Caribbean Property Magazine 2013 by Hiltop Publications Ltd

Contents Now’s The Time To Buy!

Acknowledgements 4

From The Editor - Clarence Hiles

Ard Na Mara: Apes Hill Club

Crane Resorts Delivering World’s Best Value in Luxury Shared Ownership

Cayman Is Bubbling: Tamara Siemens

Mixed Fortunes in St. Lucia: Ollie Gobat

The Dynamic St. Kitts Real Estate: Scott Jaynes

Positive Signs in BVI: Edward Childs

Bajan Beauty: Laura Henderson

Interior Design: A Sound Investment: Terri Archer

There’s More to Oran than Meets the Eye

A Man with Great Vision

Paul Altman - Altman Real Estate

Valuing in a Challenging Market

James Pollard - BCQS

Private Wealth Banking

Caribbean Property Magazine, is a Caribbean production published by Hiltop Publications Ltd, 11 Cottage Ridge, St George, Barbados. Tel: (246) 228-9122 Fax: (246) 228-0243 email: sportingb@caribsurf.com Distribution: Antigua, St. Kitts & Nevis, Pamela Hiles - Trinidad & Tobago, Barbados & St. Lucia Important Websites: www.caribbeanpropertymag.com www.caribbeanpropertysearch.com www.sportingbarbados.com www.barbadospropertynews.com Editor: Clarence Hiles Advertising: Pamela Hiles Design: 809 Design Editorial thanks to Paul Doyle, Cicely Lees, Edward Childs, Tamara Siemens, Ollie Gobat, Scott Jaynes, Anita Ashton, David Alleyne, Paul Altman, Simone Ward, Paul Jenkins, Clare Hiles & James Pollard. Unless stated otherwise, the other editorial is attributed to the editor. Photography Thanks to the various developments for their permission to reproduce photographic material. Copyright: Caribbean Property Magazine 2013 Volume 12. The material and editorial content in this publication was deemed correct in May 2013 when it went to print. The publisher accepts no responsibility for any change or error and recommends all readers should verify the current details direct with the advertiser and where appropriate seek professional advice. No part of this publication may be reproduced without the consent of the publisher.

Paul Jenkins - Scotia Bank 82

Know What Those Terms Mean David Alleyne - United Insurance

Spread Your Risk and Buy With A Loan

Anita Ashton - Caribbean Mortgage Services

The Economic Benefits of Music

Clare Hiles Interviews Cover Drive

Diamonds: An Investment in Love

Simone Ward - Diamonds International

Economic Citizenship Cecily Lees

COVER IMAGE 94

Ard Na Mara - Barbados Compliments of Apes Hill, Barbados

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FROM THE EDITOR

Nowâ&#x20AC;&#x2122;s the time to buy! If ever there was an ideal time to consider buying in the Caribbean then this is it!

It doesnâ&#x20AC;&#x2122;t matter where you live in the world as this region can compete with any other country on the quality of life and the things that really matter. Many people live within their own paradigm and canâ&#x20AC;&#x2122;t envisage a new beginning, but more and more are looking for something different and a better life. It may not be immediate, but the smart investors always look to the future. The University of Life is a wonderful ongoing education that most people of our generation have happily accepted or made the most of until five years ago. We have enjoyed a better quality of life, material benefits, an electronic revolution, and the opportunity to travel far beyond the imagination of our predecessors. It was a gravy train we thought would never end, but like many of the good times in life it was the height of the cycle and when the wheel started to turn downwards it gathered unprecedented momentum. Post-2008 has been a very different place and despite the optimistic predictions of better times to come, nobody has brought any certainty as to when this will happen. Indeed, quite the contrary in places like the UK where the Coalition Government struggles to come to terms with rampant costs, exploitation of the welfare state and unemployment. Businesses are closing daily and the situation has got so bad that many immigrants who came of Britain for a better life are now returning to their homeland. Others are reduced to living on government benefits. Newspapers and television exacerbate a depressing picture compounded by six months of dismal weather every year. Not everyone has the opportunity to see life outside the box, but many retirees in the past generation have relocated from Britain to Spain, France, Portugal, Florida, Eastern Europe and the Caribbean. The numbers have been increased by second home owners and to a lesser degree by speculators with surplus funds eager to cash in on escalating property values and revenue from property rentals. The second home owners and speculators virtually disappeared in the immediate post-2008 years, but the retirees were driven by different

Not everyone has the opportunity to see life outside the box, but many retirees in the past generation have relocated from Britain to Spain, France, Portugal, Florida, Eastern Europe and the Caribbean.

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objectives and have essentially remained. It is not difficult to see why as the Caribbean has not changed and its wonderful attributes of sand, sea and sunshine remain intact and are complimented by friendly people, relaxed lifestyle and more and more amenities and facilities. It is not 100% perfect, but it does offer a lot more than the drudgery of grey mornings and afternoons six months a year, declining economic times, depressing news bulletins and cash-strapped governments fighting to balance their books in the face of adversity. The vast majority of people who have moved to the Caribbean in the past two decades are people who want a better lifestyle and feel the region ticks most of the boxes. Nowhere is perfect and throughout the Caribbean small island economies grapple with the challenges of the current global economic meltdown, but the quality of life has not been eroded. Many people have had to tighten their belts and the drop in overseas property demand has hit the construction and real estate industries hard, but they have adapted and moved forward. Most of the regionâ&#x20AC;&#x2122;s economies are driven by tourism and while figures have dropped from depressed areas, the demand to holiday in the Caribbean still sits high on the Bucket-List of many international holidaymakers. And from their midst a small number love the lifestyle and ambience so much that they will eventually decide to relocate either second home or full-time.

Property prices have dropped in the light of reduced demand post 2008, but their quality and location has not changed so bargains are readily available all over the region.

A quality lifestyle in a tropical paradise will always be the Caribbeanâ&#x20AC;&#x2122;s biggest attraction and local governments have recognized our prize asset and made it easy to purchase. Property prices have dropped in the light of reduced demand post-2008, but their quality and location has not changed so bargains are readily available all over the region. Overall the Caribbean has held its own in tough times, but the same cannot be said for other popular second home locations in Europe and United States where property prices have slumped and re-sales are at an all-time low. Lenders in the Caribbean are still willing to offer attractive mortgage packages to suitable clients so the circumstances have never been better to purchase. The big challenge is to look outside the box and plan for the future. If you want a better lifestyle in your later years or a better environment for your family to enjoy then a Caribbean home should be considered. We hope the contents of our 2013 edition will stimulate your interest.

Clarence Hiles Editor 6

Ard Na Mara ‘Ard Na Mara’, the Gaelic interpretation of ‘Sea View’, is the latest luxury villa to be created by the Apes Hill Club Project Management Team. This latest gem at the prestigious Apes Hill Club was completed in twelve months and under budget, a habit that the Project Management Team are keen to foster, priding themselves on close collaboration with the client and a hands-on approach to design and construction, the Team at Apes Hill Club are pleased to have another happy customer;

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“Before we embarked on this project in 2011 we were inclined to buy a completed house rather than purchase land and build. We were nervous of building as we had no experience of such matters, Barbados is a long way away and everyone has nightmare stories about builders. Using the Apes Hill Club Project Management service made the process straightforward and enjoyable. Looking back now we are so glad that we were able to specify our own house rather than inherit someone else’s old house.” Owners, ‘Ard Na Mara’, Moonshine Ridge ‘Ard Na Mara’ enjoys a private elevated position within the exclusive Moonshine Ridge community and is a professionally designed fully furnished four bedroom, 5 bathroom luxury villa sitting on close to an acre of tropically landscaped grounds. The property has been positioned to take advantage of the cooling breezes at Apes Hill Club and the panoramic views of the West Coast of Barbados and the Caribbean Sea whilst also offering views to the magnificent Apes Hill Club Golf Course. The quality of workmanship and attention to detail make this a truly special property. This stunning property is currently list for sale at US$6,5 Million. "We are happy to have chosen the Project Management Service for the construction of our new home at Apes Hill. Donovan Bagwell and his team have been highly professional and very much responsive to our needs in a timely manner. We would have no hesitation in recommending their services to future homeowners." Owners, Terra Nova, Moonshine Ridge The suite of services at Apes Hill Club does not stop at design and construction, as the Property Management Team provide Landscape, Property and Swimming Pool Maintenance, as well as Housekeeping Services to ‘Ard Na Mara’. The convenience of these services is not lost on our owners at Apes Hill Club.

"We are happy to have chosen the Project Management Service for the construction of our new home at Apes Hill. Donovan Bagwell and his team have been highly professional...”

“In the summer of 2012 we purchased a new built property situated within the Apes Hill Club gated development and decided to engage the Apes Hill Club Property Management Service to manage all aspects of the property. We have found the Management and Staff to be delightful, helpful and efficient. They resolve issues with outside bodies, such as Customs, Light & Power and suppliers, thus providing the complete service and removing all the stress for offshore owners. The grounds of Apes Hill Club are well maintained and all the staff, even those not directly involved with our property are always polite and helpful. We could not be happier with the services provided and the options available, all provided at reasonable cost. We have the advantage of being able to compare Apes Hill Club Property Management with others providing the same services and can say without hesitation that Apes Hill leave the others standing in the range of services officered, the quality of those services and not least cost. Having now stayed in our new home on two occasions, the latter being for 3 months, we can say that Apes Hill Club Property Management and their staff give us peace of mind that our investment is in good hands and that allows us to enjoy the property and Barbados.” Owners, ‘Linger Longer’, Holders Meadow.

We have the advantage of being able to compare Apes Hill Club Property Management with others providing the same services and can say without hesitation that Apes Hill leave the others standing in the range of services officered...

Crane Resorts Delivering "World's Best" Value in Luxury Shared Ownership

"Price is what you pay; value is what you get." This definition by Warren Buffet certainly resonates with buyers looking at vacation real estate on the luxury end of the shared ownership market. As the industry has matured, these buyers now have a multitude of options to investigate resorts in almost every country, residences of every size and style, exchange clubs, points programmes, rental programmes, resale programmes, and more making the complete value proposition, not just price, the deciding factor in where to invest.

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Crane Resorts' value proposition begins at the point of sale with low fixed prices, which, the company asserts, represent "the world’s best value in luxury shared ownership." They are certainly very proud of their pricing and make it easy for buyers to compare with any shared ownership resort, anywhere in the world. They have a "no-pressure" sales process, provide their best price upfront and fully respect the buyer's right to think it over. In terms of the physical product, Crane Resorts provides buyers with great value in world-class locations, residences and amenities.

Crane Resorts' value proposition begins at the point of sale with low fixed prices, which, the company asserts, represent "the world’s best value in luxury shared ownership."

The first of their two properties, The Crane Residential Resort, covers 40 cliff-top acres which encompass a half mile of ocean frontage on the southeast coast of the island, with magnificent views and one of the most beautiful beaches in the world. Crane Beach’s pink powder-soft sand led Lifestyles of the Rich and Famous to name it “one of the ten best beaches in the world.” The Crane stays true to its history and heritage with architecture and furniture inspired by the original 1887 hotel, with coral stone walls, four-

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poster mahogany beds, 10-18 feet high timber tray ceilings and marble bathrooms with luxurious whirlpool tubs and spa showers. The Crane’s residences are grand in scale, ranging from 800 to over 4,000 square feet. Many feature large private swimming pools and tropical gardens. The Crane’s five restaurants include two award-winning fine dining establishments, L’Azure (Mediterranean/Caribbean cuisine) and ZEN (rated #1 for food in Barbados by Zagat for its authentic Japanese/Thai menu). Crane's world-class amenities include five outdoor pools, a fullservice spa, floodlit tennis courts and a glass-fronted elevator to Crane Beach.

