Integrated Resort Development (IRD) is a relatively new term. Although the definitions of resort developments vary somewhat, in effect, an IRD is a residential development integrating additional elements into and around the traditional residential component.

IRD developments which cater to primary home buyers are often at an urban edge and essentially provide residents with a gated community lifestyle whilst those which cater to secondary home buyers are generally situated in tourist destinations and are often modelled on a destination resort concept rather than a gated community.

Increasingly international branded hotels are integrated in IRD developments, which often provide IRD’s with the additional value of being associated with an internationally recognised and established leisure brand. The presence of such branded hotels allows a development to benefit from the reputation of an established leisure brand and ongoing marketing efforts by international hotel management companies. The inclusion of a prestigious hotel development allows for the augmentation of the product offering of an IRD and as a result the sales prices are able to reflect this perceived added value.

IRD developments which cater predominantly to second home buyers are increasingly offering purchasers the option of entering their property in a ‘rental pool’, which provides the owner with a yield on investment; in fact certain IRD developments guarantee a rental yield for a specific period of time to entice investment buyers. Typically, owners decide during which periods of the year they will make use of their property, and, for the rest of the year the property is placed in a rental pool from which the owner receives rental revenue.

The predominant ownership schemes employed in the IRD market are freehold-, leasehold-, sectional- and fractional-title ownership, and timeshare/ vacation ownership. Through freehold title ownership, the buyer essentially purchases the land and/ or buildings and obtains legal ownership title indefinitely.

Under leasehold title ownership, the purchaser owns the land and/ or buildings for a specific period set out in the lease agreement. Sectional title ownership refers to the ownership of a section of a title and a share of associated common areas.

Fractional title ownership entails the fractionalisation of a title unit into equal parts; owners are able to occupy the residential unit for a set period of time corresponding to their ownership share. Timeshare/ vacation ownership is a scheme where buyers acquire the right to stay at an establishment for a set time period. The difference between this and with fractional ownership is that one does not gain any tangible ownership over the timeshare facility.