Opportunity to Invest in a High-Growth Boutique Hospitality Asset
All capital participation is facilitated through our lead entity, which controls the buyer position and execution rights. We welcome aligned investors into this structure — no outside offers or repositioning can occur without our control.
Presented by:
Charl Hattingh (Sponsor)
Transforming a R60M Coastal Hospitality Asset into a 10X Revenue
Villa Castollini
Luxury Hospitality Investment – Value-Add Opportunity
Single-Asset | Institutional Refinance & Equity Tail
EXECUTIVE SUMMARY
Under contract: Villa Castollini, a 10-key guesthouse + ancillary operations
Structurally sound, but underperforming relative to intrinsic demand
Opportunity: operational optimisation + expansion to 30 keys, F&B and event monetisation
Total capital ask: R15m (R7m DSCR / R8m SARS VAT bridge)
Investor return: Refinance + 7% exit premium + 7% permanent equity stake
Location & Asset Overview
Prime location, high tourism demand
Existing 10-room guesthouse
Existing F&B: Zabella’s (temporarily closed) + bar + Sunday market + small events
Touring contracts in place
Zoning / building plans allow Boutique Hotel conversion (30 keys)
Underperformance = Opportunity
Why this is a textbook value-add
Guesthouse occupancy below potential
Zabella’s temporarily closed due to small team
F&B income limited to guesthouse operations
Bar, touring, nursery & market underdeveloped
Venue / events underutilised
Current Financials (Trailing 12 months)
Metric /Amount (ZAR)
NOI R4,224,000
Operating Expenses R4,224,000
Annual Debt Service R7,428,000
DSCR 0.54x
Investor Takeaway:
Minimal operational tweaks yield large upside
No speculative market assumptions – purely execution-driven
Value Creation Levers
Reopen Zabella’s fully (R15–20k/day)
Expand Touring groups (+R3m p.a.)
Revitalise Sunday market
Bar optimisation
Launch nursery + hanging garden tea café
Minor operational and branding capex
Hospitality Students
Expansion to 30 Keys
Current: 10 rooms
Planned: 30 boutique suites
20 Student Units
ADR: R2,500 conservative
Occupancy: 65% projected
Revenue uplift drives institutional valuation re-rating
Revenue Build-Up (Stabilised & Upside)
Revenue Stream
Base Case
Stabilised
Post-Upgrade
Guest House / Rooms
8,000,000
9,000,000
17,800,000
Zabella’s F&B
4,500,000
6,500,000
7,000,000
Touring Groups
3,000,000
3,000,000
3,000,000
Bar
1,500,000
2,000,000
3,000,000
Extra Rooms / Suites
3,600,000
3,600,000
3,600,000
Sunday Market / Venue
250,000
500,000
500,000
Nursery / Tea Garden
-
1,200,000
1,500,000
Nursery / Tea Garden
-
1,200,000
1,500,000
Total Revenue
20,850,000
25,800,000
36,400,000
NOI
4,224,000
8,300,000
14,400,000
Valuation @ 9.5% cap
58,000,000
90,000,000
152,000,000
Capital Structure & Bank Gap
Senior Bank Debt: structured after stabilisation
Short-term gap for DSCR coverage & SARS VAT bridge
Investor capital: R15m
R7m DSCR / Stabilisation Bridge
R8m SARS VAT Bridge (reimbursed in 60–90 days, recycled to upgrades)
SARS Bridge Logic
R8m bridge to cover VAT timing mismatch
Fully reimbursed in 60–90 days
Reinvested immediately into:
Room upgrades
F&B and Zabella’s reopening
Marketing acceleration
Operational liquidity buffer
Use of Funds
Use / Amount (ZAR)
DSCR / Stabilisation Escrow R5,000,000
Revenue-Enhancing Capex R2,000,000
SARS VAT Bridge R8,000,000
Total R15,000,000 ($9,167,00 USD)
Refinance Strategy
Refinance at 18–24 months
Conservative valuation: R110m
Senior debt: 60% LTV → R66m takeout
Investor capital repaid + 7% premium + accrued interest
Investor retains 7% permanent equity tail
Financial Model
Revenue Stream / Base Case / Stabilised / Post-Upgrade
NOI R4,224,000 (Base Case)
NOI 8,300,000 (Stabilised)
NOI 14,400,000 (Post-Upgrade)
Valuation @ 9.5% cap
58,000,000 (Base Case)
90,000,000 (Stabilised)
152,000,000 (Post -Upgrade)
Investor Waterfall & Returns
Metric
Amount (ZAR)
Notes
Investor Capital
15,000,000
R7m DSCR + R8m SARS bridge
Refinance Proceeds
17,250,000
Capital + 7% exit + interest
Retained Equity (7%)
7,700,000
Perpetual income + appreciation
Total Value to Investor
24,950,000
Refinance + equity tail
Equity Multiple
1.66x
18–24 month hold
Gross IRR
22–28%
Conservative stabilisation
Ongoing Cash Yield
5–7% p.a.
From retained equity
Risk Mitigation
Subordinate seller finance enhances downside protection
DSCR / Stabilisation bridge fully escrowed
SARS bridge legally secured, reimbursable
Institutional-quality real estate collateral
Refinance + equity tail reduces execution risk
Exit & Upside
Refinance at 18–24 months: primary liquidity
Optional sale post-stabilisation / boutique conversion
Perpetual equity tail provides ongoing passive income
Target NOI post-upgrade: R12–14m
Valuation post-upgrade: R120–152m
Strategic Alignment & Next Steps
Align with strategic capital partner
NDA & Data Room access
Site Visit & Detailed Capex / Cashflow Review
Term Sheet & Closing Timeline
Charl Hattingh
Born and raised in SA, combines international structuring
with deep local insight - hospitality & real estate investor in
New Zealand, Australia with active SA expansion.
