Finance Request Summary: Boutique Hotel Acquisition - Villa Castollini
Executive Summary We seek a strategic banking partner to support the acquisition and conversion of Villa Castollini, a luxury hospitality property in the Garden Route region, South Africa. This acquisition will involve a structured combination of senior debt and seller finance, with a proven operator and capitalized buyer at the helm. The business will be converted into a 30-room boutique hotel with multiple verified revenue streams and asset appreciation potential.
While we would welcome the opportunity to work with our existing banking partner, the buyer is simultaneously engaged with other commercial lenders who specialize in asset-backed hospitality conversions.
As such, this memo outlines the opportunity for continued engagement — but it also ensures we remain proactive in identifying the best capital partner for the next phase of this property’s development.
Transaction Overview
Purchase Price: R56 million
Loan Request: (70%) = R39.2 M (First Position Senior Loan)
Investor Down Payment: (30%) = R16.8 M (Second Position)
Buyer Equity Injection: R6,000,000 (Minimum, allocated toward boutique hotel upgrades)
Revenue Profile & Upside Potential
Existing Guesthouse Revenue: R300,000/month (10 rooms)
Venue (Zabella's) Potential: R15,000–R20,000/day (currently paused, fully licensed)
Bar Revenue: R1.5M/year
Tour Groups Contracted: R3M/year
Post-Conversion Projection: Up to 30 rooms, potential R20M/year revenue (10X uplift from current figures)
Add 10 Rooms: 15 ➝ 25 active rooms
Revenue increase: R3.94 M/year
NOI uplift: R2.36 M/year (after 40% opex)
Value creation: ≈ R23.6 M (based on 10% cap rate)
Debt Service Coverage (DSCR)
Target DSCR: 1.5 – 1.6
Debt service from diversified income streams (accommodation, venue hire, bar, events)
NOI and cash flow support interest and principal repayment post conversion
Collateral & Security
First mortgage bond over property in favor of lender
Personal guarantee from buyer
Strong capital reserve and liquidity buffer in place
Request from Banking Partner
(70%) = R39.2 M senior loan
Amortization: 15 years (with 24-month interest-only period)
Rate: Preferably prime-linked
Pre-approval subject to DD, updated valuation, and zoning confirmations
Conclusion
This is a bankable, asset-backed transaction with upside in equity, income, and regional hospitality demand. We invite you to participate as our primary lender, with strong alignment from buyer, seller, and private investors.
We will provide upon special request:
Financial Model
Property Valuation Summary
Buyer Profile & Track Record
Building Plans & Zoning Support
Letter of Intent (signed)
Confirmation of Escrow Funds
Charl Hattingh
Born and raised in SA, combines international structuring
with deep local insight - hospitality & real estate investor in
New Zealand, Australia and in U.S. - with active SA expansion.
Founder, Investor Liaison & Strategy Lead
[email protected]
+27 072 681 1150
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.
FAQs
Your Questions Answered: Quick, Clear Commercial Real Estate Guidance.
How will the bank be protected if the project fails?
The bank will be in first position on the mortgage, backed by a high-value income-producing property, and the buyer has committed personal guarantees and escrow reserves.
What happens if the renovations are delayed or go over budget?
The buyer is contributing R6M minimum upfront, with additional liquidity available. Renovations are phased and not dependent on full conversion to service the loan.
Can the property generate enough income to cover debt payments?
Yes. Current revenue streams support the interest payments, and post-upgrade projections provide strong DSCR of 1.5–1.6+.
Is this buyer credible and experienced in hospitality?
Yes. The buyer is backed by private capital, has a proven team, and is personally guaranteeing the loan. Additional investor support is in place.
Are zoning and permits in place for the boutique hotel conversion?
A 45-day due diligence window is built in to secure updated zoning confirmations and compliance.