Each two- and threebedroom residence will sit on approximately 6,000 square feet of land and will enjoy approximately 70 feet of unobstructed ocean views.

In Crane Village, modelled after a 19th century Barbadian town, guests enjoy al fresco dining, a café, a well-stocked convenience store, duty-free shopping, a lively piano bar, a 3,000 square foot state-of-the-art fitness centre and multi-purpose conference facilities. The new resort, Beach Houses, sits on the 1% of coast line that remains outside of Barbados’ East Coast National Park. Spread across a gently sloping 50 acre hillside overlooking Skeete’s Bay Beach and Culpepper Island, Beach Houses enjoys 180 degrees of spectacular ocean views from anywhere on the property. Beach Houses is designed to be respectful of its proximity to the East Coast National Park. It is a secluded, high privacy, low density, environmentally responsible development which, when finished, will feature only 61 free standing “beach houses” and a small boutique hotel. Each two- and threebedroom residence will sit on approximately 6,000 square feet of land and will enjoy approximately 70 feet of unobstructed ocean views. All residences will include a separate studio accommodation which may be used or “locked off” by the user according to his/her needs. Each residence will feature floor to ceiling glass windows for spectacular ocean views; two infinity edge private pools with hot tubs, one 37 feet wide and the other 19 feet wide (one for the main residence and the other for the “lock off” studio); 100% private patios; outdoor showers, hammocks and BBQ grills; and built-in owners' storage.

Crane Resorts has also eliminated the very expensive sales and marketing practices favoured by the shared ownership industry. Most importantly, these savings are passed on to buyers by way of low fixed prices.

Beach Houses will offer the same level of luxury amenities for which The Crane has become famous, including two exciting restaurants, a bar, a stunning spa located in a five-acre ocean front nature preserve and a modern wellness centre - all featuring stunning panoramic ocean views. In terms of the product features not related to the "bricks and mortar", buyers can also expect to receive great value from resort services. The Crane has had over a century to perfect its services and offers all the luxuries expected by todayâ&#x20AC;&#x2122;s most discerning travellers, such as concierge services, room service from the restaurants, full daily housekeeping, and free Wi-Fi and VoIP long distance calls. By offering these services and more, The Crane was awarded Four Diamonds by AAA (given to the top 4.2% of 31,000 resorts worldwide). A key feature that delivers enormous value in shared ownership is an exchange programme, and Crane Resorts offers the ultimate in flexibility. In addition to the right to enjoy a specific residence at the same time each year, Crane Resortsâ&#x20AC;&#x2122; owners are also able to easily exchange to any type of Crane accommodation for any period throughout the year or even use

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multiple residences at the same time, if required. Owners can also enjoy vacations in any of 4,500 RCI® Points resorts worldwide, or in 200 of the world’s most exclusive and luxurious fractional properties through The Registry Collection®. In terms of value on the financial side, Crane Resorts delivers in the upfront price and in the ongoing costs. The company has been able to dramatically reduce development costs by designing and constructing all residences and amenities in-house. Crane Resorts has also eliminated the very expensive sales and marketing practices favoured by the shared ownership industry. Most importantly, these savings are passed on to buyers by way of low fixed prices. For example, ownership in perpetuity of a fully furnished and equipped luxury two-bedroom two-bathroom residence with its own private garden, swimming pool and dining gazebo starts from US$13,895 for a week. For buyers who are motivated primarily by the international vacations facilitated through a points-based exchange programme, US$10,000 purchases ownership in perpetuity of 2,000 Crane Vacation Points more than adequate to enjoy one week's accommodation every January in a three-bedroom residence in a RCI® Points golf resort in the Bahamas. The annual fee charged to owners by Crane Resorts is approximately half or less than other luxury shared ownership resorts in the region and is comparable to ordinary timeshare apartments that feature minimal amenities and services. The company is able to achieve these savings through full vertical integration and an obsession for value in everything it does. Crane bypasses expensive third party suppliers, and is responsible for all aspects of resort operations including security, laundry, landscaping and appliance and TV repairs. For owners who purchase more than they can use immediately, Crane Resorts delivers value by offering the option to participate in the rental pool programme. This allows owners to receive a share of the resort's rental income for the weeks they do not use. The success of the rental pool is demonstrated by the fact that Crane Resorts was able to report a profit for all participating owners. Rental profits were realised even during times of extensive ongoing construction and economic instability. The company was able to achieve this by driving higher revenues, increasing the quantity and value of room rentals, lowering expenses through achieving cost efficiencies, and sharing the profits fairly between owners and the management company. Crane Resorts also offers unprecedented value to buyers interested in whole ownership: the amenities and services of a five-star resort; turnkey services that cover everything (including property taxes, all utilities, VoIP, WiFi, interior maintenance, daily maid service and replacement of furniture, fixtures and utensils); unrivalled vacation exchange opportunities in Barbados and throughout the world; and a rental pool that pays for all fees and makes a net profit for every week an owner does not use his/her residence. Whole owners enjoy discounts on shared ownership pricing, and because of Crane Resorts’ shared ownership legal structure; they are also able to enjoy even greater capital gains, flexibility and liquidity with the option of reselling all or some of their interest in fractions or by the week.

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In fact, many owners start as whole owners and profitably sell a week or two each year, covering their lifestyle expenses in retirement. In the absence of shared ownership legislation in Barbados, Crane Resorts has adopted the UK regulatory framework for shared owner protection. Crane Resortsâ&#x20AC;&#x2122; shared ownership is in perpetuity and is protected by a third party trust structure. This means that a Crane Resorts ownership interest can be willed, transferred, or sold at anytime, easily, quickly and at minimal cost.

To learn more, visit www.craneresorts.com, email: property@thecrane.com or call (246) 423-6220. The Sales Office at The Crane Residential Resort conducts tours daily from 9:00am to 4:00pm.

Crane Resorts' value proposition does not end until an owner wanting to sell his/her shared ownership interest is able to profitably do so. As of February 2013, the 94 owners who resold their shared ownership interest through the Crane Resorts resale program have, on average, earned a small profit after all fees and commissions (with 64% of these sales occurring after December 1st, 2007, the beginning of the recession). Most importantly, this profit was in addition to the enjoyment of years of luxury vacations at a tiny fraction of what they would have paid as nonowners the real reason they purchased shared ownership in the first place. The real value delivered through Crane Resorts' resale programme is easily quantifiable, and is a testament to the enduring value of the product. This truly sets Crane Resorts apart from all others in the shared ownership industry.

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Cayman Is Bubbling According to ReMax Realtor Tamara Siemens It has been another tough year for real estate across the Caribbean region yet Cayman appears to have done better than most locations. What lies behind this success? Cayman is not your typical Caribbean destination. It is just an hourâ&#x20AC;&#x2122;s flight from the Florida mainland and is easily accessible. It has a solid reputation for offshore business and continues to attract a variety of new business. These businesses bring more visitors and new buyers. For example, there are new medical facilities being introduced and a healthy number of overseas workers are involved in their construction. When the medical facilities are complete they will attract a large number of visitors needing specialist treatment. The tax incentives will always attract high net worth individuals and corporate entities, as Cayman is a sophisticated commercial location. In addition, it is safe and has a wide range of property options to suit most budgets. Give us an overview of property in Cayman and what sells best.

The best returns come from long-term rentals, but this poses a problem if the owner wants to use their property for a holiday.

Much depends on the budget. Beachfront locations demand the best prices and there are many beautiful seafront properties that will appeal to the high net worth buyer. Detached properties dominate the US$1 million plus market, while condos sell best below that figure. Cayman also has some beautiful canals, which offer excellent waterfront locations and sell well. Many second homebuyers can get good value in the US$500,000 price range, and even a $150 000 apartment can give a good return to an investor Where do your buyers come from and are there any changing trends? The majority of buyers come from United States, Canada and the UK. Our close proximity to North America is the obvious reason for attracting buyers from there, but in recent times we have experienced more interest from the UK where potential buyers are looking for a better tax environment and of course, better weather. Has commercial property been as successful as domestic property and is there a big influx from offshore companies? Although the commercial market has been relatively quiet in recent times, there have been some major overseas purchases this year have boosted the market. There is also unused commercial space in key areas that could be re-zoned and used for both retail and domestic use. This could revitalize some commercial areas in Georgetown and make better use of prime space.

Are commercial rental packages part of the attraction that brings offshore business to Cayman? Perhaps not Offshore Companies, but offshore investors. Managed Funds and investors buy property to rent and get good returns from commercial tenants, as rents in Cayman are generally high in comparison to other locations. Most Offshore Companies rent so demand is consistent. Do second homeowners get a good return on their investment? Much depends on what the second homeowner is looking for. The best returns come from long-term rentals, but this poses a problem if the owner wants to use their property for a holiday. You canâ&#x20AC;&#x2122;t get the best of both worlds so you have to make a priority decision and stick with it. Returns of 6-10% are typical for a long-term rental while shortterm rentals are seasonal, depend on availability.

Tamara Siemens, an award winning realtor in the Cayman Islands, who has enjoyed a successful eight years executive sales career with REMAX, Caymanâ&#x20AC;&#x2122;s premier realtor. Tamara provides a polished level of assistance to both purchasers and sellers of luxury property. She can be reached at 345-926-3430 email:Tamara. Siemens@remax.ky You can also visit the website on www.mycaymanrealtor.com

What are the most popular types of property purchased by nonresidents and in what price range? Condos dominate the Cayman market and numerically represent over 75% of sales. The most popular sector is the price range US$150,000 to US$750,000. Mortgages are also available up to 8095% Loan-to-Value depending on amount. Are there any restrictions on non-residents buying in Cayman? There are no restrictions, but buyers are subject to Stamp Duty of 7.5% of the purchase price. There are no other taxes associated with buying and selling property. Are there any particular developments or properties that you feel are excellent buys in 2013? Any property is a great investment at the moment as the market has certainly recovered, or is recovering and we have passed the lowest point. It is an excellent time to buy, as prices are firming up, and we should start showing some growth again.

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Mixed Fortunes in St. Lucia Like most Caribbean islands St. Lucia has lost some of its glitz in recent times, but local realtor Ollie Gobat highlights mixed fortunes on the island... Ollie Gobat is an experienced St Lucia realtor who specializes in resort management, resort development and property sales. He has strong UK links and has been involved in sales to overseas buyers for over a decade. He is a part owner of the impressive Cap Maison Resort and manages the equally impressive Landings Resort and is a keen sportsman. Ollie can be contacted at (758) 452 0422 or by email at ogobat@thelandingsst lucia.com

In general terms real estate sales in the Caribbean region have significantly dropped in the past few years. Has St Lucia experienced any different? St Lucia has not been any different, and like many other locations the real estate market slowed down after the strong years from 2003-2008 when the world was engulfed by the global financial crisis â&#x20AC;&#x201C; banks stopped lending, people stopped spending on overseas property and generally took less investment risks. However, some lifestyle buyers with cash to spend and a philosophy that you only live once continued to buy property and where better to spend time than this beautiful island? That said we seem to have lost the overseas investor building a property portfolio and looking for a 6% plus return. However, we are still getting interest and trades. We understand some major development plans have been put on hold and there are rumours of existing developments going into receivership. Is this true and has it affected investor confidence in the St Lucia market? The last few years have been a period of survival and consolidation for resorts and resort development all over the world. Building a new resort would not have been a very sound idea, so understandably many developments plans have been put on hold. Inevitably there have been casualties and some receivership, but amidst the global economic mayhem this should not come as a big surprise. On a positive note the Freedom Bay development on the south of the island is scheduled to begin later this year subject to final planning approval. Jalousie is now called Sugar Beach and has continued to develop, and there are several developers currently looking at opportunities. These examples would indicate that confidence in the St Lucia market has not been too badly affected, but we have to recognize that overseas confidence throughout the region has been affected by events in the bigger countries and the knock-on impact in the Caribbean.

