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How The Purchase Would work


Only the basic organisation is described here. Full details will be provided to serious enquirers, as described later.

Organisational structure

Structure. The Cuillin Group is organised using the offshore company of the original owner, in which new shares will be issued. Exact details of how this is done is subject to agreement with the new buyers to ensure that the final structure meets their individual requirements at the time when the syndicate is complete. Title will thus clearly be vested in a company in which the syndicate members are the sole controlling parties, in accordance with the Membership Agreement. A copy of this Agreement will be provided as part of the information package as the next stage of involvement, and covers all aspects of ownership including management methods, transfer of shares, financial matters, allocation of usage, etc. The effect of this agreement is to allow members a very high degree of control over the property, including usage at times of their own choosing, while minimising both the cost to each individual and the need to be involved in its day-to-day running.  

Usage allocation and day-to-day management will initially be handled under a renewable contract, by The OwnerGroups Company. Other than as organisers of the syndicate contracted by the original owner, The OwnerGroups Company has no relationship to any of the group members, and our continued appointment is subject to majority decision by the group members. The OwnerGroups Company does not hold any equity interest in the property. No individual member of the syndicate will have overall control of the group’s funds etc., or responsibility for routine administration. Members are required to pay their monthly share of an agreed budget, and tell the manager when they wish to use the property. The manager will allocate usage in accordance with these requests, allowing owner members total flexibility to determine when they use it. If and when two members request usage simultaneously, actual allocation will be determined by a pre-agreed priority scheme, in which each individual members’ priority varies from season to season and year to year. The OwnerGroups Company has operated such schemes for many years with other properties owner by small groups, with a very high degree of owner satisfaction.

Financial Aspects of "The Cuillin Group".

The Cuillin proposal provides outstanding value in the two key areas you will be concerned about: capital investment and continuing holiday costs. Your investment is contained almost entirely in real estate, so it is not subject to the whims of the stock markets, and can be realised either individually by selling your share, or collectively by a majority decision to sell the property itself. All continuing costs are entirely under the control of the members, and so the annual cost of ownership will be far lower than that of obtaining equivalent accommodation elsewhere.

Capital values. The price of each one-third share is based on the actual cost of setting up the group, comprising the value of the physical assets (principally Cuillin itself, of course), and the expenses involved in organising the group, such as any legal fees for issue and registration of shares in the offshore holding company, and expenses incurred in marketing and advertising the group. There is no profit factor associated with these costs, as is found with a timeshare or other commercial share organisation. Because the precise amount of some of these items will not be known in detail until after completion, an allowance has been made for them in setting the price, and any surplus amounts will be retained within the group’s accounts and used to cover future expenses. The price of a share has accordingly been set at £185,000, and other financial details will be available to serious enquirers as indicated below. It is planned to structure the group to minimise taxation and other costs to the owners: again, exact details will be provided to serious enquirers as part of the next stage of evaluation.

Current and future property values. Any search of Caribbean real estate websites may find other properties of similar quality and location, for sale at broadly the same price as the overall capitalisation of "Cuillin". While you must make your own judgment regarding value and growth prospects, The OwnerGroups Company provides a spreadsheet to enable potential members to evaluate the effects of varying rates of inflation, real growth, maintenance costs and other factors over a range of years of your choice. This is available to enable serious enquirers to make their own evaluations of potential long-term value.

Other property purchases at similar prices. For a comparison of value, prospective members can easily establish what an equivalent capital amount (£165,000) would purchase on an outright (100% ownership) basis. In general you will find it ranges from a small apartment (shared grounds and/or structure) in a reasonably well-favoured area close to the coast, to a small house perhaps in need of renovation, but far less well situated and a considerable distance from the coast. However, individual purchase of such a property would of course also require the buyer to pay the full cost of year-round ownership, probably needing to be offset by rental, which will in turn either require agency agreements and considerable loss of flexibility of usage, or a significant degree of personal effort and expense to manage rentals privately.

