Aviation News Item: 08989

26th May 2010

Source: evaint.com

"Is the future fractional?" is a report that explores the extent to which the fractional model, which involves buying a stake in an asset instead of the entire item itself, has taken root in Europe. It focuses on the impact of economic changes and the experiences of three of the leading fractional providers in Europe - business aviation provider, NetJets Europe; high-end fractional leisure asset company, The Registry Collection and 47 Park Street, a residential membership club from Marriot, as well as exclusive comment from a NetJets business customer.

Key findings include:

Large capital outlays for corporate or personal assets are less desirable than before and there is increasingly a need to demonstrate sensible stewardship of funds.

The global recession has reduced the purchase price of fractional assets. For example, the price of shares in property and jets track the underlying market value of those assets. As these have fallen, it has become even more cost-effective to enter into a fractional purchase.

There is a growing awareness of the benefits of owning an asset but without the wasted investment that comes whenever it's not in use.

Large capital outlays for corporate or personal assets are less desirable than before and this isn't going to change just because we're beginning to see the initial signs of recovery. Risk-averse individuals in this new economic era still want the benefits of the assets they might previously have owned outright but need to demonstrate sensible stewardship of funds, whether to their CFOs or to their spouses.

There exists a broader macro-economic change that is having an impact on the growth of interest in fractional: a shift in affluence and influence from the ultra-wealthy to a broader audience: the so-called "Middle-Class Millionaire".

Fractional used to be just for the elite and the price tag was very, very high in Europe - €250,000-plus to get anything in property. That's come down hugely and you can now get quality real estate ownership in good locations from €30-40,000

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