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. 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.

a conference room with a large table and chairs

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.

a conference room with a large table and chairs
a room with a bar and stools
a room with a bar and stools

Transaction Overview

  • Purchase Price: R56 million (Confirmed sale agreement)

  • Loan Request: (75%) = R43,275,000  (First Position Senior Loan)

  • Equity Down Payment: (25%) = R14,425,000 (Second Position) Seller has agreed to a Subordinated Note for 25% of the equity requirement (Reduces front-loaded liquidity burden and Strengthens DSCR during the first 12–18 months)

  • Buyer will still contribute meaningful cash 
    – Cash injection on my side confirms commitment and reduces risk. SARS UPFRONT TAX: R7.5M–R8M and Bond registration costs. And Upgrade portion.

black and brown wooden table near blue padded chair
black and brown wooden table near blue padded chair

Operating & Debt Service Profile

(Pre-Upgrade)

Gross Revenue R26,000,000

Operating Expenses (45%)11,700,000

Net Operating Income (NOI)14,300,000

Annual Debt Service 7,428,000

Debt Service Coverage Ratio (DSCR)1.92× Strong

Comment:

DSCR comfortably exceeds bank minimums (1.25×), demonstrating robust repayment ability from day one without reliance on projections or upgrades.

black and brown wooden table near blue padded chair
black and brown wooden table near blue padded chair

Upgrade & Value-Add Plan

Scope: Expansion from 10-room guesthouse to 30-room boutique hotel based on approved zoning and building plans.

Construction (20 New Suites @ R15,000/m²) R10,080,000 672m² incl. circulation

Fixtures, Fittings & Equipment (FF&E) R2,500,000 (Boutique standard)

Professional Fees, Compliance & Contingency R1,500,000 Architect, QS, council & VAT

Total Upgrade Budget R15,000,000

  • Timeline:

    • Start: ±6–8 months post-acquisition

    • Duration: 6–8 months (property operational during works)

    • Funding Source: Internal capital reserves (diversified asset portfolio)

black and brown wooden table near blue padded chair

Valuation Impact Forecast

Phase / NOI (R) / Est. Value (Cap @10%) / DSCR

Year 1 – Stabilization14.3M / 143M / 1.92×

Year 2 – Construction12.0M / 120M /1.61×

Year 3 – Full Upgrade17.0M / 170M / 2.29×

Year 4 – Optimization18.0M / 180M / 2.42×

Year 5 – Revaluation18.5M / 185M / +2.49×

Valuation Uplift: ±R40–55 million within 24 months.
Owner’s Equity: increases from ±R85M (59%) to ±R110–120M (66%) post-upgrade.

black and brown wooden table near blue padded chair
black and brown wooden table near blue padded chair
black and brown wooden table near blue padded chair

Strategic Strengths

  • Low Leverage: 25% deposit = LTV 75%, ideal hospitality lending ratio.

  • High Coverage: DSCR 1.9× at inception, rising to 2.4× post-upgrade.

  • Cash Flow Continuity: Operations maintained throughout development.

  • Relationship Vision: Framework for long-term collaboration and portfolio growth (Eastern Cape & Knysna corridor).

black and brown wooden table near blue padded chair

Execution Timeline

Stage / Period / Focus

0–6 Months / Stabilize operations, strengthen liquidity, bank relationship

6–8 Months / Finalize plans, appoint contractors, regulatory clearances

8–14 Months / Phased construction (hotel remains open)

15–24 Months / Full operation, market repositioning, revaluation

black and brown wooden table near blue padded chair

Conclusion

This proposal offers bank a secure, cash flow-positive asset backed by significant borrower equity and clear long-term potential.


The conservative leverage, strong DSCR, and self-funded value enhancement position Villa Castollini as a low-risk, high-quality addition to banks commercial property portfolio.

All essential information has been consolidated into the business plan for clarity and efficiency.

Click the ‘Business Plan’ button to proceed to the next page to review the full proposal (instead of providing various attachments)

· Signed Contract

· Business plan and acquisition rationale

· Three years’ audited financials (trading history + occupancy rates)

· Renovation and/or addition costings

· My professional CV and experience background

· Details of foreign investments or similar assets previously managed

· Personal statement of assets and liabilities

· Entity/company documents in which the funding will be structured

· Confirmation of own contribution source

· Property valuation summary

photo of dining table and chairs inside room

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

photo of dining table and chairs inside room

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 SARS UPFRONT TAX: R7.5M–R8M and Bond registration costs, 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 1.9+.

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?

Yes all permits are in place - all zoning confirmations and compliance.

📌 This presentation is confidential and intended solely for evaluation by aligned banking partners.
No portion may be shared, reproduced, or acted upon independently without written permission from our Sponsor (Charl Hattingh).