Cap Maison is another. It does not charge its owners condo dues, maintenance fees, or utilities so there are literally no costs after purchase.

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Why are some developments experiencing success against the trend?

The Landings has come through a period of consolidation and is now operating as a successful resort with homeowners seeing some major improvements

The developments that are well funded and in great locations have done well. Sugar Beach has continued its development at a majestic location and it is now a stunning resort operated by Viceroy. The business model is sound as both the buyers and the developer have funded the development and this has ensured a consistent cash flow to complete the job. The commitment to make it an outstanding resort has been resolute and success has followed. The Landings has come through a period of consolidation and is now operating as a successful resort with homeowners seeing some major improvements. Lifestyle buyers are still buying properties because the product is good and the resort is being managed successfully. Any development that is running a successful operation has bucked the trend somewhat, and Sugar Beach and the Landings are two good examples. Cap Maison is another. It does not charge its owners condo dues, maintenance fees, or utilities so there are literally no costs after purchase. In addition, the owners have also been paid a dividend each year so this resort continues to be a success against the trend. We also see land being sold and individual houses being built. There has also been development of commercial property in the north of the island, so St Lucia is not stagnant by any means. Is anything happening to stimulate real estate sales? There is only a certain amount that can be done to stimulate sales as the island is greatly affected by events in the economies of our traditional visitors and investors. St Lucia remains a stunningly beautiful island, which combines lush scenery and rainforests with gorgeous coves and beaches, a mix that is as dramatic as any island in the Caribbean. The St Lucian people are warm and welcoming, so the combination of the two remains our biggest asset and will appeal to many overseas investors. However, the performance of the economies in Europe, Canada and United States will largely determine the number of second home investors and retirees who purchase. Some other islands have stimulated their real estate market by introducing citizenship schemes whereby an owner gets a passport if they buy a property of a certain value and fulfil the other requirements of the scheme. This is something the St Lucian government is looking at, although it is at a very preliminary stage. Invest St Lucia is the organization that helps generate inward investment, and is assisting with various incentives for new developments and inward investment. St Lucia remains as beautiful as ever, but overseas investor confidence is still a big challenge. How do you see the future? Confidence in overseas investment is not St Lucia specific, and you could argue that the softening of the market is not even a confidence issue. I think times and priorities have significantly changed as the reality of how overextended our target market economies had become. It is hard to see a quick return to what it was like a few short years ago, and realistically we will not see such buying activity in the medium term. I see the near future as continued consolidation of our tourist industry and existing developments. I also see the commencement of

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one new development, which is a mixture of fractional and outright ownership. This is a trend that may become common throughout the region. Fractional ownership increases the market size and reduces individual exposure, but at the same time creates a similar lifestyle or investment opportunity. There are also two other potential developments which given their prime location, could work. Developers must be wary of being undercapitalized as relying too heavily on quick sales is potential suicide. This business model wonâ&#x20AC;&#x2122;t work in the current climate. As the US economy recovers, hopefully followed by the UK economy, sales will pick up again. St Lucia has not lost any of its appeal, and the airlift remains solid so things will get better again. Predicting exactly when is very difficult. Are their great deals in the real estate market at present? Yes, it is very much a buyerâ&#x20AC;&#x2122;s market. There is great value in land all over the island and it can be purchased as individual lots, or larger plots for development. There are some spectacular properties for sale at greatly reduced prices from their original release, and condos and apartments on offer far below what they were going for five years ago. Now is a great time to pick up high quality property. We have seen better sales this winter than last year, so the deals are being snapped up and I donâ&#x20AC;&#x2122;t feel there will be as many next year.

There is great value in land all over the island and it can be purchased as individual lots, or larger plots for development. There are some spectacular properties for sale at greatly reduced prices

Where do you see your overseas investors coming from in the future? St Lucia airlift is still strongest out of the United Kingdom, United States and Canada, so these areas will remain our key markets, along with our regional market. We would love to open up to South America to the Caribbean as it has so much potential, and of course, if any citizenship scheme is introduced that would create another potential market. You have had a long involvement with the visionary Landings Development. How has it been doing in the face of these changed circumstances? The Landings was fortunate in that enough property was sold before the recession so it had a very solid Homeowners Association in place and was already operating as a successful resort, complete with all the amenities to enjoy a luxurious Caribbean lifestyle. The resort side is now doing well. It has 141 completed apartments, three pools, tennis courts, restaurants, bars, beach club, spa, and gym, all beautifully finished at one of the most idyllic beach locations in the region. Unfortunately the Development Company went into receivership, but the resort is a separate entity and thriving with happy guests and owners. The opportunity remains for a new developer to complete the project as originally planned, but currently owners and guests are happy the way things have emerged and we have also seen a few resales go through which is always a good sign. It is a beautiful resort and one of the best marina developments in the Caribbean.

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The Dynamic in St. Kitts Real Estate What is the current state of the St Kitts property market? There are a wide range of properties available (sizes and price ranges) but no greater number of properties than over the past few years. Interest from offshore investors has increased in 2013. I believe 2013 will be a better year, with regard to property sales, than 2012. Is it much the same in Nevis? Yes. The curtailing of flights to St. Kitts and Nevis (all Caribbean islands for that matter) by American Eagle has affected Nevis more than St. Kitts. In order to travel to Nevis one now is dependent upon Liat or by flying one of the large carriers to St. Kitts then taking a ferry or water taxi over to Nevis. Is St Kitts a little Caribbean haven that few people have discovered?

Developer Scott Jaynes highlights the dynamic in St. Kitts real estateâ&#x20AC;Ś

Yes, but the number of new visitors (not counting cruise ship passengers) to the island is increasing on an annual basis. St. Kitts has remained a "hidden gem" primarily because government was focused on the sugar cane industry until just a few years ago when sugar production was abandoned in favour of tourism. Now that jet airlift to the island has increased (American Airlines, US Air, Delta, and British Airways) more and more visitors are arriving, staying at least a week, and falling in love with the island. There were great plans for the development of the Southern Peninsula. How has this progressed? Unfortunately, development of the St. Kitts Southeast Peninsula is still slow. New commercial and residential developments have been announced but activity at those sites is minimal or non-existent. The worldwide economy seems to be rebounding but it is slow to trickle down to the islands. The Southeast Peninsula still has huge potential.

St. Kitts has remained a "hidden gem" primarily because government was focused on the sugar cane industry until just a few years ago when sugar production was abandoned in favour of tourism.

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You are a developer at the high end of the property ladder. How has your market been affected by global meltdown in recent years? Prospective investors have held on to their money waiting to see what will happen worldwide. We at The Estates on Sundance Ridge have spoken to a number of prospective buyers over the past several years with little to show for it. The good news is our product is top-drawer quality and our site is spectacular and cannot be equalled on-island. Neither of those factors will change so we remain a great investment to those who can appreciate the long-term value. You fell in love with St Kitts and moved your home over a decade ago. How has the island changed in your time?

The citizenship program has brought millions of dollars to the islands of St. Kitts and Nevis but it is hard to say if it will have any real long-term benefit to the people who live here.

A great number of homes and villas have been completed over the last ten years. Many new developments have been constructed during that time (and some are still underway). Other new developments have been announced and have not broken ground to date. Property values have increased but are still way below that of neighbouring islands (namely St. Martin and Antigua). With increased airlift and the heightened awareness of our island by tourists from around the globe property values will naturally increase as more and more visitors recognize the charm of this small island and its people. To those who invest soon the property appreciation will be significant. The Economic Citizenship program is a controversial facility across the region. Has St Kitts benefitted from it? That is a hard one. St. Kitts and Nevis has had many developments jump out of the ground to satisfy the "citizenship urge" but I would guess only 10% of those buyers (my opinion only) have any interest in holding their property for more than the five-year requirement of the program. The

Economic Citizenship program has not helped Sundance Ridge as we are a "lifestyle" purchase rather than a "citizenship" purchase (our Buyers qualify for application to the Citizenship Program but few come to us for that specific need). The citizenship program has brought millions of dollars to the islands of St. Kitts and Nevis but it is hard to say if it will have any real long-term benefit to the people who live here. Where do you see potential real estate buyers coming from in the future? Citizenship buyers come from the world over for a myriad of reasons. True real estate investors will come from the US, UK, France, and Canada. Airlift is key to continued growth. Once a vacationer has visited St. Kitts I'm sure he/she starts thinking about coming more often and possibly owning property themselves. As I've said before, St. Kitts and Nevis are "hidden gems" and once a visitor comes to either island the "wheels just start turning". If you are familiar with either St. Kitts or Nevis you love them! Either one becomes part of you very quickly.

By his own admission former American realtor Scott Jaynes and his wife Connie fell in love with St. Kitts the first time they visited the island and very soon after made it their home. They are the driving force behind the stunning hilltop Sundance Ridge Development in St. Kitts and take an active part in many community activities. Scott can be contacted by email at swjaynes@yahoo.com

CARIBBEAN PROPERTY MAGAZINE

Positive Signs in BVI Edward Childs give an overview of life amongst the rich and famous... For Sale - Sugar Mill Hotel, Tortola

While the BVI is not as suited as some islands in the Caribbean to agriculture, the off shore fishing grounds have been identified as a possible source of revenue.

With the 2012/13 high season over, now is a good time to reflect on the state of the market. Across the Caribbean, real estate agents have reported a greater volume of interest from prospective purchasers and, more importantly, increased interest from the North American market. This trend has also been evident in the BVI where a busier high season for agents has boosted confidence that the market may be turning. The past twelve months have been mixed for the BVI. The continued economic downturn in Europe has led to continued pressures on the offshore financial centres to conform to tax treaties. With a domestic budget that depends on income generated through the financial sector, the BVI Government remains keen to preserve the lucrative company formations market while looking to diversify into new products. Shipping and aircraft registrations are both areas identified for possible expansion. In 2013, attacks on the financial centres have continued and damaging leaks of proprietary information from trust companies to the international press have focused attention once again on the question of taxation in Europe and the ability of individuals and companies to reduce their tax exposure through the use of off-shore companies, particularly for property acquisitions. The BVI Government has continued to search for ways to raise revenues locally and also to open up new markets. With one of the twin pillars of the economy under pressure (the other being tourism), the Government is keen to identify an alternative area of business that can complement both the financial industry and tourism. While the BVI is not as suited as some islands in the Caribbean to agriculture, the off shore fishing grounds have been identified as a possible source of revenue. The BVI Government is also looking at long-term infrastructure projects, most notable of which is the extension of the existing runway at Beef Island airport to allow direct flights to the Eastern Seaboard of the United States. With American Eagle ceasing

...the need to control airlift to the BVI is seen as a priority for the expansion of tourism in the BVI. The plans for the expansion are well advanced and bids have been received from three international companies for the airport expansion.

flights from Puerto Rico to the BVI in March 2013, the need to control airlift to the BVI is seen as a priority for the expansion of tourism in the BVI. The plans for the expansion are well advanced and bids have been received from three international companies for the airport expansion. In the private sector, the North Sound area of Virgin Gorda continues to flourish with on-going development at Oil Nut Bay, Mosquito Island and Necker Island, where the replacement for the main residence which was burnt down in the summer of 2011 is close to being completed. Oil Nut Bay recently opened The Cliffs, three one-bedroom luxury suites perched dramatically above the Caribbean Sea. With much of the infrastructure now finished, this luxury resort is now looking forward to the 2013/14 season with the completion of the central facilities behind the beach club. Land sales at Oil Nut Bay have continued at a good pace over the past twelve months, including the sale of one 28 acre serviced site for $25M. The YCCS Marina has just finished hosting some major regattas including the Loro Piana Caribbean Superyacht Regatta, which was held in March and attracted twenty sailing super yachts. This marina, located at the heart of North Sound, has opened up a new market to the BVI through the super yacht regattas. Construction on Mosquito Island gathered pace in 2012 with construction of the central areas now under way and expected to be completed by May 2014. The first sites on the island have been sold, but with only a very limited number of sites available, there are not many opportunities to become a part of this exclusive island development. Elsewhere in the BVI, Nanny Cay Resort and Marina is completing the final phase of its successful condominium development. Construction is also underway on new commercial buildings to improve the services offered to the Nanny Cay community. The owners are also finalizing the plans for a large expansion to the marina, which will increase the number of available berths by 100 slips and open up more land for further residential development.