An additional comparison can be made by estimating the cost of building an equivalent house. The plot is about 0.75 acre (approximately 33,000 square feet). Adjacent plots are currently being sold for development at $10 US per square foot, and other typical local land prices range from $8 - $15 per square foot, so the plot itself would be worth $350k - $525k; the house is approximately 2,600 square feet including decks, and at finished building costs of about $150 per square foot, the house would cost about $400k to build. (When comparing quoted building cost estimates one should also bear in mind that few such projects come in at or under estimated cost!) It can be seen from this that Cuillin would have a “new build” cost of approximately $900,000 US. On this basis the share price of approximately $290,000 for a one-third share is eminently reasonable, bearing in mind the additional facilities and “turn-key” nature of the proposition.

Running costs. The annual cost to you as a member of the syndicate would simply be one third of the actual costs of running the property, with no added profit element. The initial budget will be based on the current owners’ historic outgoings, which obviously include all utilities, taxes, insurance, staff costs etc. There will also be a suitable amount for maintenance and storage as necessary of the vehicle, plus a reserve fund for long term major maintenance, and a fee for the group's administration and book-keeping. As a starting point it is estimated that the total budget will be about £10,000 per annum, giving an annual cost to you as a member of £3,300 (£275 monthly), for which of course you would have the use of the property for almost 18 weeks a year.

Equivalent rental occupancy. For comparison purposes, "Cuillin" has been rented over the last several years, currently at a rate of approximately £1500 per week in the high season and £1000 per week out of season. From this it can be seen that as a member, your total annual cost would be broadly equivalent to that currently paid to rent the property for about 2 weeks in high season. As a member, you have the right to 17 weeks use throughout the year. So if as an owner you actually use the property for an average of as little as 2 weeks each year in total (typically, you will use it more in some years than others), the annual cost of your holiday accommodation is less than that of renting – by a very large factor if you actually make more than minimal use. Additional facilities that are not available to renters are also part of an owner’s normal provision, raising the overall standard of convenience and luxury. For example, renters cannot to leave personal effects, clothing, sports equipment etc. in the property, which of course owners can and do, and better quality furnishings etc. can be incorporated if there is less need to consider damage by commercial renters.  And of course renters would need to make their own arrangements for car hire, etc, which would add several hundred pounds a week for equivalent usage.

Rental income. The primary objective of the Cuillin Group is not to maximise short-term rental income at the expense of owners’ personal usage, and it is not expected that the property will be made available for commercial rental. Nevertheless it would be foolish to ignore the possibility that owners may wish to consider the possibility of rental income at some time in the future. As a member of the group, you will not be allowed to rent your share in the property privately on the commercial rental market, although assigning usage to friends and relatives will be allowed. Instead, any rental of unused time will be handled centrally by the group manager, and the rental income will be distributed to members in proportion to the amount of time they have made available from their share. Thus a member who for any reason has not actually made any personal use of the property in a particular season, will receive a share of any rental income obtained for the property, while a member who has used all his available time will not. Members thus gain the benefit of any rental which does take place without needing to pay agency commissions (typically 25% or more), or become personally involved in the process.

Value estimator. We think it is quite evident that The Cuillin Group will provide outstanding value for any investor who actually wishes to spend vacation time in this part of the Caribbean. If you want to quantify this, we provide a means of comparing the relative costs and benefits of two ways to both invest your capital and enjoy that time. We have developed a financial model based on the premise that you have a capital fund available, and wish to spend a number of weeks in a given property over a number of years. The model allows you to see the effect of either investing this fund at a return you select, and using it to rent the property for the chosen time, or alternatively owning a share in it and participating in any growth. You choose all the relevant variables including inflation and tax rates, and are able to compare the value of the fund using each method, at the end of your chosen period. This model is provided as part of the Information Pack for serious enquirers.  For further details of this, and other information on how to participate in the Cuillin Group, click here to go to the Purchase Procedure page