelrooms.com, said Bradford was chosen ahead of other UK cities because of its economic growth potential.

He said: “Although some people may be surprised at the choice of Bradford, we are very enthusiastic about the city as a place to invest.

“The recession may have set back some of the regeneration projects but the plans are there to create a city centre that works for business.

Bradford is also predicted to have the highest economy growth in the region with the economy expected to grow by nearly 40 per cent over the next ten years.

“When we were working on the model to devise the buy-a-hotel investment scheme, Bradford ticked all the right boxes.”

Mr Bingham said the investment scheme, which guarantees investors a return of ten per cent, had taken a year to prepare and had passed rigorous scrutiny by the Financial Services Authority. Investors will buy one or more hotel rooms at Hamm Strasse for a total cost of just less than £100,000 each, starting with a 50 per cent cash deposit, on which the ten per cent return guarantee applies until the hotel opens.

The Property Group will put up the other half of the cost and get its money back from room income. Once the purchase price is paid off, investors will earn income from their room, which they will not be allowed to use as guests.

Mr Bingham has launched a similar successful scheme in Frankfurt, Germany. The person who bought room number 1 there also wants room number 1 at Hamm Strasse and another investor is interested in buying five Bradford rooms.

Bobbie Johnson, partner in The Property Group, said the investment plan was a ‘win win’ proposition for investors, his company and for Bradford whose reputation as a centre for investment would be enhanced.

He said steelworks for the first phase of the development was now being erected, with the scheme due for completion in late 2011.

A consultant had been appointed to search for a suitable operator for the hotel, where rooms will cost about £70 a night. Several hotel companies are showing interest.

Mr Johnson said: “We are confident in Bradford’s future and that it is the right place for such a development.”