BVI Home Price Index The historical sales data for the sale of villas over $500,000 in the BVI between 2003 and 2012 provides a stark picture of the impact of the recession on villa sales in the BVI with three years of reduced sales between 2009 and 2012. Although the number of villa sales in 2012 declined, the total value of sales transactions increased from $11.5M in 2011 to $16M in 2012. The median sale value also increased, from $615,000 to $950,000 over the same period. This was due to the closing of two villas at $4.5M and $5.0M respectively during 2012. The graph showing the categorization by sale price indicates that the market for property below $1.0M saw a substantial reduction in sales in 2012 with only five sales recorded against twelve in 2011 and sixteen in 2010. There were also only two sales in the $1.0M - $3.0M category, which was slightly down on prior years. However, there were two sales in the $3.0M+ category, which was the first time sales in this category, had been recorded since 2008. There are now around 270 properties actively being marketed in the BVI above $500,000. While total annual sales remain low, this is a large inventory that will need to be sold before the market can correct itself. What is not evident from the above graphs is the change in the market over the past twelve months on Virgin Gorda, primarily due to development activity in the North Sound area. While historically the markets on Tortola and Virgin Gorda have been very different, we are now seeing a marked contrast between the two islands in terms of pricing achieved and the response of sellers to the market in terms of reducing asking prices. We have analyzed sales on both islands since 2010 in the $1.0M+ price category and compared the difference between the initial asking price and eventual sale price for each property sold. This analysis is summarized in the table on the following page.

CARIBBEAN PROPERTY MAGAZINE

TABLE SHOWING THE COMPARISON OF ASKING PRICES TO SALES PRICES IN SELECTED VILLAS ON VIRGIN GORDA AND TORTOLA IN THE US$1.0M+ PRICE CATEGORY Island

Number of Sales *

Average Asking Price PSF

Average Sale Price PSF

Tortola **

$850

$613

-28%

Virgin Gorda

$1,127

$878

-22%

33%

43%

Difference * Includes properties in contract ** Includes one Scrub Island sale

The table shows that vendors on Tortola lowered prices by an average of 28% to achieve a sale compared to 22% on Virgin Gorda, although the statistics for Virgin Gorda are somewhat skewed by one sale where there was a 67% difference between the asking price and the eventual sale price. The average sale price in Virgin Gorda is now over 40% higher than the prices being achieved on Tortola.

On Tortola, villa owners have started to lower prices and of twelve listings analysed, eight have reduced their asking prices by an average of 18%.

We have also looked at current listings of villas over $2.0M on the two islands and compared asking prices for these properties to a year ago. On Tortola, villa owners have started to lower prices and of twelve listings analysed, eight have reduced their asking prices by an average of 18%. Of seventeen listings on Virgin Gorda, only seven have reduced their asking price albeit by an average of 22%. With the requirement of overseas investors to obtain a land holding license from the Government, it can take a number of months for sales to close. Therefore, any progress in the market seen over the 2012/13 high season may not be reflected in Land Registry records until 2014. While the agents may be reporting a general improvement in the market, it will still take a while for this to be reflected in the statistics. In previous years, the cyclical nature of the economy has resulted in the gains that have been felt in North American and European economies in the winter months (Q4 and Q1) being reversed during the summer months (Q2 and Q3) when economic conditions have deteriorated. However, with the American economy gathering pace, and the fiscal cliff being at least temporarily avoided, there remains hope that confidence in the economy will remain positive during the summer of 2013, indicating that a sustained recovery may finally be here. Edward Childs graduated from Newcastle University in 1985 before undertaking a postgraduate diploma in Land Economy at Aberdeen University. Following three years of post graduation in London, Edward became a member of the Royal Institution of Chartered Surveyors in 1990. Edward joined Smiths Gore in 1990 having trained with Savills in London in commercial property surveying. He established the commercial department at Smiths Gore and was instrumental in expanding the firmâ&#x20AC;&#x2122;s presence in the Caribbean region. In commercial property, Edward has specialized in resort and marina operations, undertaking valuations and sales throughout the Caribbean. Over the past ten years, he has also been involved in a range of development consultancy positions, guiding clients through the development process including environmental, planning and governmental issues. He can be contacted at tel: 284 494 2446 or by email: edward@smithsgore.com

...including six spectacular penthouse suites and three deluxe penthouse suites enjoy a secluded waterfront setting fringed by tropical greenery, exotically scented gardens and shady terraces.

CARIBBEAN PROPERTY MAGAZINE

Bajan Beauty One of the island’s newest five-star resort additions on the Barbados Riviera, Laura Henderson samples a taste of the des-res high life at St. Peters Bay Tour Barbados and the island’s real-estate heritage stands proud from every seascape and hilltop balcony – from the bijou chattel houses and pastel coloured stilt cottages once transported from one plantation to another, to the rambling Colonial estates dressed in styles that span Palladian Regency to neo-Gothic. One niche residential sector that encapsulates the island’s well-mined bricks and mortar evolution more than most however, is that of resort living, with landmark development St Peters Bay a quality benchmark to emulate. Nestling on 4 acres of prime west coast beachfront, the resort ticks all the essential ‘castaway living’ boxes – a pristine frontline location, clear blue waters and a refined collection of leisure amenities. What particularly appeals is the small-scale, boutique feel of the development: just fifty-seven luxury homes, including six spectacular penthouse suites and three deluxe penthouse suites enjoy a secluded waterfront setting fringed by tropical greenery, exotically scented gardens and shady terraces. Just a short barefoot schlepp from my villa and I can dip my toes in the glistening freeform pool which borders the beach. Scooting up to nearby bustling Speightstown for a spot of al fresco lunch is a breeze – a quick tilt of the sun hat to crewman Reco and the resort’s private water taxi is ready and waiting to whisk me away. In fact decompressing guests into prescribed holiday mode is a finely-honed skill at St Peters Bay, with an attentive in-house concierge service to cater to your every whim from securing ‘best table’ bookings at the top restaurants to planning day trips to the island’s key note attractions, arranging in-residence dining and even scheduling water-sports, golf and sailing activities. Residences epitomise refined comfort. Meticulously designed and stylishly appointed, my stunning home-from-home for the duration of my stay was a super-sized three-bedroom penthouse: 2,700 square feet of fan-cooled, louvre-windowed living space comprising a spacious, elegant master suite, bespoke design bathroom with rain shower and freestanding bath, two additional en-suite bedrooms, a state-of-the-art galley kitchen and the ultimate indulgence - an outsize gallery terrace complete with spa pool; the perfect spot for an early morning dip.

CARIBBEAN PROPERTY MAGAZINE

St Peters Bay – The Facts Property prices at St Peters Bay start from $1.95m for a threebedroom residence rising to upwards of $7.75m for a deluxe, four-bed penthouse with roof deck, pool and kitchen. On-site management include a full gym and yoga studio, hair and nail salon, concierge, and beachside gazebo bar serving light lunches. A water taxi service with access to the nearby yacht club is also available. In addition to the above portfolio of services, owners have the opportunity to purchase a berth at the recently launched luxury marina development of Port Ferdinand. 52

Interior décor palettes complement the resort’s traditional Caribbean design with authentic detailing - sconces and picture windows – walls in coral rock with much of the woodwork ‘pickled’ pine, a whitewash that gives a pleasant and light effect, while pastel drapes complete the muted, restorative theme. Deluxe penthouses don’t skimp on luxury trimmings either. Boasting 6,330 square feet of space, interiors comprise a spectacular master suite with large walk through dressing area and bathroom, three additional en-suite bedrooms, a terrace bar and private roof deck with full-size pool, and a state-of-the art media room and home office. The litmus test of any successful development is engendering that special feeling of having left the world behind. In the case of St Peters Bay it’s the buzz on the beach by day, a stunning property within earshot of the waves, and above all, a place to unwind and, where the staff are only too happy to take the strain, so you can just kick back. That, in a nutshell is St Peters Bay. It’s the ultimate dose of luxe island flair. Laura Henderson is editor of UK luxury property magazine Abode2 – www.abode2.com

CARIBBEAN PROPERTY MAGAZINE

INTERIOR DESIGN:

Optimizing Your Investment Whether you are purchasing a home for your personal use and enjoyment or the property is to serve as an investment and is expected to cover its costs or provide a return, the use of a professional interior design team is of paramount importance. Taking this approach will enable you to create a space that functions well in practicality and aesthetics. This not only makes for a sound investment in the present, but also creates a competitive advantage for the future potential of a resale. First impressions are crucial in today's extremely competitive market when selling a property in the Caribbean. By appealing to the emotional side of a buyer you can reach far beyond the sales pitch and financial spreadsheets. As a leading Caribbean interior design company with over a decade of experience, Archerâ&#x20AC;&#x2122;s Hall Design Centre has witnessed the dramatic difference in the rate at which properties have sold once they possess well designed interiors and quality furnishings compared to their unfurnished counterparts. Buyers have repeatedly expressed that viewing a well-appointed, furnished property takes a large unknown factor out of the picture and enables them to see exactly what they will be purchasing. It is often very challenging for potential buyers to visualize their dream home or to see the advantages of a space as compared to other properties being considered for purchase if they are unfurnished. This allows them to identify with the lifestyle and atmosphere they will be purchasing up front and the furnished home leaves nothing to the imagination ultimately captivating the potential buyer. Another very important consideration when trying to determine if show homes should be furnished is that once a turnkey package is included, the potential buyer is in a position to begin to have the use of their investment immediately upon concluding the transaction to purchase. This has proven to be equally important for persons buying and wishing to be able to enjoy a holiday in Barbados in their new home or renting the property if it is being purchased with that consideration in mind. The entire process of designing, ordering, shipping and furnishing a home can take a minimum of four months, which may mean a buyer could miss an entire winter season before being able to use or rent their property.

...we have witnessed a dramatic difference in the properties that have sold successfully with a well designed interior and furnishings compared to the unfurnished properties.

CARIBBEAN PROPERTY MAGAZINE

The team at Archer’s Hall Design Centre takes great pride in ensuring that once contracted as the interior design company on a job, deadlines are met and budgets are adhered to.