Founder, Investor Liaison & Strategy Lead
Meet Your Team
We’ve identified the following key roles critical to the success of this conversion and repositioning. These will be filled by a combination of direct hires and strategic partnerships upon closing:
Founder & Principal: Charl Hattingh, driving vision and execution
Hospitality Lead: To be appointed — candidates with boutique hotel experience engaged
Financial Oversight: Shortlisting 3 reputable SA-based accounting partners
Construction PM: Industry-vetted local operator pending terms
Compliance & Legal: Consultation secured with hospitality-focused firm
Brand & Revenue Lead: In-house or agency role depending on phase
To ensure a seamless transition and sustained performance, we will retain select key staff from the current Villa Castollini team.
These team members bring valuable on-the-ground experience, supplier relationships, and hospitality know-how — providing immediate operational continuity.
Oversight and strategic direction will be led by Charl Hattingh and our leadership team, who are responsible for executing the repositioning, capital upgrades, and financial optimization.
Let’s Talk
Join Us In This Ground-Floor Growth Opportunity
Let’s schedule a 15-minute call to walk through the structure and alignment.
Only a small number of investors will participate in this phase.
FAQs
Your Questions Answered: Quick, Clear Commercial Real Estate Guidance.
Why is the asset underperforming, and is it really fixable?
Villa Castollini is structurally sound: premium location, approved zoning for 30-key boutique hotel, existing operational infrastructure.
Underperformance is purely operational: Zabella’s was closed due to a small team, touring contracts weren’t fully leveraged, F&B & market opportunities were underdeveloped.
Execution plan: Reopen Zabella’s, expand touring contracts, optimise F&B & bar, minor capex to improve rooms and amenities.
Comparable benchmarks show NOI uplift of 2–3x is realistic, and bank underwriting confirms stabilised cashflows are credible.
Its current vs intrinsic revenue potential, highlighting that the upside is operational, not speculative.
How secure is my capital? What happens if cashflows underperform?
Capital is structured in escrow / DSCR bridge to cover near-term debt obligations.
SARS VAT bridge is reimbursable in 60–90 days and recycled into operational upgrades.
Seller has subordinated finance in place — rare in SA — which enhances capital efficiency and reduces senior exposure.
Any early shortfall is fully covered by the escrowed stabilisation bridge, ensuring investor is protected until NOI stabilises.
Capital in → escrow → upgrades → refinance → repayment, showing all cash paths and safety nets.
How realistic are the revenue projections for rooms, F&B, and tours?
Guest House: R8m baseline; expansion to 30 rooms, ADR conservative at R2,500, occupancy 65%.
Zabella’s F&B: previously R4.5–6m; fully reopened and staffed, projected R6.5–7m.
Touring contracts: already secured, +R3m p.a.
Bar, Sunday Market, Nursery/Café: conservative projections based on operational benchmarks.
All projections are supported by signed contracts, market comparables, and existing bookings.
I can show historical 2024–2025 revenue performance, and highlight that 2025 already exceeds 2024, confirming trend stability and 2026 projected even better!
What if the refinance doesn’t happen as planned?
Refinance scenario is conservative, using stabilised NOI and 9.5% cap rate.
The property has multiple value drivers: operational NOI, boutique conversion rights, ancillary F&B & tours.
Even if refinance occurs at the lower end, investor capital is protected by subordinate structure + escrowed stabilisation bridge.
Bank underwriting confirms asset meets DSCR and LTV requirements once optimised.
I can prepare a sensitivity table showing IRR / equity multiples if refinance valuation is ±10–15% lower.
What is the investor’s ongoing upside after repayment? Is there real passive income?
Post-refinance, investor retains 7% permanent equity in the property.
NOI post-upgrade: R12–14m; 7% equity = R840k+ p.a. cash yield (conservative).
Property is in a prime location, with institutional-grade re-rating potential; equity tail provides long-term asymmetric upside.
Any further revenue growth (additional tours, F&B, events) flows directly to investor equity.
Projected cash-on-cash yield from equity tail alongside refinance repayment, showing blended return and IRR over hold period.
Who will operate and manage the asset post-acquisition?
Experienced operations team already identified for immediate takeover.
Key roles for F&B, touring operations, bar, and boutique hotel management are either recruited or contracted.
Owners / current management will provide transitional support during the first 30–60 days.
Execution plan includes weekly KPI tracking and monthly reporting to investor.
Are all permits, zoning, and approvals in place?
Zoning already allows 30-key boutique hotel and public restaurant operation.
Building plans for expansion already submitted and approved.
All current operations compliant with local regulations, environmental laws, and tourism licensing.
What about market / tourism risk?
Asset located in a high-demand South African coastal area with strong international and domestic tourism trends.
Touring group contracts secured: R3m/year locked in.
F&B and bar income partially independent of accommodation, reducing revenue volatility.
Expansion & boutique conversion further diversifies revenue streams (rooms, F&B, events).
Historical occupancy and revenue trends, plus signed touring contracts can be provided to show base-line cashflow stability.
What are the capex and upgrade risks?
Capex requirements are modest relative to upside: minor renovations, Zabella’s reopening, tea garden / nursery, room upgrades.
R8m SARS VAT bridge can also be recycled to cover any early cashflow needs.
All upgrades scoped with fixed-price quotes where possible.
Upside ROI calculations are conservative and do not assume aggressive market growth.
How liquid is my position after refinance?
Refinance at 18–24 months provides full repayment of capital + premium + accrued interest.
Retained 7% equity generates ongoing passive income from NOI.
Optional future sale of boutique hotel possible at 2–3x stabilised investment, giving another liquidity event.
Conservative scenario stress-tested to show investor capital is protected even if NOI is 10–15% lower than expected.
