FLI enters condotel business, buys Quest Hotel Tagaytay operator
Gotianun-led developer Filinvest Land Inc. (FLI) will venture into the condotel business via a P400,000 acquisition of a Tagaytay City-based hotel operator in hopes of locking in long-term growth in the emerging sector.
In a stock exchange filing on Monday, FLI said its executive committee had approved a proposal to buy all 4,000 outstanding shares of Fora Services Inc. (Fosi) for P100 each.
Fosi, which is currently owned by Filinvest Hospitality Corp., another subsidiary of FLI’s parent conglomerate Filinvest Development Corp., manages and operates real estate projects in Tagaytay. Quest Hotel Tagaytay, a condotel, is its main hospitality project.
Condotel, a portmanteau of the words condominium and hotel, refers to a residential development that functions as a hotel. Unit owners get a share of the profit earned from renting out their properties for short-term stays. Their units are managed by the condominium developers.
According to FLI, Fosi will be its first condotel business.
“FLI can capitalize on the novelty and potential of the condotel business and position itself for long-term growth,” the company said in its disclosure, adding that it could “enhance” the quality and efficiency of Fosi’s operations.
Condotels have emerged as a key business for property developers while providing an alternative vehicle for investors looking to build recurring earnings through a rental portfolio.
Once FLI, whose main business includes development of mid-rise residential buildings, completes its acquisition of Fosi, it will join DoubleDragon Corp. and DMCI Homes, among others, in the condotel trend.
In July, the Securities and Exchange Commission issued new rules for rental pool arrangements, such as condotels.
Under the new guidelines, these offerings are considered investment contracts and, therefore, securities that need to be registered with the commission before being offered to the public.