Additionally, there is also the fact that many buyers find the experience of outfitting a new home oneself to be a daunting experience. This already tricky process is made more complex by the fact that they are unfamiliar with Caribbean and the logistics involved in navigating all that goes with purchasing and shipping items. Many islands carry a variety of import duties, while shipping and logistics can be strategically challenging. Archer’s Hall Design Centre offers the benefit that a buyer can establish a budget based on their knowledge and experience and end up staying within their allotted amount to outfit their space. They also navigate the many intricacies involved in purchasing, consolidation, international shipping, brokerage, customs, duties and other regulations and related matters. Archer’s Hall believes firmly that it is important to outline the overall scope of works at the beginning of a project and establish a budget and time frame to completion as this allows a client comfort of knowing beforehand what they can expect. Quality is also of the utmost importance to them as they recognize that by providing well-made items with good design, their clients will receive an added benefit and not have to refurbish for many years to come. It is this peace of mind that allows clients to hand over the responsibility when they leave the islands and wish to return with everything done, every detail taken care of and arrive with simply a suitcase in hand. The team at Archer’s Hall Design Centre takes great pride in ensuring that once contracted as the interior design company on a job, deadlines are met and budgets are adhered to. They have focused on building lasting relationships with local developers and their individual clients have in several cases engaged them repeatedly in respect to subsequent purchases. They place great emphasis and work diligently to ensure that every project receives the attention it warrants and to ensure delivery on time and within the budget.

www.archershall.com Tel: (246) 422 0400 email:info@archershall.com

It is for the many reasons outlined above that it will prove extremely beneficial to either the developer or individual property owner to engage the services of a professional interior design company and therefore maximize their return on their investments and also ensure a seamless process in achieving the furnishing of their property.

CARIBBEAN PROPERTY MAGAZINE

There’s more to Oran than meets the Eye Having been in the window business for almost 50 years, Oran Ltd recognizes that a window is more than just a pane of glass to fill an opening. Rather, windows and doors are a major aesthetic feature of your home or building that when used functionally can provide practical returns on your investment and enhance your living experience. At Oran Ltd. we believe that there is a solution to every problem and a design for every customer. We design our products in the Caribbean and for the Caribbean with the confidence to know that they can stand up to the environmental demands of our climate and the discerning taste of our consumers. Therefore we are confident that our experienced sales staff can guide you through the choices, and help you arrive at a solution that right for you.

...UPVC cuts down on heat transmission more than aluminum without the aid of a thermal block, both materials are fairly comparable in the context of the Caribbean environment.

Currently there is a diverse range of products with added value options that are designed for different applications available on the market. With all these choices at hand and a limited budget, consumers face the challenge of finding the right product to fit their budget. Consumers should consider two important criteria: performance and aesthetics. Does the product or combination of products protect my home adequately? And do these products bring out the beauty of my home? In today’s market for windows and doors there has been a lot of attention given to the advantages of UPVC and aluminum. While both materials have different properties, for example UPVC cuts down on heat transmission more than aluminum without the aid of a thermal block, both materials are fairly comparable in the context of the Caribbean environment. UPVC has been labeled the preferred material for coastal products; however, aluminum itself does not rust from exposure to salt spray. In reality it comes down to the consumer’s preference. Both products have different appearances and are available with different options. At Oran Ltd. we offer a wide range of UPVC and aluminum products to meet the needs and specifications of all customers. For consumers focused on maximizing their homes resilience to hurricanes and high winds, we recommend products that have had

CARIBBEAN PROPERTY MAGAZINE

their designs certified by Miami-Dade and Broward counties for large missile impact. Products like the RoyalGuard ™ Impact Line from Oran Ltd. and MaestroShield® Roller Shutters are backed up by the certification and engineering to protect your home against flying debris from high winds. In addition to these options for certified hurricane products, Oran Ltd. offers laminated glass, consisting of two pieces of glass surround by a poly-vinyl butyl interlayer, in various thicknesses in all of its products, providing varying degrees of protection from debris and water penetration. Windows can also be fitted with coverings, such as louvre shutters, simultaneously providing protection as well as an aesthetic appeal. In addition to protection against destructive weather, windows can also mitigate the negative features of an environment. Insulated glass, otherwise known as double glazed glass, can be used to block sound transmission, creating a quiet and peaceful environment in your home. Insulated glass can also be used to cut down on heat transmission, keeping your home cooler when using air conditioning and cutting down on cooling costs. Similarly, glass tints add to the look of a home while reducing UV and solar heat transmission, which can warm your home and damage finishes. Special coatings, for example Low emissivity coatings, can also be added to glass to improve the performance glass in cases where sunlight is direct and intense. These value adding performance features can add a unique and tasteful design to complement your home. Both aluminium and UPVC windows offer customizable options for a number of frame colours to blend in with your home’s décor. Aluminium frames are powder coated providing a long lasting durable finish, while UPVC frames are in fact ‘painted’ using a proprietary staining system, called RoyalBondtm, which is accompanied by a 20 year warrantee. Glass tints can also be used to accompany frame colours, and when used with customized muntin designs will add a unique look to your home.

Double hung windows have been a bench mark design of traditional plantation houses for decades, because they maximize airflow by allowing hot air to escape through the upper open vent.

When combined with different styles of windows these value adding options make you windows unique; however, it is the window or door itself, which is the main feature. Each style of product has its appeal. Double hung windows have been a bench mark design of traditional plantation houses for decades, because they maximize airflow by allowing hot air to escape through the upper open vent. Meanwhile casement windows provide an unobstructed view when open and maximize ventilation. When combined with vanishing pull down insect screens, flying pests are no longer a disadvantage of this particular window style. Similarly, sliding and bi-folding doors can be used to capitalize on both airflow and aesthetics opening your home to the beauty of the outside world, whether it is a manicured garden or picturesque view of the ocean. In addition, window coverings, such as louvre shutters or the high end louvretec operable shutters can also add a sophisticated and sleek look to modern designed homes, and can be combined with various window and door products offering innovative solutions to the toughest design choices. Whether you are building a home, re-designing a room, or simply replacing a window, Oran Ltd’s experienced and knowledgeable sales team is ready to assist you in choosing the product that adds the most value to your project.

Caribbean Property Magazine

Business & Finance A Man with Great Vision: Paul Altman

Valuing in a Challenging Market

PAUL ALTMAN

JAMES POLLARD

pg 72

pg 76

Private Wealth Banking

Know What those Terms Mean

PAUL JENKINS

DAVID ALLEYNE

pg 80

pg 84

Spread your Risk and Buy with a Loan

The economic Benefits of Music

ANITA ASHTON

CLARE HILES

pg 88

pg 90

Diamonds: An Investment in Love

Economic Citizenship

SIMONE WARD

pg 96

pg 94

CECILY LEES

Business

A man with great vision PAUL ALTMAN You are an institution in the Caribbean real estate industry. What keeps you motivated in these challenging times? We have worked very hard over the past 35 years to build an industry that did not exist, in a formal way, previously. We always saw Barbados as the “strength location” among our Caribbean neighbours and our involvement throughout the Caribbean has been one of nurturing – planting seeds and ideas – in order to present a spread of opportunities to investors, aimed at everyone’s benefit. That keeps me motivated. I am a very positive person and, if I can continue to motivate others, then I remain motivated. Are you positive about Caribbean real estate in the next few years or do you see major challenges for some islands? We all have our challenges in the Caribbean. My view is that we have the ability to “buck the world economic trend”. Let me explain: we live in one of the world’s most beautiful places – the Caribbean; one that is sheltered in peace, with great energy among its people. Our University has and continues to develop clear-thinking, clever minds. We must break through the mindset that we are caught in a global crisis. There are pockets of continued strong growth among the general decline, where clever leadership has prevailed. It is not business as usual. The world has changed and we must change. Without a paradigm shift in our own way of thinking we will continue to “go with the flow”. Why not build an island or start the Pierhead project? Give tourism what it really needs. Sometimes overall changes send big messages:

...we live in one of the world’s most beautiful places – the Caribbean; one that is sheltered in peace, with great energy among its people.

• • •

•

• •

Build one overpass. Build the jet ways. Start drawing plans for a monorail to follow the Constitution River (the old riverbed now under beautification) and thus reduce traffic congestion in the city. Guide new development (redevelopment) over the next 20 years in our towns – Bridgetown, Oistins, Holetown, Speightstown – and all the waterfront locations, which have immense redevelopment potential. Take advantage of our World Heritage designation. Pass really meaningful legislation which makes it so attractive for investment that businesses can’t fail to notice or take

Business

advantage of it. It can be done by using one investor as an example that works – unhindered, no hurdles, fast track. If the challenges facing investment were minimized and, even further, guided into an easy experience, there would be a huge inflow of new development. The word needs to get out that we can make it comfortable for development to happen! We will benefit if this shift in mindset occurs. It cannot happen if we continue to operate in the normal way. We have to scream out in order to achieve this paradigm shift. Do you feel the industry needs to change to be more competitive? For example, is it realistic to expect sales commission of 5% from a seller in a highly competitive market? Would Finder¹s fees be a positive step forward? Absolutely. The industry needs to change – to become more competitive. It has already changed. There are so many new companies and the individuals in the business. All it takes is a payment of BDS$750 to the Registry Office and anyone can sell property officially – not to mention the hundreds who do it “silently”. Which other professions offer this ease of access? For those of us with larger companies - which employ a number of people, have significant marketing budgets, international affiliations, and work hard to bring business to Barbados - it is extremely costly to operate. Everyone benefits and the smaller companies, who do not have overheads, can afford to charge reduced fees. The larger companies must reduce fees in order to become competitive. We accept that finders’ fees are an alternative and, although not prevalent, have reason to become more prevalent. What do you see as ³Best Buys² in 2013 and why? The best buys in 2013 have to be re-sales versus new build. There are a large number of properties listed for sale which have been built and owned over the past 20 years, some over 15, 10, 5 or less. Owners who want to or need to sell can factor in value of personal use, rental income, and inflation. They can afford to accept less than new build. That is why a number of projects are stalled. This has a negative effect on our economy (the construction industry, employment etc). There are an abundance of “for sale” signs all over the island. This gives the impression that the island is for sale and works against all of our better interests... but who will remove their signs first? We are in a buyers’ market like never before – not to mention the banks, which have repossessed properties and are starting to enter the equation. You have been heavily involved in the visionary Limegrove Retail Complex in Barbados-how successful has it been to date and are there plans to expand and develop? Limegrove is there as a reality for all to enjoy. There is no doubt that it has made a difference to Barbados as a destination. What excites me most is the fact that so many Barbadians, who first saw it as only for visitors, have warmed up to the enjoyment of liming at Limegrove. Limegrove has something for everyone – food, fashion, film, art and much more. It has turned out more even more spectacularly then I had envisioned, and there is a lot more to come! Burberry and Hugo Boss will open soon. New food and entertainment options and lots of events – there will be a full calendar of events! We are now focused on our residential component so that the theme “Live, Work, Play” is fully on board.

Business

The second home market has made a huge contribution to the economies of several islands across the region, but over the past four years it has slumped. What can be done to stimulate sales and foreign investment? The second home market has indeed become a main player in our tourism accommodation. It is more than accommodation - it represents a vested commitment in our economy. People who buy vacation homes spend foreign exchange, create significant employment and are ambassadors for Barbados. They pay land tax, spend fortunes on maintaining their investments (supporting a major service industry), spend on other local services, rent and purchase cars, eat in restaurants, buy in our retail establishments etc. This arm of foreign investment can easily be tuned to the engine of our tourism plant. We should also highlight their philanthropic contributions - they feel committed to improve the quality of life on this island and give millions of dollars annually to help in almost every area of development and need. Once this is recognized, then it is up to our tourism sector to highlight this contribution and help to build it into a much stronger economic contributor. Maybe World Travel Market in London and ITB in Berlin could highlight the villa component. A tourism survey is currently updating statistics on the villa sector. This will help to demonstrate its importance.

Limegrove is there as a reality for all to enjoy. There is no doubt that it has made a difference to Barbados as a destination. What excites me most is the fact that so many Barbadians, who first saw it as only for visitors, have warmed up to the enjoyment of liming at Limegrove.

