Contents FROM THE EDITOR
Change Remains the Engine of Growth
BARBADOS David Coombes Takes A Look At Real Estate In Barbados The Crane - Driving Value From Vacation Ownership Interview with Luis Carrillo and Gael Alluard Claridges - Year Two Ocean Two Vuemont Captivating Rual Ambience
ST. LUCIA Ollie Gobat provides Informative Insight Into Current Real Estate Market Sugar Beach - A Sweet buying Opportunity Mount Du Cap - Location, Lifestyle, Luxury
ST. KITTS & NEVIS Brian Kassab Paints The Real Estate Landscape Four Seasons Resort Estates - Timeless & Transcendent
TURKS & CAICOS Katie Gutteridge Gives Us Lots Of Reasons Why She Loves Turks & Caicos
OTHER ISLANDS A Quick Guide Of The Real Estate Market In The Region
BUSINESS & FINANCE SECTION The Caribbean Is Recovering - Rolf Phillips Private Wealth Banking Explained - Ben Crayston High End Property Will Always Have Value - Scott Jaynes Time To Buy And Time To Borrow - Clarence Hiles The Villa Hotel Concept Ticks All The Right Boxes - Roger Collins The Problem With Underinsurance - Sanjay Amin Villa Rentals Continue To Grow In Popularity - Judith Wilcox St. Kitts Takes The Lead In Attracting Business - Stanley Jacobs Borrowers Should Shop Around - Winston Inniss Private Airlift Is Very Attractive - Paul Gravel The Caribbean Market Is Picking Up - David Farrin Insuring For The True Value - David Aleyne
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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: email@example.com Distribution: Jan Musi - Antigua, St. Kitts & Nevis, Pamela Hiles - Trinidad & Tobago, Barbados, Canouan & St. Lucia Important Websites: www.caribbeanpropertymag.com www.caribbeanpropertysearch.com www.sportingbarbados.com www.barbadospropertynews.com Clarence Hiles Editor: Advertising: Pamela Hiles Design: 809 Design Editorial thanks to David Coombes, Joanna Robinson, Ollie Gobat, Brian Kassab, Katie Gutteridge, Mike Challis, Mark Waters, Bill Guy, Rolf Phillips, Ben Crayston, Scott Jaynes, Roger Collins, Sanjay Amin, Judith Wilcox, Stanley Jacobs, Winston Inniss, Paul Gravel, David Farrin and David Alleyne. 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 2011 Volume 10. The material and editorial content in this publication was deemed correct in March 2011 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.
COVER IMAGE Ocean Two - Barbados Compliments of Ocean Two
THIS BANNER IS WORTH US$25,000! If you purchase at beautiful Sundance Ridge in St Kitts and have seen the development in our publication we will arrange a US$25,000 discount off your furniture package if you tell us! Contact the Editor at firstname.lastname@example.org for more information.
FROM THE EDITOR
Change Remains the Engine of Growth Thereâ&#x20AC;&#x2122;s no shortage of opinion on the current global economic meltdown that refuses to die quietly or quickly. It has now been with us almost three years and although its impact has been mixed across world economies, the vast majority of countries have been affected negatively. It is not the first depression to hit international markets and understandably economic experts have highlighted cycles in prosperity down the years, but this time the impact has been unprecedented and what is more amazing is that there appears to be no universal blueprint to recovery in the short-term. Last year began with optimism based on signs of recovery in certain business sectors, but looking back is was a false dawn, and the road to better times is starting to look a lot longer than was first anticipated. Each business sector has had to adapt to the changed environment and nowhere has that been more evident than in the Caribbean. What happens outside the region always affect us and although the initial impact was slow in filtering through, it has been just as painful as in the larger developed markets. Never was the need for change more
crucial, and the smart business people were expedient in their policies as soon as the magnitude of this depression was understood. The economic world
is a very different place today than it was several years ago, but the Caribbean as a region has retained most of the qualities that previously prevailed and is slowly coming out of the tunnel. The key to better times is an appreciation of the new economic environment locally and overseas,
and making the changes necessary to prosper within it. Change is the engine of growth, and all across the region businesses and governments have had to change to survive and go forward. In many instances it has been a painful learning curve, but it has produced an environment of cautious optimism and ultimately it will bring a new generation of investors to the table. The economic prosperity of the Caribbean region largely depends on performance within the tourism and financial services sector, and there is evidence that both sectors have come to terms with the challenges and have turned the corner. Performance has varied from country to country and we should not lose sight of size in the economies of scale, but tourism figures are holding their own and offshore business continues to make an important contribution to the coffers.
Tourism is the crucial clog in the economic wheel and many service industries depend on it. The same could be said for real estate, as overseas property investors have not only boosted small island economies with foreign currency, but they have
The government needs to earn, but it also needs to look at the bigger picture and stimulate overseas investment, foreign exchange earning, employment and local industries. provided the market for a rampant construction boom in recent times. The tourists have remained loyal, but within their midst the number of property investors has dwindled in the past two years. However, the new investor is returning, albeit cautiously, and the business environment has to change to woe that business or the
Caribbean economies will sink into a backwash. Caribbean tourism leaders must recognize the global threat of India, China and South America and enhance their product with better value through added benefits. They must identify niche markets and align their attributes and assets to a particular audience. Governments must take a leading role in promoting tourism and in addition to marketing support; they must assist and protect their tourism partners with concessions and financial guarantees where necessary. This has happened with the high profile Four Seasons project in Barbados and the Baha Mar project in the Bahamas, but much more could be done to negate the punitive effect of high bank rates and the rampant escalation in the cost of utilities at many struggling hotels. The real estate industry also needs support to bring back investors and boost construction and governments all across the region could help bring down costs by reducing stamp duties,
property transfer taxes, licenses to purchase and tax on rental revenue. The government needs to earn, but it also needs to look at the bigger picture and stimulate overseas investment, foreign exchange earning, employment and local industries. Unfortunately nothing happens quickly in the Caribbean, and this is part of our lovely laidback lifestyle, but there are positive signs all across the region that key players are coming to terms with the new economic landscape and making the necessary strategic changes that will lead to better times. Enjoy your 2011 copy of Caribbean Property Magazine, as it will give you a great insight into this beautiful region and its many business and financial opportunities.
