Under the GuestInvest concept, investors purchase their own hotel room on a 999-year lease and receive 50 per cent of the room’s income, which is let out by the hotel on their behalf throughout the year.
They benefit from any capital appreciation on re-sale and the investment offers a guaranteed minimum 6 per cent return for the first year of the hotel’s operation.
Purchasing a room through a Sipp offers investors tax relief at their marginal rate and under normal Sipp borrowing rules, they can borrow up to 50 per cent of the value of their Sipp fund to buy the hotel room.
Axa will also allow rooms to be purchased on a pooled basis of up to five investors, whether family, friends or acquaintances, opening up the growing asset class of hotel rooms to a wider market.
Axa Wealth Management head of retirement development Tony Moore says: “During recent months, we’ve received a growing number of requests from Independent Financial Advisers wanting to be able to offer their clients the ability to invest in GuestInvest. We’re very pleased to now be working with GuestInvest to offer investors the chance to enter into the hotel buy-to-let market through their SIPP, and the opportunity to diversify their investment portfolio. The GuestInvest product offers a hassle-free investment option.”
GuestInvest group sales and marketing director Anita Purvis says: “We are delighted to continue to offer investors a unique and competitive, tax friendly proposition for their pension. The buy-to-let hotel asset class is continuing to grow, and coupled with strong current and forecast occupancy rates, the London hotel market is sound and returns for investors are promising.”