What has kept Altman real Estate at the forefront of the industry over the past two decades? Altman Real Estate has diversified. Our main lines of business are still real estate sales, rentals and management. However our partner business - Property Consultancy Services â&#x20AC;&#x201C; provides professional services to the industry - including valuations, reports and project management - while focusing on our significant involvement in the Fortress property Fund as partners and investment advisors. We not only act as Principals, but we also get directly involved. We have helped to shape the industry over the past three decades (plus) and are proud of our continued contribution. Do you see yourself continuing in your current role or have you other challenges on the horizon? I have no intention of leaving my position. It is my work and my enjoyment. It keeps me focused each day and, as long as I feel I can make a contribution to this industry and to Barbados, I will continue. I am, at the same time surrounding myself with some of the brightest minds -who help to inspire me. That speaks well to the future of Altman Real Estate and to our industry.

Paul Altman has been involved in the real estate profession for over thirty years. He is the Managing Director of Altman Real Estate. He has been at the forefront of developments in the luxury residential market: he was among those instrumental in the establishment of the Royal Westmoreland golf residential community; led the development of the highly successful Sugar Hill Resort; and helped to set the tone for resort communities in Barbados on a whole. He is at the helm of the development of the Limegrove Lifestyle Centre, Barbadosâ&#x20AC;&#x2122; first mixed-use centre. Mr. Altman is involved in urban renewal programs in Speightstown, Holetown and Bridgetown. He is a Past President of the Barbados National Trust and led the development of two museums, which are both linked to the Trust, the Nidhe Israel Museum in Bridgetown and Arlington Museum in Speightstown. Currently, he serves as Chairman of the Masonic Lodge Restoration and Preservation Trust.

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Valuing in a Challenging Market James Pollard of BCQS highlights why a comprehensive understanding of current economic conditions together with local and sector property knowledge are essential to produce accurate valuations in todayâ&#x20AC;&#x2122;s challenging market. The global financial crisis has had a major impact and has brought a new set of challenges to the Barbados property market. This article explores how falling transactional evidence and reductions in the availability of finance is impacting on the ever evolving field of valuation. What is Market Value? The definition of Market Value is founded on the principle that valuers are estimating the contract price that a willing buyer and seller would agree in an armâ&#x20AC;&#x2122;s length transaction on the open market. Valuation techniques are therefore used to ascertain the price at which a property would sell for at a particular moment in time. Market value differentiates from Investment Value or Worth, which represents the value of a property to a particular investor, or class of investors, for identified investment objectives, which may not necessarily be representative of the market as a whole. Transactions Market Across all property sectors, values have declined from their peak in 2007, as a consequence of diminishing purchaser demand. The decrease in earnings and increase in bad debt provisions has cautioned lenders. This is reducing the availability of debt funding, which in turn is reducing transactional activity in the market. Capitalisation rates have softened from the levels reached during the boom. Not only has there been limited purchaser demand, but owners, who have seen values reduce over this period of time, have been reluctant to bring assets to the market. Debt remains the greatest challenge in the market. From the mortgage providersâ&#x20AC;&#x2122; perspective, constraints on credit supply means that the levels of finance at their disposal have been dramatically reduced. Mortgage providers, having adopted a more conservative approach to their lending practices, now have stricter criteria governing when they are prepared to lend. Whilst previously many loans were based solely on relying on loanto-value ratios, there is now a greater reliance on location, the product type, management and the ability of the borrower to service debt.

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The Barbados property market is currently in an uncertain phase with a lack of finance and a declining number of potential buyers.

Challenges to the Valuer The Barbados property market is currently in an uncertain phase with a lack of finance and a declining number of potential buyers. This is reducing the number of transactions and consequently the volume of market data available is currently limited. This lack of data is making an assessment of current market conditions more challenging. Confidence in the Barbados property market has weakened. In the midst of this uncertainty, it is important to emphasise that this is likely to be the first down phase of the property cycle that many owners will have experienced in Barbados. This has, perhaps, intensified market nervousness, and along with the change in the financial landscape, has added to the uncertainty of existing owners as well as prospective purchasers. Prospective purchasers are requiring greater reassurance and it follows that their confidence in the market needs to be restored. To undertake valuations it is critical that the valuer has an in depth knowledge of the local market and a comprehensive understanding of the specific characteristics that drive the value of property. This will involve assessing the transactional evidence of similar properties and having knowledge of the investment characteristics related to the property which are likely to impact on value. It must also be appreciated that depreciated replacement cost plus the value of land is not necessarily indicative of market value and caution should be exercised in using this approach in isolation. In the commercial sector, it is becoming increasingly challenging to assess value, given the risks associated with current economic conditions. At the

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James Pollard is a Senior Valuation Surveyor at BCQS International in their Barbados Office. He can be contacted by telephone at (246) 428 8091 or by email at jpollard@bcqs.com

height of the market, purchasers were basing bids on aggressive appraisals, assuming ever increasing rental levels without fully accounting for potential risks such as tenant default or longer void periods. It is, therefore, crucial that the valuer analyses market conditions to assess the returns that purchasers require at any given time. This will be dictated by a number of factors, including the availability of funding, the risk profile associated with a particular asset, and its location. So, during a deteriorating market, it is essential that the valuer has a full understanding of the likely purchasers in the market and the likely returns that they require. Knowledge is Key In conclusion, it is essential that valuers have an in depth knowledge of the local property sector as a whole. It is also critical that valuers comprehend current market conditions and trends, as well as the returns required by purchasers in the commercial market. Maintaining a thorough understanding of all the key factors that dictate value in this current climate will assist the valuer in producing accurate valuations in such challenging markets.

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Private Wealth Banking Not many people outside the banking world know what Private Wealth Department is all about. Can you give us a brief overview of what is on offer to customers? Private Wealth Management discreetly assists affluent clients build, preserve and transfer their wealth. At Scotiabank, we create customized Wealth Management solutions that incorporate Investment Advice and Management, Wealth Structuring and Trust services and Private Banking. For example, as a private banking client, you will benefit from our personal, attentive and professional service with an emphasis on anticipating and addressing all your banking needs quickly, accurately, and efficiently.

Scotiabank’s Paul Jenkins answers some key questions...

Working with a team of credit specialists, your Private Banking Relationship Manager can facilitate borrowing needs, and provide tailored lending solutions that meet the demands of your individual family objectives. Covering everything from your day-to-day banking needs to the most complex investment, trust and insurance strategies, our solutions are integrated into a customized package that will effectively meet your local and international wealth management needs, all in exclusive facilities that respect your need for privacy. When you partner with a dedicated private banker or investment advisor, the result is a seamless experience that saves you time: •

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Simplify borrowing by combining a portfolio of your assets held in different locations as collateral for a single investment line of credit Increase borrowing power by incorporating investment industry margin loans Offer access to global investments and research in markets outside the region. Provide a dedicated relationship manager that assists in discreet day to day banking. Enjoy quick, hands-on management of time-sensitive transactions in coordination with your other trusted service providers. Obtain help handling bill payments or other tasks made difficult due to travel or work schedules Offer wealth-structuring services that provide families with customized solutions addressing transfer of wealth from generation to generation.

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How do prospective customers come to your table? Our clients tend to arrive at our private offices discreetly and usually through referrals from satisfied existing clients. We pride ourselves in privacy of referral along with excellence in discreet/personalized customer service. You specifically operate in the Investment Section. What are your main areas of expertise? My expertise is in wealth management; specifically fixed income securities. Bonds, or fixed income securities, tend to have less risk than equities and usually are core components of institutional accounts. However my commitment is to a partnership with the client that will allow us to engineer sound personalized international investment solutions that are inclusive of both bonds, stocks and other regulated investments.

However my commitment is to a partnership with the client that will allow us to engineer sound personalized international investment solutions that are inclusive of both bonds, stocks and other regulated investments.

My goal is to deliver objective advice and long-term returns for a portfolio that minimizes oneâ&#x20AC;&#x2122;s exposure to risk. My team of support and service can fully support the development of a portfolio by providing you with leading international products and services, including timely market strategies and portfolio reviews. Clients benefit from the integrated team of experts and our partners across Scotiabank. It is usually best to start with a full understanding of a clientâ&#x20AC;&#x2122;s financial situation. Working through a strict advisory process we review and analyze client needs and goals and create a personalized investment portfolio based on those goals, time horizon, risk tolerance. We also focus on aspects of international portfolio construction that may have implications that pertain to asset allocation, geographic diversification differing currency exposure. Through our Scotiabank partners, we have access to investment solutions, research, and tools from around the world to incorporate the most appropriate investments for your needs. Our office offers the following types of investments: Fixed Income - International Investment Advisory has access to the long-standing expertise of Scotia Capital in fixed income, and we have the knowledge and capacity to build a fixed-income portfolio tailored to your unique investment goals. Equities - The equity group at Scotia Capital provides us with trading and advisory services for a full range of equities as well as preferred shares, income trusts and options. In addition we have access to Futures and Commodities trading. Investment Funds - We have access to a breadth of investment funds, including mutual funds, specialized funds and hedge funds. We analyze each fund statistically as well as looking at its portfolio management process, style and discipline, mandate, and inherent risks.

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Alternative Products - Through our partners we are able to offer alternative investments that meet the more sophisticated needs of your investment strategy. Research and Tools - We use industry-leading research and tools to create the investment portfolio that is right for you and your investment goals. Can the bank offer better services than traditional investment brokers or fund managers? Banking and investment products tend to be very similar. We feel what differentiates Scotiabank from the competition is our customer service, attention to detail and the desire to offer excellence.

Paul Michael Jenkins is responsible for international investment advice within the Scotia Private Client Group (Scotia Capital) in the Eastern Caribbean. He is based in Barbados. Mr. Jenkins has worked with institutional and private clients in Canada and the Caribbean for over 11 years. With a background in industrial-organizational psychology, he holds an Honours Degree from The University of Western Ontario, and an MBA specialising in finance from Manchester Business School in the UK.

As a bank we offer extensive services across the region and have the support of external financial services experts. We have a physical presence in Barbados that can facilitate complicated financial transactions. I like to say to clients ‘What you can do in London, Toronto, New York or Singapore, you can do right here in Barbados”. I’m sure all Scotiabank staff say the same in their respective locations. What mortgage facilities do you offer? Our private banking team can assist in customized lending to clients in the region. Types of borrowing tend to be individual loans, lines of credit and mortgages. One of our popular debt structures tends to be US dollar non-resident mortgages. These mortgages assist global clients whom may wish to borrow funds to purchase a second home in the Caribbean. In some instances these clients do not need to borrow, but choose to do so because it assists in their tax savings strategy. The banking dynamic doesn't sit still in the modern world. What is happening at Scotiabank Private Wealth to move with the times? You are correct. Today’s clients want more integrated solutions and accountability. We find clients are more involved in all processes and they have an understanding and are respectful of increased compliance demands. At Scotiabank we do our best to engage our clients in efficient, transparent and collaborative solutions. We offer dedicated relationship managers, on line access to view portfolios and accounts. We understand that relationships can be stronger with accountability trust and intelligent service. The financial world certainly does move quickly, and we feel we safely and intelligently move our clients along with it.

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Know what those terms mean There are a few insurance terms every homeowner should know Whether you live in the Caribbean 365 days a year or spend 3 weeks a year in a home you own in the Caribbean, there are a few terms you need to understand when it comes to making sure your home is protected. At United Insurance, we want to be sure that you are not disadvantaged by not having enough insurance to protect your beautiful home. We believe you shouldn’t wait until you experience a loss to wonder what those technical insurance clauses in your policy mean or even if your insurance is adequate.

David Alleyne, Chief Operating Officer United Insurance

So we’ve explained a few insurance terms every homeowner should fully understand and get comfortable with. An appreciation of these fundamental components of insurance covers is essential in making sure that you have adequate protection for those treasured possessions. SUM INSURED Your ‘sum insured’ or “limit of indemnity” is the value/limit of insurance you have under your policy. If your sum insured is $100,000, it means that you’re insured for a value of up to $100,000. When determining your sum insured, there are 2 options to be considered as you attempt to secure adequate coverage for your property - Indemnity or Reinstatement. These are explained below: INDEMNITY Indemnity or to be indemnified is the process of putting you back in the exact position you were in prior to a loss. An indemnification therefore is a protection, security or compensation for damage or loss sustained which, in respect of a household insurance policy, takes into consideration “wear and tear” or depreciation. On this basis of insurance, your sum insured therefore should represent no less than that amount that reflects the current value of the assets you own. What it also means is that any settlement is limited to the sum insured you have chosen and no more. While you can’t claim for more than what your property is worth, you can be confident that at United Insurance, we do our best to ensure compensation for insured items is fair and as close to what you have lost as possible; subject to the adequacy of your sum insured.

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REINSTATEMENT Reinstatement is the cost of replacing or rebuilding a property which has been lost or destroyed. If your home is destroyed by an insured peril such as fire and you seek to rebuild, you will be given the funds of equal value to what it costs to replace your home, as long as you have insured it for 100% of its replacement cost. But, do not expect to receive funds to build a 6bedroom mansion, if you are replacing a 3-bedroom bungalow.

It is very important for you as a property owner to continually update your policy to be sure that your insurance coverage is consistent with your reinstatement/ replacement value.

You can even use the compensation received for a property which has been lost or destroyed, to rebuild elsewhere. Isnâ&#x20AC;&#x2122;t that great? It is very important for you as a property owner to continually update your policy to be sure that your insurance coverage is consistent with your reinstatement/replacement value. If, under your insurance policy, your home or business is insured at a substantially lower value than the cost it would take to rebuild it (i.e. your reinstatement cost), or you decide not to rebuild, your settlement will revert to indemnity (or settlement based on wear and tear or depreciation). In other words, it would be as if you had not in the first instance insured the property for replacement, but instead it was insured for what it is currently worth (indemnity) and thus, the settlement would be on that basis. Unitedâ&#x20AC;&#x2122;s Uniplan 2000+ Homeownerâ&#x20AC;&#x2122;s policy automatically offers reinstatement, but as explained above, the sum insured must be substantially correct. It is important to fully understand the fundamental difference between these two options as they can have a significant impact on settlement and on the ability of a homeowner to be adequately compensated for loss.

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David Alleyne is the Chief Operating Officer of United Insurance and also sits on the Board of Directors of the company. In his role as COO, David is responsible for running the day-to-day operations of United. Prior to his appointment to the Board of Directors and as General Manager in 2008, David was the Overseas Manager, responsible for United’s 13 territories within the region (excluding Barbados), for over 18 years. David is a Chartered Insurer being an Associate of the Chartered Insurance Institute (ACII) of the United Kingdom and an Associate in Reinsurance (ARe) of the Insurance Institute of America. He also holds an MBA from the University of Durham. His service to the industry includes sitting on the Executive Committee of the Insurance Institute of Barbados, lecturing under the Barbados Diploma of Insurance programme (BDI) and serving as a Director of The insurance Association of the Caribbean (IAC). David can be contacted at 246-430-1900 or via email at dalleyne@unitedinsure.com

UNDERINSURANCE and AVERAGE This is one of the terms we at United strive to explain to clients when they obtain a Uniplan 2000+ Homeowner’s policy from us. Subject to the explanations above, it is important that you insure your property at a value that accurately reflects your intention (either indemnity or reinstatement) as this will be the basis of the insurance agreement. If you insure your property for less than what it is worth and your property is unfortunately partially damaged, your compensation may not be equivalent to what you expect to receive---even if your sum insured is way in excess of the claimed amount. For example, if the indemnity value of your home is $900,000.00, but you have insured your property for only $450,000.00 (half of the real worth), the property is ‘underinsured’ by 50%. Consequently, if there is a partial loss, you will be deemed to be your own insurer for the remaining 50%, and any amount claimed will be reduced proportionately: - in this case by 50 %. This is called Average. EXAMPLE: Indemnity value of the Home..........$900,000.00 Policy Sum Insured............................$450,000.00 Amount Claimed .................................$90,000.00 Amount Paid......................................... $45,000.00 (less any deductible) We understand that it may be difficult for you to arrive at an accurate dollar value for which your property should be insured. In order to ensure that your property is adequately insured we recommend that you obtain a professional valuation. We also suggest that you call or visit any United Insurance location today or visit us at www.unitedinsure.com and let our team of trained professionals provide you with sound advice aimed at ensuring you have adequate insurance coverage. DEDUCTIBLE A deductible or excess is the amount of money each policyholder is responsible for in the event of any loss or damage which is covered under your insurance policy. Once the dollar value of your loss exceeds the value of your deductible, your insurance policy kicks in and you’re covered up to the value of your coverage (sum insured). These deductible amounts are generally small dollar values when compared to the amount for which you are covered. We undertake to quickly process clients’ claims and the settlement will generally be made minus the small deductible. For certain types of policy and peril, your deductible is calculated as a percentage of the sum insured. For example, in respect of your home or office, a deductible of 2% of the sum insured is applied in respect of the perils of hurricane, cyclone, earthquake, volcanic eruption, tornado or windstorm and/or flooding or overflowing of the sea caused by any of these perils. We trust that you now have a good understanding of these key terms. However, if you have any questions, please contact United Insurance, visit one of our locations in the 14 territories in which we operate, or visit us online at www.unitedinsure.com. Whether you’re a United client or simply looking for some information to help you navigate the world of insurance, we’ll be happy to assist you.

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Spread your risk and buy with a loan Experienced Mortgage Broker Anita Ashton offers some advice to cautious buyers...

These are good times to buy in the region as property values have dropped in certain areas and real estate agents and vendors have finally accepted a culture of negotiation. Also, mortgage interest rates are lower than ever with rates in and around 4% for non-residents and 6% for local residents.

Risk has always been a catchword in the investment business, but it has hardly been a major factor in modern times when buying property as property values were generally on the increase year after year. However, all that changed in 2008 and since then lenders and property investors have become as risk-averse as any other lender or investor. Nowadays we live with a much more cautious lender and discerning borrower than we had five years ago and while the lender continues to massage terms and conditions to extract the quality customer, that same customer is goggling the lender to check their credentials in a new financial world of suspicion, distrust and diligence. Perhaps it was there all the time from the lenderâ&#x20AC;&#x2122;s perspective, but the borrowerâ&#x20AC;&#x2122;s confidence has been eroded by global scams at the highest level in financial institutions, many of which have had disastrous consequences in the United States and Europe. Many property lenders have disappeared from the landscape, and some have been bailed out by governments while others have been so tarnished by the experience that their lending terms have been tightened to minimise their risk. Inevitably the good customer has suffered with the bad, but lenders still need to lend to exist and attracting new customers remains a high priority in their overall development strategies. Times may have changed, but mortgages are still available as lenders have a secured loan and generally speaking, most borrowers value having a roof over their head and a security that will be a valuable asset when the loan is repaid. Amidst all the international mayhem, Caribbean lenders have stood firm and continued to provide mortgage funds for local residents to purchase a home and also provided packages for non-residents. Admittedly the terms and conditions have tightened, but lenders still need to lend to generate income. Local mortgages are generally low risk as Caribbean people place the highest priority in owning their home and while delinquency has increased in recent times, the level is relatively low and foreclosures are rare. Perhaps not so with nonresident loans where the speculators who purchased on the back of projected rental returns have found it tough to maintain their repayments and high income earners have fallen on tough times in their domicile. But lenders have continued to stay in the business albeit loan-to-values have decreased, the risk spread has increased and the risk analysis has become much more investigative. This is

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understandable given the changed environment and indicative of the cautionary strategies of the Canadian banks who dominate Caribbean lending and who have come through the challenges of the last five years virtually unblemished.

Anita Ashton is a Director with Caribbean Mortgage Services and has over 25 years experience in Caribbean and UK lending. She lives in Barbados and travels regularly through the islands providing mortgage facilities to overseas buyers and developers. She can be contacted by telephone at (246) 230 5824 or by email at anita@caribbeanmortgages. com

Overall this is good news for the borrower. At local level lenders continue to compete with each other so the terms and conditions are competitive, and packages are available for non-residents. It is the latter where lenders see more risk and where terms and conditions have become tighter. Self-employed persons have been particularly affected and where income has been pegged low for tax efficiencies at their domicile this will seriously affect the amount they can borrow. Also, dividends are being treated as ‘optional income’ and either ignored completely or significantly marked down. Key components of the mortgage process remain the credit report and the applicant’s track record. Of growing importance is the need to submit the application papers correctly and professionally. This is where the experienced mortgage broker earns their salt, as a poorly presented application these days is almost doomed from the outset. Overseas borrowers often fail to appreciate local lending conditions and try to equate them with their homeland, but Caribbean lending is very conservative and it is a culture that has stood the industry in good stead during the current global crisis. It won’t change, so comparing apples with oranges doesn’t work in this instance! As with all mortgage lending the lender wants to get quality business and they want to see commitment from an equity injection by the borrower. The borrower simply wants the best terms and conditions to suit their needs and from a reputable lender with a track record of good customer service. The challenge for the mortgage broker is bringing the two objectives together. These are good times to buy in the region as property values have dropped in certain areas and real estate agents and vendors have finally accepted a culture of negotiation. Also, mortgage interest rates are lower than ever with rates in and around 4% for non-residents and 6% for local residents. Loan-to-Value varies from island to island, but local mortgages can be as high as 95% and in some instances 100% in special circumstances. Loan-to-Value for non-residents will not generally exceed 70% and may drop to 50% depending on the property market at a particular location. The mortgage market is a potential minefield for some buyers so the importance of seeking good advice from an experienced mortgage professional cannot be overstated. A fee is involved but the right advice can save the borrower thousands of dollars. Every investment carries a risk element and in the lending business that risk is now twofold. The lender will offer terms and conditions once their risk requirements are met, while the borrower has the benefit of accessing funds to be able to purchase. This also means a borrower can spread their risk with the lender so there are mutual benefits for both parties. These may be tougher times, but business goes on and Caribbean lenders are committed to providing mortgage facilities to suitable applicants.

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Cover Drive showcases the economic benefits of music Bob Marley may not have discovered Jamaica, but his music put it on the world map and long after the great man’s death it inadvertently continues to serve the island’s tourism well. Rihanna is doing the same for Barbados where the tourist chiefs have appointed her an Island Ambassador and gone to great lengths to use her in their international marketing. The initiative doesn’t sit comfortably with everyone, but millions more people know about Barbados because of her music and the spinoff for tourism is immense. But Rihanna is not the only musician making a big contribution to Caribbean tourism as Clare Hiles discovered when she interviewed the talented Barbadian group Cover Drive…

Clare Hiles is a Freelance Features Writer and is currently completing her Masters Degree in journalism at London University of the Arts. She specializes in magazine articles and has worked for a number of quality international glossy publications. She can be contacted by email at c.hiles2@arts.ac.uk

Anyone who faces the four-piece band that is Cover Drive cannot help but be immediately hit by their stunning ‘Bajan’ good looks and vibrant personalities. Playful banter flows continuously between Amanda, T-Ray, Barry and Jamar, who are completely at ease as they sit in their own living room in idyllic Barbados with blinding sunshine streaming through the open windows. ‘Comfortable’ is the word to describe the Barbadian band, who formed two years ago at the suggestion of T-Ray’s mum, who told them to ‘stop wasting time and make it happen!’ “I used to babysit T-Ray when I was 15,” laughs Amanda, who sports vibrant red hair, freshly dyed for another new music video. “He was just the cutest little munchkin!” Amanda’s playful dig at the youngest band member prompts a swift “Carry on!” from him, as the rest of the members laugh at his expense. Barry, Jamar and Amanda were all in the same friendship group in their small island home and had gone to college together. The four then united and built upon their strong friendship to form Cover Drive, a name they chose because of T-Ray’s Dad’s love of cricket. Since that humble prompt from T-Ray’s mum, Cover Drive has exploded onto the international music scene, collaborating with British rap sensation Dappy and American hip-hop artists Far East Movement. With Amanda as lead singer, T-Ray on drums and vocals, Jamar as the bassist and Barry’s guitar skills, their debut album, “Bajan Style” produced Number 1 hit single “Twilight”, and with over 21 million YouTube hits. With plenty of new music on the way, the band look poised to enjoy even more success in the future.

“I used to babysit T-Ray when I was 15,” laughs Amanda, who sports vibrant red hair, freshly dyed for another new music video. “He was just the cutest little munchkin!”

“Our new material is really cool,” says guitarist Barry, the oldest member of the group and a former rally car driver. “I’m in love with our new song ‘Hey You’ at the moment.” The band was back in Barbados recording their new album, and enjoying a return to their roots. “We just wrote and recorded ‘Something to Say’, which has a great energy to it,” says Jamar, “but it is always great to be back home.” The Bajan band’s single, “All My Love”, was fittingly released on Valentine’s Day and the fun, pop-infused tune had already swept through YouTube to become yet another Internet sensation for the group. Cover Drive famously got their ‘big break’ from the net, with their ‘Fedora Session’ cover songs attracting a lot of attention in the music industry, and establishing their strong following. They also record a ‘Weekend Lime’ segment for their fans, which is currently going strong in its fifth season and gives their audience a zany insight into their busy personal lives. “All My Love” is teamed with an eye-catching music video featuring Amanda in a stunning mermaid costume, which only her sensational figure could pull off, and the boys decked out as creative alter-egos Barnabus (Barry), Angelow (Jamar) and Leroylicious (T-Ray). “All My Love” utilizes the beautiful Barbadian setting along with the carefree vibe Cover Drive resonates. You can’t help but wish you were there with the group, or even just a part of the comfortable friendship the bubbly four demonstrate.

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‘Lick Ya Down’ was the band’s first single and its success catapulted them into UK recognition and celebrity status when it debuted at Number 4 in the iTunes UK charts.

Despite the excitement about their new material, the band still credit some of their original songs as big favourites. “I love to play ‘Lick Ya Down’,” says T-Ray, the drummer. “I love the rock element we incorporate into the live performance of the song.” ‘Lick Ya Down’ was the band’s first single and its success catapulted them into UK recognition and celebrity status when it debuted at Number 4 in the iTunes UK charts. The title, a Barbadian phrase, has been a source of entertainment for the group as they always run into trouble explaining what it means. “We wanted a first single that was really Bajan (Barbadian), and was fun, but we didn’t realize that the world would think it meant something else!” laughs Amanda. The innocent phrase simply means to knock someone down, and it an example of Bajan ‘slang’. Since ‘Lick Ya Down’, Cover Drive has opened a major gig for superstar Rihanna at the Kensington Oval, and also for American star Kelly Clarkson. Describing themselves as the ultimate lovechild of No Doubt and Black Eyed Peas, their self-confessed ‘Carib-pop’ sound has attracted a unique audience, and opened international eyes to even more Barbadian talent. They rate opening for Rihanna one of their career highlights, and thoroughly enjoyed working with the Barbados Tourism Authority alongside her to promote the island. T-Ray says, “We are always looking for new ways to work with the BTA and promote Barbados. We are always in touch.” And its Barbados the band misses the most when they travel, and they’re quick to point out that they didn’t realize exactly how hard it would be to leave. T-Ray says, “It’s the little things that you miss the most and take for granted. Like when we’re in England you realize that there’s no whistling frogs when you go to sleep.” “And the sun,” adds Amanda, “The sunshine always makes you feel warm. Not to mention the macaroni pie!” The mention of Bajan food generates a chorus of agreement among the bandmates, with Barry adding that Chefette (a Barbadian fast food chain) is one thing he hates living without in the UK. Currently, the band lives between Barbados and London, traveling every three months back and forth. They all agree that the worst part of the whole journey is dealing with the planes, and luggage allowance. “One time we were traveling back from Barbados,” says Amanda, “And we had SEVENTEEN pieces of luggage. Thankfully the ladies at the desk were so nice and gave us some passes to go through,” but T-Ray adds, “The second time we weren’t so lucky.” Despite their globetrotting they have no plans to leave their island permanently, and are content to return to ‘the Rock’ to record their albums and recharge the batteries. It highlights the affection and love they have for their home and the huge economic spinoff is that many more people will want to share that experience having been introduced to it through their music.

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DIAMONDS: An investment in love

Diamonds International Marketing Manager Simone Ward offers an attractive option to investorsâ&#x20AC;Ś We spend our discretionary income much differently from that earmarked for investment purposes. Still there is some cross-over in these often contrasting goals. Houses are regarded as an investment. Yet people fall in love with properties based on an emotional response they feel while in the house. Those same heartstrings often pull on diamond shoppers. Most diamond jewelry is bought for sentimental reasons rather than for investment. We celebrate important milestones in our life with diamonds partly because of their beauty, rarity and durability. These attributes make diamonds the perfect mile-marker for our personal achievements.

We like to think of diamonds as an investment in your love...your life story... your celebrations.

So are diamonds considered an investment? We like to think of diamonds as an investment in your love---your life story---your celebrations. When customers discuss buying their diamonds for investment, we encourage them to choose diamonds that are meaningful to them; for reasons of the heart. Still, over the years, we've observed interesting trends in diamonds that have gone to market after being in a private collection. Certain aspects of diamond ownership impact their resale desirability. Famous personalities sell their diamonds all the time at astronomical figures that have more to do with their celebrity quotient than the diamond itself. Fancy colored diamonds have witnessed the most impressive resale records; most often sold through major international auction houses. A couple decades back, many people were unaware that diamonds were produced in color. The name "fancy color" as it refers to diamonds means a natural diamond of a prominently attractive color that has not undergone any sort of treatment to enhance or produce a color. These treasures can sell upwards of $1million dollars per carat depending on the rarity of the color and the size of the stone being sold. Whenever you have a diamond that is unusual and attractive, you have something special. Savvy diamond collectors nowadays look for specialty

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... at Diamonds International, your diamond can also be brought back for full-value trade up any time youâ&#x20AC;&#x2122;re ready for a larger stone. cut diamonds that out-perform previous diamond cuts. It's all about light, as any diamantaire will tell you. Masterful cutters will transform a beautiful rough diamond crystal into new shapes that release more brilliance than previously achieved. One of this centuries' most brilliant specialty cut diamonds has turned out to be the 90 facet round Crown of Light diamond. In fact, it is so exclusive, the US Patent and Trademark Office granted a patent for this remarkable cut. Each of the 90 facets, which is nearly double that of conventional round diamonds, acts like a mirror reflecting back light to the viewer. That's what makes the Crown of Light give off such superior brilliance. Examined side by side with similar quality round diamonds, the Crown of Light appears whiter, lighter and brighter than its conventional counterpart. But it's always best to see for yourself when considering which diamond to choose, since buying a diamond is an important decision, and you will want to enjoy it for years to come. For that reason, the courteous staff at Diamonds International will give you plenty of time to select from the wide array of diamonds they carry. You can judge for yourself which is the best choice for your taste, your style, and your budget. Buying a diamond is an investment in your life. It should represent your unique story, like an extension of your personal style. Your diamond will last beyond your lifetime. It can be lovingly passed down to be cherished by your loved ones. But at Diamonds International, your diamond can also be brought back for full-value trade up any time youâ&#x20AC;&#x2122;re ready for a larger stone. Inquire for more details about this program. Diamonds International is the only sightholder in the Caribbean, with buying power that translates into quality, selection and value for every customer. The exclusive 90 facet Crown of Light premium diamond is available only at Diamonds International. So stop by Diamonds International today to experience an investment for your heart with returns that will last a lifetime.

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Economic Citizenship Economic Citizenship is a relatively new concept in the Caribbean and has its critics in some jurisdictions. Why has Dominica offered this facility? Dominica has offered this facility as a means of raising revenue. What type of person would seek dual citizenship? People seek dual citizenship for a number of reasons. For some it is part of their estate planning, for some because of their country of birth it is difficult to travel for business or pleasure, for the discerning few they have decided they want a different way of life and wish to live and conduct business in Dominica. Safe Haven Offshore Limited is an authorized by the government to process applications. What types of citizenship are available?

Economic citizenship can be used as a tool in Estate Planning. In some parts of the world people cannot travel or carry on business outside of their country because of the activities of their leaders.

Citizenship is based on an investment which is not project specific.. Package A: Single Applicant An investment of US$100,000.00 Package B: Family Application One (Applicant and Spouse) An investment of US$175,000.00 Package C: Family Application Two (Applicant plus spouse and two children below the age of 18 years) An investment of US$200,000.00 Package D: Family Application Three (Applicant plus spouse and two children below the age of eighteen) An investment of US$200,000 and an additional US$50,000 for additional children below the age of 18. Any person 18 and upwards will be processed as a single applicant even if they are still living at home and maintained by their family.

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Obviously the fees are a crucial part of the process. What fees are generally involved? In addition to the investment any-one seeking economic citizenship will be obliged to pay Due Diligence Fees which can range from US$5,000 and upwards. The Due Diligence Agents used to conduct enquiries have to be on the Government approved list and the authorised companies are Bishops , Kroll Financial Examinations & Evaluations, Inc.. The Agents authorized by Government to process applications also charge for their services. This is not regulated by Government. There will also be minor application fees the largest of which is a processing fee of US$1,000 paid per family. Is there detailed due diligence done on the applicants or is any person accepted who can meet the other requirements? Due diligence must be done on the family and this is undertaken as I said by Kroll, Bishops and Financial Examinations & Evaluations, Inc.. Reports go direct to the Financial Services Unit and neither the Applicant or the Agent see the report. Due diligence must be carried out anywhere the individual has lived for more than six months.

Cecily Lees is a UK trained Attorney who read about Dominica 14 years ago and after visiting the island fell in love with it. She later moved to the island and set up business. She is an owner of Safe Haven Offshore and Safe Haven Real Estate with Archipelago Trading Ltd a Dominican Company owned by Yvor Nassief and his wife. Their website can be found at www.safehavenrealestate.com Cecily can be contacted by telephone at (767) 448 5718/440 0878 or by Email at safehaven@cwdom.dm

What are the general benefits of Economic Citizenship? Economic citizenship can be used as a tool in Estate Planning. In some parts of the world people cannot travel or carry on business outside of their country because of the activities of their leaders. There are many who are law abiding professionals and because of the lottery of where they were born they cannot travel or carry on business in the rest of the world. However, there are a number of exempt countries and if you are a citizen of these countries you cannot apply for economic citizenship under the Dominica programme. How would you answer critics who feel this facility invites applications from individuals with dubious character and background? The Due Diligence procedures are very thorough and in addition the Applicant has to attend an interview which should prevent such persons getting through. It is also incumbent upon Agents to act responsibly and if they become aware of suspicious behaviour to report it to the Financial Services Unit and not to process the Application. How long does the application process take and is there a refund available if it is not successful? The process can take three months or more but it is essential that the checks are properly undertaken and sometimes the due diligence process can be lengthy. Where can persons get more information? You can visit the Government website http://dominica.gov.dm or visit our website at www.safehavenoffshore.com