Clarence Hiles Editor
POPULATION: 270,000 SIZE: 166 sq. miles CAPITAL: Bridgetown CURRENCY: Barbados Dollar LANGUAGE: English LOCATION: The most easternly of the Caribbean Islands and the first port of call for sailors crossing the Atlantic.
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conflicting reports that bombard us every day. So letâ&#x20AC;&#x2122;s start with the facts. The banking system in Barbados is largely dominated by Canadian Banks and Canada has emerged from this current economic crisis with flying colours. Its banking system, its currency and its real estate sector have all weathered the tough times well and proved to be solid in the midst of global uncertainty. There is no doubt that the international banking system is likely to experience further tests throughout the coming year, but the Canadian banking industry has handled the situation admirably and proven that they are very secure. Barbados banking will therefore have solid support and leadership throughout this difficult period to the point where we are eventually on the road to recovery. Secondly, the people and the Government of Barbados (both present and past Governments) are for the most part steadfast and trustworthy. Barbados society is much the same although that is not to say that criminal activity and pockets of corruption do not exist. However, their levels are well below
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As we stride into 2011 with positive expectations and the knowledge and experience gained from a tough 2010, the reality is that no one really knows where 2011 is going to lead us. The changes in the Middle East with the old autocratic regimes being forced to transfer control of their countries back to the people, the massive government rescue packages offered to Greece and Ireland and the far -reaching consequences from sharing information over the Internet via vehicles such as Wikileaks and Facebook are all items that have added to even more global uncertainty. So how do we prepare for the unknown and are there lessons that can be learned from the difficult trading conditions of the last two years so that we can move forward with confidence? And what has all of this got to do with the real estate market in Barbados? Unfortunately none of us has a crystal ball, so perhaps the best approach is to look at the facts and apply some simple common sense to guide us through the collage of varied information and
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Leading realtor David Coombes of Caribbean Island Properties looks at the Barbados real estate scene and confirms it is a good time to buyâ&#x20AC;Ś
The real secret to Barbados is the fact that you can enjoy this competitive, secure and relatively high standard of business and social environment in a country that is blessed with an ideal climate of warm and sunny days the regional figures and the wider world as a whole. In the melting pot of global qualms, virtues such as these rise to the surface. Our island also has a solid infrastructure, an educated and an inherently disciplined population and an ever growing standard of sophistication mixed with local charm. This means that overseas investors will enjoy living in a beautiful peaceful country and that they too can enhance its financial well-being through their investment and their presence. But the island is not faultless, and we recognize the need to improve our standard of customer service and reduce the
amount of red tape throughout the business environment. Barbados is number three in the Americas on the UN Human Development Index, after the USA and Canada, so if we are to maintain or improve this position we will need to address the above short comings. These important facts provide solid reasons why overseas buyers should invest in Barbados; especially during volatile times such as those we are currently experiencing. But it does not end there. The real secret to Barbados is the fact that you can enjoy this competitive, secure and relatively high standard of business and social environment in a country
that is blessed with an ideal climate of warm and sunny days (temperatures between 24° – 29° C) cooled by gentle tropical breezes on an island surrounded by beautiful beaches and the warm inviting Caribbean Sea. Does anything more need to be added? In 2010 we learned that properties had to offer value for money if they were to move, and that vendors who were willing to be flexible and creative in their price expectations were able to get results. The market has moved past the days of putting any old asking price on a property, and in the current market rigid pricing might lead to a property sitting for some time with little or no interest. This means that in 2011 more and more properties will offer better value for money, as good quality products are available at more competitive prices. These will include larger or older homes that are no longer suited to their owners’ needs and shrewd investors will have the opportunity to purchase them at realistic prices. In some cases they will be properties that would have been outside their price range a few short years ago. 2011 may not be the best time to sell a property in Barbados, but it is surely is a good time to buy one.
David Coombes has his own real estate company Caribbean Island Properties and brings a wealth of international experience to the local industry. He studied Business at Bournemouth University and his colourful work experience includes running his own real estate company in the Isle of Wight, working in London and spending ten eventful years with Paramount Pictures. He is a member of the board of the local real estate association BEAVA and his visionary approach to marketing has included his own radio programme. David can be contacted at; email@example.com 14
Driving Value from Vacation Ownership As the world looks forward to economic recovery, people everywhere are placing more emphasis on quality family vacations. At the same time, they have not forgotten the lessons of the recent past, and continue to look for value in everything they do. In the case of vacation home ownership, whether fractional or whole, the main priority is no longer merely the quality of the residences and amenities. Buyers are now, more than ever, looking to minimise their lifetime costs of ownership, while maximising financial returns on their vacation property investment.
The quality of the vacation experience at The Crane Residential Resort is legendary. Established in 1887 on the Southeast Coast of Barbados, The Crane, with its dramatic
setting atop steep limestone cliffs, overlooking a beautiful pink sand beach, has become a truly iconic destination. A walk around the Craneâ&#x20AC;&#x2122;s 40-acre grounds reveals the attention
paid to creating a world of understated luxury, while maintaining individual privacy and offering immediate access to world-class resort amenities and services.
For more information on vacation ownership opportunities at The Crane Residential Resort, visit www.thecrane.com or www.theregistrycollection.com, or email firstname.lastname@example.org. 17
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Crane’s residences is standardised, they can be sold via the Internet and by tour operators and travel agents. In addition, as a full service luxury resort, on world-famous Crane Beach, The Crane commands very high nightly rates. The Crane’s versatile floor plans allow most residences to be converted into single bedrooms as required by the vast majority of leisure travellers. The Crane’s experienced in-house marketing and reservations department works closely with some 100 tour operators and online travel companies, and is supported by independent PR and Marketing companies engaged in the UK, USA, and Canada. The Crane has aligned its interests fully with rental pool owners by limiting its fee to a percentage of owners’ net profit. From inception, the rental pool has generated net profits to all owners; even during “The Great Recession”, the rental pool was able to cover all rental pool expenses and generate a small profit. The Crane’s Management Team reported that 2011 has started out even better, with reservation increases of 44% yearto-date versus 2010. Another benefit of The Crane’s offering is that owners can equitably trade the use of their residence for any other type of residence or for any other time of year. Crane owners can also trade with The Registry Collection® for vacations in over 200 luxury properties worldwide or many other services including private jets, luxury cruises and premium entertainment. There can be no better testament to the success of the Crane’s business formula than the fact that more than 50% of new sales come from existing owners looking to buy more time or a larger residence.
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Twelve years ago, The Crane’s management team made the strategic decision to not only aim to be the most luxurious vacation ownership resort in the Caribbean, but to also deliver maximum value to owners. During the past few challenging years, this emphasis on value has become increasingly attractive to the market. The Crane is able to offer extremely competitive prices for luxury vacation real estate because its employees are responsible for virtually all aspects of development, including architecture and all construction. In addition, The Crane’s fixed, published prices for shared ownership are lower than any other comparable offering in the world because it spends no wasteful marketing dollars on gifts and high-pressure sales. Just as importantly, The Crane is able to keep ongoing costs very low because of full vertical integration and the bulk purchase of goods and services. With over 400 employees, The Crane does virtually everything in-house, from landscaping and security, to laundry and appliance repairs. In addition, The Crane drives down the operating costs by the use of standardised appliances, fittings and furnishings, allowing for efficient stocking of replacement parts, thus reducing ongoing cost of ownership. The Crane’s low initial pricing, combined with the fact that it is located in an area that is just now being “discovered”, should result in substantial capital gains in the future. A good indicator is that even during the recent economic downturn, property values at The Crane continued to increase an average of 5% each year. The Crane’s rental pool program is designed to produce a net profit for owners after all expenses. Because everything about The
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The Crane’s residences were designed to complement the beauty of its natural setting, with superbly appointed, spacious floor plans and distinctive architecture. From the coral stone and marble finishes, to cedar doors and shutters and handcrafted traditional furnishings, these luxurious accommodations combine modern comfort with thoughtful design. Residences range from 740 to 4,000 square feet, with ten to twenty-five foot high timber tray ceilings. Many residences also offer private pools, gardens and roof top terraces. The Crane’s four restaurants feature a range of award-winning culinary delights, with Japanese, Thai, Italian and contemporary Caribbean cuisine on offer. There are also two bars on property, a fullservice spa, a modern fitness centre, flood-lit tennis courts, a waterscape pool complex, and a glass-fronted elevator down to Crane Beach. Over the past two years, The Crane has completed the $22 million “historic” Crane Village, which includes a jazz bar, outdoor dining, an art gallery, retail shops, a conference facility and a 3,000 square foot fitness centre.
Luis Carrillo & Gael Alluard Dwellings first opened its doors in 2006 and has now become one of the leading retailers of home goods in Barbados. Their beautifully merchandised 12,000 sf showroom showcases everything for the home including indoor and outdoor furniture and décor, bedding, bath linens and accessories and a full kitchen store. Today, we chat with Luis Carrillo and Gael Alluard who founded Dwellings. What inspired you to create Dwellings? We both love decorating our home and wanted to share that passion with other people in the island by bringing in uncommon furniture and décor items from around the World. Though there were many existing furniture retailers already in the market, we felt there was an opportunity to introduce a contemporary mid-priced home furnishings range to Barbados. Everything we offer in the store has an element of design, even every day practical items, and has to meet certain quality standards. Also, Dwellings is the only store to offer a full range of house wares in one location to enable customers to fully furnish and decorate their home in one go. You have so many different items in the store, how do you make your selection? We follow international trends closely to make sure that our offer is always on the cutting edge of interior design and we travel to the largest home and specialized shows across the world to find the best products at the best prices that fit into those trends. We want our customers to be inspired when they walk through our front doors so we also renew our
in store displays frequently so that our customers can have a novel experience every time they visit us. It’s important to keep presenting products in different ways and contexts all the time to show shoppers how they can incorporate them into their own homes. We are also very careful with the prices of the items we select; we strive to find beautifully designed items at the best possible price. All our items also have to meet certain quality standards to make it into our assortment. Our customers have come to expect high quality items from Dwellings so it is very important to us to maintain that quality standard and still meet their price and style expectations. You introduced the Design Studio in 2009. Can you tell us a bit more about this service? We introduced the Design Studio to answer the demands of our most discerning customers who were looking for customized pieces. We work with designers to source the pieces they require for their own creations, individual customers, commercial properties such as hotels and restaurants and villa developments. Whether a customer is looking for one sofa in a different fabric, needs a room makeover or wants a whole turnkey package for
their property, we can meet their needs. We have access to hundreds of product lines so we can basically find everything customers want and bring it to them hassle free and at a very competitive price. We ship product every week so we have very efficient shipping costs. This saves the customer unnecessary frustrations from shopping around endlessly and dealing with shipping and damages and expenses by offering products at a better price than they could bring it in themselves. Our free design service includes an in-home consultation, a full visual and financial proposal with floor plans and white glove delivery into the home. We work with local customers as well as foreign customers who have a second home in the islands. With today’s new technologies, we are able to work remotely with customers thousands of miles away over the Internet. People often associate the word “customized” with “expensive” but that doesn’t have to be the case. We work with customers with a wide range of budgets and create designs to fit every style and pocket. The fact that our design service is free also makes it accessible to more people. Can customers outside of Barbados also order through the Design Studio? With our new distribution center in Miami, we can now offer our design services all over the Caribbean. For now, we only offer turnkey packages into other islands as we have to ship full containers and send our team for the installation. Smaller orders can be shipped to a US address for forwarding.
To view more information about Dwellings’ products and services, visit them online at dwellingsbarbados.com 20
Now In Its Second Year! Only launched to the market when it was completely finished back in late December of 2009, Claridges entered the Platinum West Coastâ&#x20AC;&#x2122;s second home market, raising the bar to yet newer heights for the Boutique, Residential Resort style, living communities.
Located in the Gibbs area of the West Coast, just across from the beach, in a quiet, mature residential area, the development consists of just ten beautiful Villas set in a true Resort-Style setting of some 2 acres of lush, tropically landscaped gardens encapsulating a stunning 3,100 sq. ft. swimming pool, featuring three waterfalls, gazebo and a beach area.
The Development really has matured over the last fifteen months, and being immaculately maintained by their own full time staff, the gardens have grown magnificently to enhance the wonderful architecture and at the same time, giving a much higher level of privacy. You really do feel you are in a virtual Eden! Two villas have been sold to date, and three villas are in the process
of being let, quite a feat when you consider how tough the world economy has been since their launch. Claridges Show Home and Sales Office is open Mon â&#x20AC;&#x201C; Sat, 10am to 4pm, during the season, so please feel free to pop in and view. Their dedicated Sales Expert will only be too pleased to give you a full tour of this truly exceptional product.
Claridges, Gibbs, St Peter, Tel - (246) 266 9005 Email - email@example.com www.claridgesbarbados.com 24
OCEAN TWO Although a relatively new concept in Barbados, the condo-hotel structure has been successfully used in many U.S. hot spots such as the Florida coastline and Las Vegas as well as the Mediterranean Riviera. Ultimately, a condo-hotel purchase provides owners with the benefits of a vacation or second home while being afforded the luxury of services and amenities of a resort. 28
What is a condo-hotel? At Ocean Two, a purchaser has title to a specific unit and is responsible for the taxes, insurance and maintenance fees that surround a normal condominium purchase. The owner places their unit into the Ocean Two hotel rental program and receives a portion of the rental revenue which helps defray the cost of ownership.
What are the key characteristics of a successful condo-hotel? Location plays a pivotal role in the success of the hotel aspect of a condo-hotel. A beachfront location that has a wide array of amenities and services is not only attractive to purchasers but also increases rental interest and rates. Ocean Two fits this criteria perfectly as it is strategically located at the end of St.Lawrence Gap which is known for its
For more information on Sales or Holiday Rentals, please contact the Sales Team at (246) 233-4803 or firstname.lastname@example.org 29
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Flexibility and freedom are the most attractive aspects of purchasing this type of property. A condo-hotel is the hassle free approach to foreign home ownership - the pleasure of a vacation home without the concern of maintenance and management. Ocean Twoâ&#x20AC;&#x2122;s experienced management leverages their expertise and resources through mass advertising, contracts with international tour operators, centralized reservation systems and cost-control to maximize the return potential for owners. Ocean Two owners will also be members of Interval International which has a wide array of benefits for owners. As an Interval member, you can take a week or more of personal use time in your condominium unit and exchange it for a week at one of hundreds of comparable quality resorts worldwide participating in Intervalâ&#x20AC;&#x2122;s network of diverse properties which include vacation ownership, fractional, and whole ownership resort properties.
restaurants, bars and shopping; 10 minutes away from the very popular Oistins Fish Fry; 15 minutes from the airport and 20 minutes from Bridgetown. An experienced management team is crucial to the profitability and longevity of a condo-hotel. Ocean Two is fortunate to have an experienced, highly motivated, management team who have been involved in the tourism industry for decades and have a wealth of knowledge of the industry and strong, professional relationships with key, industry partners. The 4 star hotel offers exquisite facilities including a beachfront restaurant serving international fare, a swim-up pool bar; a meandering pool complete with private cabanas; a meeting room and concierge lounge; a lobby bar and lounge; a full size gym to satisfy the needs of the most discerning fitness buff and a secluded roof-top patio complete with a plunge pool and bar creating a romantic location to watch the setting of the sun or the perfect location for a wedding, cocktail party or function. In addition to the above facilities, Ocean Two will offer the services and amenities that are generally associated with a hotel of this star rating including daily housekeeping and turn down service, 24 hour front desk service, water sports facilities, WiFi access through the property, room service, cable TV and Movies on Demand, flat screen televisions and iPod docking stations, in-room chef service, activities desk, sundry shop and an on-site Weddings & Events CoOrdinator. Ocean Two is the perfect blend of both worlds merging the economic and financial benefits of beach front real estate investment with the vacation enjoyment and lifestyle of a 4 star hotel.
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What are the benefits to owning a condo-hotel?
Interval also offers its members a variety of leisure lifestyle and benefits that qualifying O c e a n Two owners will be able to enjoy on a year-round basis. You will be able to take advantage of these exciting benefits every day, whether on vacation at Ocean Two or at home. In addition to exchange, these valuable perks include access to Getaways - sevennight resort stays that members purchase without relinquishing their home resort week - special offers and discounts, travel services, member publications, and more. Currently, condo-hotels are experiencing high capital appreciation on the international market due to the escalating demand for alternative investment options. Local experts are confident that this global trend will have a trickle effect on the Barbados market based on success rates of the condominium sales on the island. As such, units like those at Ocean Two are in high demand and re-sale is not only feasible but also financially attractive.
Vuemont Captivating Rural Ambience The luxuriously stylish residences at Vuemont offer residents and visitors a completely different lifestyle from the conventional beachfront. Situated in the heart of St Peter in the north, the development has a totally rural ambience, surrounded by lush tropical vegetation. The views from Mount Brevitor all the way down to the coast are stunning; and within this 39-acre community,
nowhere is too far away. For Vuemont residents this means a mere five minutes drive to historic Speightstown, fifteen minutes to bustling Holetown and thirty minutes to the capital city of Bridgetown. Vuemont is an exclusive
the emphasis is on a relaxed lifestyle. It is truly amazing that such an idyllic community could exist within such close proximity to the West Coast and the important Highway 2A. That makes travelling to the northern part of the island so easy to access. Barbados is a small island and
neighbourhood of bright and beautifully created properties with a wide range of amenities perhaps one of its biggest assets. These include a Jacuzzi, two community swimming pools, tennis courts, fitness trails, and an exclusive clubhouse. Residents may also benefit from 24 hour security along with a
Commercial Centre with fitness facilities and Wellness Centre. The 77 residences feature both apartments and Villas finished to a high specification, and ranging in size from 1,134 sq ft to 1,560 Sq. Ft. There are two and threebedroom options, where purchasers can tailor their personal requirements to include larger wooden decks and plunge pool. Dedicated parking for each unit is at the doorstep. All properties have attractive wooden shutters and expansive patios to enhance the relaxation experience. Fitness enthusiasts, families and professionals will find Vuemont to be a suitable lifestyle in the heart of the countryside. Vuemont is a Barbadian-owned and managed company bringing together two of the giants in Barbados real estate development - Rotherley Construction Inc. and C.O. Williams Construction Ltd. Purchasers include residents with discerning tastes looking for a quiet lifestyle, as well as those persons in search of a good investment for capital appreciation and rentals, short and long term.
Prices start at US$355,000, and purchase is freehold. Viewing is a must. Once you have visited this exhilarating breezy Caribbean gem, you will be captivated by its ambience. 32
POPULATION: 160,000 SIZE: 238 sq. miles CAPITAL: Castries CURRENCY: East Caribbean Dollar LANGUAGE: English and a little Creole Patois LOCATION: In the Windward Islands between Martinique and St. Vincent 41
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yachts moored there is a lovely way to enjoy a relaxing afternoon walk after a lovely Caribbean lunch. It is a vibrant yet relaxing marine scene involving locals, sailors and tourists. Airlift from the UK has increased with British Airways flying direct daily flights from March in addition to Virgin Atlantic’s three direct flights a week. We have seen the airlift increase steadily into St. Lucia over the past few years and while this is essentially directed towards tourism, there are many business beneficiaries including our property market. Despite the global economic challenges of the last two years, St. Lucia hasn’t changed and we are still seen as a burgeoning destination. During 2011 and beyond we intend to remain on that upward trajectory. There has been some positive movement in the property market and while prices and values have understandably waivered over the past 12 months due to external market forces, we have an exceptional product that will endure the tough times and come out smiling at the other end of the this economic cycle. The
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The last couple of years have been very challenging for the real estate market worldwide, and very few places have been immune to the recessionary effects, including the Caribbean. However, we appear to be edging back as there are green shoots of recovery now appearing in most of the islands, and St. Lucia is up there with the best on offer. Interest in the island’s property sector has increased in 2011, and hotels have generally enjoyed a strong winter season, which demonstrates the ongoing appeal of St. Lucia as a holiday destination. Over the past 12 months St. Lucia has enjoyed the opening of some prestigious new amenities, which will ultimately attract more visitors and eventually benefit the property market. The impressive new Baywalk Mall in Rodney Bay opened last Christmas, with its luxurious casino and a wide variety of upscale quality shops, restaurants and supermarket. The boardwalk area at Rodney Bay Marina was also extensively renovated with new restaurants and cafes added. Just strolling around the marina amidst the many sailing yachts and mega
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Top St. Lucia realtor Ollie Gobat provides an informative insight into the current real estate market on the island…
prestigious 5-star beachfront marina development at The Landings has now handed over its brand new Phase-Three homes to owners and their finishes are superb. The Landings won an award for the best apartment in the Americas at the International Property Awards in London, and continues to be one of the leading upmarket developments in the Caribbean. Jalousie continues its impressive renovation in a breathtaking location between the legendary Pitons, and it won Best Development in the Caribbean at the same awards ceremony, while Cap Maison keeps going from strength to strength as one of the success stories to come through
the recession. St. Lucia is really a small property market and this has worked in our favour over the past 12 months as the scarcity factor of our real estate offerings has enabled prices to remain relatively steady. There has been some discounting, but not at the level of other destinations, and although the volume of sales has dropped because of the global economic downturn, most people buy here because they love the island and we expect them to continue to do so in the future. Land continues to be a popular investment with St. Luciaâ&#x20AC;&#x2122;s topography and natural beauty offering some sensational home sites that would be hard to beat 42
anywhere in the world. Over the past two years there has been some uncertainty about several major developments but we know a lot of things are happening in the background to get them back on track, and at least one new development is launching later this year after many years of careful planning. It will be aligned to a very high-end international hotel brand so look out for more news on this exciting development. St Lucia offers a stunning, authentic Caribbean lifestyle in beautiful tropical surroundings. We have seen the buyer profile shift over the last couple of years, with the motivation shifting more
and more towards lifestyle rather than with the expectation of shortterm high returns on the investment. This is given the understandable increasing amenities, the jawdropping backdrop of rainforests, hills, hidden coves and idyllic beaches and lush scenery everywhere you turn. There is a strong allure to many visitors to set up a home in St. Lucia and this trend appears to be continuing and we expect it to gather momentum in 2011 and beyond. Property investors are now wary of the promise of big returns in rental pools, so my advice when looking at investing in developments would be to look
with panoramic ocean views barely a minute from the golf course. This opportunity offers an attractive option to create the lifestyle you want, and it can also be a good way to enjoy short-term growth in value. Looking back, the past 12 months were not without their challenges, but there are many positives that can be taken from how you handle
closely at contracts, rental structures and historical data to back up any forecasts. There is still strong potential for rental returns in well-run quality resort developments, but the numbers have to be carefully assessed and owners have to be realistic about their expectations. The same can be said for land purchase, but there are still good offers out there. For example, in the stunning Seabreeze Hills development in Cap Estate, you can create your own idyllic home
adversity. On the back of tough economic conditions, Hurricane Tomas hit us at the end of October. St. Lucia is very rarely hit by serious hurricanes, but it was the rain that did the damage rather than the wind. The north of the island, where the vast bulk of real estate and tourism is located, was only mildly affected and most hotels quickly returned to normal service. The south of the island was hit harder, but the recovery and re-opening of hotels such as Ladera, Jade Mountain and
Jalousie was very impressive. The local utility company was also exceptionally efficient in restoring power across the island. All it all, the tourism sector and property sector were minimally affected and this was very encouraging. That said, a number of St. Lucians did suffer huge personal losses, but it says much for the people of the island that they rallied quickly and
...investors are now wary of the promise of big returns in rental pools, so my advice when looking at investing in developments would be to look closely at contracts, rental structures and historical data to back up any forecasts.
assisted those in need. Overall it could be argued that this is the best time to buy property in the Caribbean, and certainly in St. Lucia. There are some great deals to be had that may not be there at the end of the year when the market has recovered further. Despite the increased interest and the signs of recovery, some sellers want to sell sooner rather than later, so if you are toying with the idea of setting up a home in paradise, now is the time to come and visit us.
Educated in the UK, Ollie Gobat is a member of a well-known St. Lucian family who has strong business interests on the island. A successful realtor his expertise at the top end of the real estate market is unrivalled and amongst his sales portfolio is the prestigious marina development at The Landings. Ollie can be contacted at email@example.com 43
A Sweet Buying Opportunity in St Lucia Ever dreamed of having your own private paradise set within a UNESCO World Heritage Site, surrounded by mountains, rainforests and white sand beaches? With St Lucia emerging as one of the top lifestyle destinations in the Caribbean, the newly renovated Sugar Beach may just hit the spot. Located on the site of an original eighteenth century sugar mill estate on the south-west coast of St Lucia, the 130 acre development (formerly known as the Jalousie Plantation) aims to bring new life and prosperity to this part of the island, as it undergoes a mammoth US$100 million redevelopment. Once complete, it will comprise 64 luxury villas (which form 112 hotel rooms) and 42 residences
with two white sand beaches, three new restaurants, four bars, a scuba centre and a unique rainforest walkway and spa. Roger Myers, who developed several hugely successful chains of restaurants in the UK including Café Rouge, is now the chairman of the Sugar Beach. Living in St Lucia, he is exclusively focused on the development, and says: ‘Unique must be amongst the most overused words in property
descriptions, but with Sugar Beach it’s entirely appropriate. The setting, the properties, the facilities and the people who live and work here make it a truly unusual and wonderful place.’ Sugar Beach has received multiple awards from international property and travel experts, including the Residences being named ‘Best Property’ worldwide at the International Property Awards, achieving first
Sugar Beach has received multiple awards from international property and travel experts, including the Residences being named ‘Best Property’ worldwide at the International Property Awards, eco-design rules are applied at every stage of construction to make sure the unique ecosystem of the site is preserved and protected. The properties are being rebuilt to limit disruption to the surrounding wildlife and vegetation, and the sea in front of the properties is a marine reserve. What will be appealing to many are all the benefits of buying on a resort, including security, private
the discovery of their ‘essential selves’. The resort also has tennis courts, a gym, beauty salon, chauffeured golf cart service, boutique shops and even a wedding chapel. Well, who wouldn’t want to get hitched in paradise? www.residencessugarbeach.com +44 (0)844 921 0126
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chefs to cater dinners on the terrace, maid service and maintenance, children’s facilities, 24 hour butler service, rental management and marketing by the hotel operator - The Tides (Part of Los Angeles-based Viceroy Hotel Group) - when you are not using your home. For the ultimate in relaxation, head down to the Rainforest Spa, which offers marine-based and locally sourced products and treatments, and a holistic wellness program to guide guests on a journey toward
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five years permanent residency can be applied for. Buyers will also be pleased to know that there is currently no VAT, capital gains, death duties, inheritance or estate taxes in St Lucia. And the environmentally conscience need not worry. Strict
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place at the 2010 Condé Nast Traveller Awards (UK) for “Favourite Overseas Americas and Caribbean Hotel” as well as being the only hotel in St Lucia to make the coveted Condé Nast Traveler (US) 2011 Gold List for The Americas region. ‘The Residences’ at Sugar Beach are a collection of 42 exclusive properties with views of the Caribbean Sea and the magnificent Val des Pitons. The height of luxury, prices of these two to six bedroom properties range from US$2.4 million to US$9 million. Each of the Residences is designed in a Caribbean colonial style by world-renowned Caribbean architect Lane Pettigrew Associates, with cool white walls, polished wood floors, four-poster beds, plantation-style furniture and glamorous bath areas. To soak up the Caribbean sunshine, every residence will have its own private swimming pool with beautiful natural stone deck. The living and dining areas will open out onto spacious terraces, and various bedrooms will have private balconies. Homeowners don’t need to be a permanent resident to visit St Lucia for up to seven weeks per year and after purchasing land and a building are eligible to apply for one year’s residency, which is renewable every year and after
Mount du Cap Location, Lifestyle, Luxury Arguably one of St. Lucia’s most desirable properties, Mount du Cap’s casually elegant homes are in high demand; only 5 of 16 lots remain. ‘We’ve used only the best for our fixtures and detailing, Italian kitchens, Caribbean mahogany doors and windows and Kohler sanitary ware. The effect is modern but timeless.’ Mark Waters, Developer. The views at Mount du Cap in St Lucia are said to have restorative
powers; it’s easy to see why. Mount du Cap’s elevation affords some of the island’s most spectacular vantages: sea to sky from the northern bluffs and panoramas that extend east to west and southwards. The air and landscape are freshened by Atlantic breezes. Location, they say is everything, 48
and Mount du Cap, arguably St Lucia’s best development, has cornered the market on that. The 38 acre, 16 lot community is situated in Cap Estate, at the northern most tip of the island and real estate’s most desirable address. Serenity and privacy characterize the community, and
execution. The layout of the land parcels takes advantage of every vista, affording sea views or island landscapes. Construction is overseen by project manager James Kyle, the experience of which has been singled out as easy, efficient and hassle free. Says home-owner Donna Devaux, ‘We have no regrets because the process was so easy. We’d heard that building was such a headache. Mark and Jamie were amenable to work with.’ Developer, Mark Waters explains, ‘Mount du Cap is a special place and so we are invested in making sure that is reflected in each and every home.’ Interior details are just as important to Waters as the external aesthetic. ‘We’ve used only the best for our fixtures and detailing, Italian kitchens, Caribbean mahogany doors and windows and Kohler sanitary ware. The effect is
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elegance and casual luxury the Ian Morrison - designed homes. An integrated design scheme allows for the individual character of each home. The bespoke homes reflect Morrison’s thorough understanding of Caribbean living and effect a complete harmony with the landscape. He blurs the distinctions between indoor and outdoor space and achieves the delicate balance between embracing and sheltering from the elements. The windows, doors and verandahs frame and enhance the spectacular views, but there is an inherent elegance and aesthetic of the homes themselves. Morrison employs traditional architectural features in some of the details, but with a prospect that is quite firmly planted in the contemporary. Attention to detail has driven this project from inception to
modern but timeless. ‘We wanted to create an elegant ambience that was casual but exclusive and luxurious, a living style we believe is unique to the Caribbean,’ says Waters, Mount du Cap’s Developer. For homeowners the lifestyle at Mount du Cap is all about tropical elegance. Outdoor recreational spaces are central to the design, with each home featuring a pool and entertaining patio. The development is small enough to create a sense of community, but the lots large enough to afford ample privacy. Though Mount du Cap is tranquil and enjoys the exclusivity of its address, it is only minutes away from one every conceivable amenity, from a world class 18 hole golf course at the St Lucia Golf and Country Club, several beaches and the attendant water sport activities, Rodney Bay Marina and Rodney Bay Village, home to restaurants, bars, shopping and the brand new Bay Walk Mall and casino. Five of the 16 lots remain at Mount Du Cap. The cost of each home is estimated at two and a half million dollars dependent on client specifications. The properties are freehold and ideal as first or second homes or alternatively as an investment. Homeowners may decide to include the homes into a rental pool through the on-site property management company. Mount du Cap’s management service will oversee day to day running of the homes, including security, maid service, pool, garden and general maintenance. The Mount du Cap community is favourably positioned on the market and competitive with comparable Barbados developments. Says Waters, Mount du Cap is a unique investment opportunity and given the trends and the calibre of the real estate scene in St Lucia, is likely to mature quickly.’ ‘Outdoor recreational spaces are central to the design, with each home featuring a pool and entertaining patio.’
St.Kitts & Nevis
Whilst still small and in some ways undiscovered, St Kitts and Nevis is definitely on the map with regard to real estate. Increases in airlift with direct flights from Miami, Philadelphia/Charlotte, Atlanta, New York, San Juan and London have opened up the island to tourism, business development, and investment opportunities. The natural sleepy charm of the island and its people offer a warm welcome whether you are here for a day or to escape the cold back home! Over the past seven years real estate has changed with more land becoming available to purchase in areas such as, Half Moon Bay (currently due to open Phase 4), Cedar Grove (in the hills behind the airport), Beaumont Park (in the northern part of the island), and of course the South East Peninsula with Sundance Ridge and major land parcels being purchased by the Kiawah Group for the Christophe Harbour development which will include a marina, Tom Fazio golf course and boutique hotels along
POPULATION: 39,000 SIZE: 101 sq. miles CAPITAL: Basseterre CURRENCY: East Caribbean Dollar LANGUAGE: English LOCATION: West of Antigua and south of St. Maarten.
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with individual homes. All of these investments have contributed to the increased value of Frigate Bay property, as well as other areas of the island. Opened in early 2003, the Marriott was the first major hotel chain on the island and compliments our plantation inns and smaller hotels. Originally hosting over 600 rooms the Marriott itself has seen a change over recent years and now offers time-share within the resort property. Located on beachfront and offering all the amenities expected in any Marriott worldwide the hotel offers guests comfort and security in the knowledge that it is a Marriott Resort. The island offers many attractions to keep visitors as busy as they would like to be such as kayaking, catamaran and snorkeling trips, fishing and diving both on reefs and wrecks throughout our shores. However, if you prefer a lazy day soaking up the Caribbean sunshine you can always enjoy our many pristine beaches. And if you are more a land lubber the island offers rainforest hikes, volcano day
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St Kitts and Nevis â&#x20AC;&#x201C; the twin island paradise
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Leading realtor Brian Kassab paints the real estate landscape in St. Kitts and Nevis...
hikes, a zip line, mountain biking, horse back riding, scenic railway, Brimstone Hill Fortress, Caribelle Batik, plantation inns, our history and heritage museums and walking tours to
name just a few of the many attractions available to all fitness levels. For the golf enthusiasts, you can play at the Royal Marriott Golf Course with the course design utilizing both the Atlantic 56
and Caribbean as natural water hazards to test the avid golfer. In due course Christophe Harbour will offer a Tom Fazio designed course when complete and Nevis currently offers a Robert Trent
Jones course at the Four Seasons Resort. The island also offers a dining experience to suit all tastes and budgets from the plantation inn elegant experience to dinner overlooking the moonlight dancing on the harbour with the lights of Basseterre across the bay. Other choices are Italian, Indian, Chinese, and International in the form of Spice Mill, the Beach House, Marshalls, Serendipity, Rock Lobster, Ciao, and La Belle Vie. Many restaurants feature fresh fish and lobster caught that day and grilled over a BBQ. Prices suit all budgets and the
vast majority of restaurants are also family friendly. SE Peninsula One of the largest developments on the island is the Christophe Harbour. Comprising about 2,500 acres this long term project is very underway with a much completed restaurant-The Beach House, beach front villas, land sales and homes being constructed, preliminary work being undertaken on the golf course and marina, and a beach clubhouse under construction with completion due summer 2011.
Economic Citizenship by Investment St Kitts offers non-citizens the opportunity to invest in real estate on the island and through this investment to apply to the Government for citizenship. A minimum investment of US$350,000 invested in approved property is required for the application to be considered. Additional costs will be incurred with the application process and many attorneys on the island are available to assist.
B Kassab & Associates - We have been in the real estate business over 15 years and I have watched the island develop considerably in this time. Our office has expanded from being sole operated by myself to now employing 5 full time agents/staff making us the largest Real Estate office on the island. We offer assistance in long and short-term rentals, property management for owners both on and off island, and sales of all types and sizes of property, homes, villas, condominiums, commercial buildings, and development land. We are ideally suited to offer you the expertise and assistance you may need in finding your dream home away from home.
Four Seasons Resort Estates Nevis… Timeless & Transcendent And certainly one of the very best choices for Caribbean living As the sun rises on another brilliant Caribbean morning, wispy white clouds surround Mount Nevis Peak casting a magical spell over the sombrero-shaped island and the spectacular private world of the Four Seasons Resort Estates Nevis. This could be your world…both timeless and transcendent….
Certainly the fact that homeowners are eligible for economic citizenship for life, including full residency status with the right to work in St. Kitts & Nevis plus tax-free status on foreign income, capital gains, gift, wealth and inheritance taxes and the option of dual citizenship including a Nevisian passport is an enticing benefit. Yet more than that is the fact that Four Seasons Resort Estates Nevis is an established community. People have been living here for five or 10 years or more. Getting families together over holidays. Getting families together by the pool or by the barbeque. Simply getting to relax and know one another, in peace and quiet. Our developers are solid, with decades of experience in soughtafter areas including Vail and Virgin Gorda. And they chose to
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The Four Seasons Resort Estates Nevis exists in an irresistible duality of the “classic” Caribbean where time stands still and the “contemporary” beat of modern society in which architecture and design provide the ultimate in sophistication and technological advancement. Best of all, our community is created of like minded people from all over the world— people like you who are easily satisfied—with only the best. The Four Seasons Resort Nevis is a world apart, yet a true neighborhood of successful and caring individuals and families who work hard and deserve to have a getaway far from stress, far from the cares of every day life. Why do some of the world’s busiest and most discriminating people choose this island and this community to be homeowners?
commit their expertise here, in Nevis. With only a limited number of homesites left, in the last enclaves, the Four Seasons Resort Estates Nevis is a community at peace. We know who and what we are. We know we don’t want to live in a construction zone for years to come, and here, homeowners won’t. Our new neighborhoods are near yet above or apart from our existing ones, making the new home development separate. Clearing has just begun on a new residential community above Mahogany Hill with absolutely stunning views from high atop the mountainside near the 11th hole of the Robert Trent Jones II golf course. These 10 exclusive, over-sized homesite lots are now available for purchase with attractive, pre-development pricing. There is a second neighborhood in the final planning stages that will line the fourth fairway of our awardwinning golf course. The enclave of 15, three and four bedroom homes, featuring stunning views of Mt. Nevis and the golf course, will be just a short walking distance from the beach and all of the luxury amenities found in the main resort. Want a home now? Ask Bill Guy, our Director of Sales and Marketing, about opportunities for purchasing a previously
owned home. Consider Palm Grove, near the resort itself and tucked around the spa, tennis courts and golf course holes, Palm Grove homes are a wonderfully accessible way to begin to enjoy the Four Seasons Resort Estates Nevis lifestyle. Many Palm Grove homes have private pools, and all have the architectural grace that makes Nevis so appealing. Or move up the hillside and explore our other neighborhoods: Mahogany Hill, Sunset Hill or Stewart’s Estates. Each re-sale home offers all the
many benefits of Four Seasons living. The Four Seasons Resort Nevis, is consistently ranked as one of the top resorts in the Caribbean and the world. You’ve seen it featured in the major travel and lifestyle magazines all over the globe. Recently renovated and refreshed with new superb dining options and additional beach and water sports facilities, this is the ultimate sophisticated resort. (And an ideal place for your guests to stay or even to hold your
business meetings.) The Robert Trent Jones golf course is ranked #1 in the Caribbean. The Peter Burwash tennis program draws pros and players with passion. The Caribbean Spa has been featured in countless spa magazines as “amazing.” Further, the level of service and friendliness found on the island of Nevis is both refreshing and so very welcome. Yes, the Four Seasons Resort Estates Nevis is a standout. It is also a place where families can imagine their future, without losing sight of the present. It’s true that “the best not need be the most costly.” Indeed, with all the amenities and infrastructure already in place, it is likely that this estate development can be more affordable, both now and over the long term, than many in the Caribbean or the world. For a select few, the joy of home ownership in this Caribbean paradise can only be found at Four Seasons Resort Estates Nevis where “precision paired with panache” is how ForbesTraveler.com aptly describes the experience. We invite you to learn more about your Four Seasons Resort Estates Nevis community.
Call Bill Guy, Director of Sales and Marketing: 869-469-1901 or email firstname.lastname@example.org. www.fsestatesnevis.com Developed by FSR Estates Ltd. 60
Turks & Caicos
POPULATION: 21,000 SIZE: 166 sq. miles CAPITAL: Cockburn in Grand Turk CURRENCY: US Dollar LANGUAGE: English LOCATION: 575 miles south west of Florida 65
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economies in the Caribbean Investment opportunities here have not been so good for ten years. Since the economic downfall, the real estate market seems divided into two types of investors: the cautious watchers who will sit on their money and wait to see what happens; or the gambling kind who realise that without risk, there can be no significant gain. I fall in to the latter category, but I would never take a gamble without first accessing the odds, and when I calculated the risk factor in buying in TCI, they were stacked highly in my favour. I concluded that right now, there’s definitely not a finer time to buy here. