Paul Dean, principal of Dean & Associates, is a familiar name in the shared ownership industry having consulted widely first from offices in Chester in the UK, and since 2008 in Australia. Following the launch of the first report on the fractional industry in Australia and New Zealand (Fractional Industry Report 2010), he talks about the exciting opportunities ahead.

The fractional ownership concept has been talked about within Australia for the last two years but is only now starting to develop some traction. Resort real estate developers within Australia have historically focused upon what are termed 'strata-titled', or condominium style projects, on or close to the ocean in established seaside holiday destination areas such as the Gold Coast, the Whitsundays, or Tropical North Queensland.

In many cases however, these strata title projects have suffered in delivering the returns which Investors had expected. The story here was not too dissimilar from the condo-hotel experience in some markets within the USA over the last decade.

Few developers and most likely, even fewer mainstream real estate agents have actually understood fractional ownership and when mentioned, it usually evokes comparison to timeshare.

The main timeshare operators within Australia offer a points-based product and although fractional ownership falls within the same basic regulatory framework, the product is very, very different, typically involving the transfer of a deeded real estate interest to the buyer, where the interest then held is known as a 'tenancy in common'. This is a description of the nature of the legal interest. It does not involve any landlord and tenant relationship. It simply means that the interest passes to the owner’s next of kin or as bequeathed by will, rather than to the other co-owners through a right of survivorship.

The Sebel Harbourside Kiama

Ric King, a native of Toronto, moved to Australia some 25 years ago where he and his wife, Simone, established Lifestyle Realty Pty Ltd following a successful career in real estate in Canada. Lifestyle Realty, its affiliated companies and Ric and Simone King have been involved in some of the largest and most prestigious developments in Australia’s eastern States, including The Sebel Harbourside Kiama in NSW, Peppers Pier Resort, Hervey Bay, Sanctuary Cove Resort, Salt Village at Kingscliff NSW, and Cypress Lakes Resort, Hunter Valley Pokolbin NSW.

Lifestyle Realty was also responsible for establishing the sales and marketing operation for The Vintage, Hunter Valley Pokolbin NSW for their clients, Medalist Golf Developments & Stephens Construction.

The Vintage is a prestigious residential golf and leisure development situated in the heart of the world-famous Hunter Valley and was initially a joint venture between Medallist Golf developments (Macquarie Bank & Great White Shark Enterprises) featuring a Greg Norman designed golf course, and a hotel and spa.

In late 2008, Ric became interested in the fractional ownership concept at a time when his intuition told him that consumer preferences were changing and traditional strata title offerings did not, for a variety of reasons, offer investors the returns that they had expected, nor match the use patterns that they found necessary.

The fractional model made huge sense, especially in the aftermath of the global financial crisis and Ric set about learning as much as he could through contact with industry professionals in the United States supplemented by research via the internet.

Paul Dean, Tim Forrest and Ric King

I first met Ric in Sydney and later he, together with IT specialist Tim Forrest, an IT specialist, and with help from myself, established Australia’s first consumer focused website providing impartial and objective information for consumers relating to fractional ownership. The site, www.fractionfacts.com.au has been well received by the industry and is helping to promote the many benefits of fractional ownership within Australia and the wider Oceania region.

Ric and colleagues have now taken this initiative further with the launch of their related fractional ownership consultancy website - www.lifestylefractions.com.au - which describes the principals within the consultancy and their turnkey solutions approach to fractional and Private Residence Club (PRC) projects.

Ric anticipates being busy in the coming months as these concepts start to gain traction within Australia. His optimism is buoyed by the recent release of the Fractional Industry Report 2010 - Australia and New Zealand, commissioned by The Registry Collection here in Australia. The report contains a Fractional Real Estate Overview provided by Dr Richard Ragatz, followed by the first ever consumer research study on the fractional product carried out within the region, confirming the market for fractional offerings.

Dr Ragatz also undertook a market depth analysis where demand estimates range between 61,750 to 471,200 eligible households who might generate anywhere between AUD $9.3bn and AUD $70bn in fractional sales.

Ric King and his colleagues at Lifestyle Fractions have already secured their first Private Residence Club project at Viridian Village Resort in iconic Noosa, Queensland. The resort officially opens on August 1, 2010 and subject to completing all regulatory compliance matters, Ric will launch sales later this year. The project will be one of The Registry Collection’s first affiliates in Australia.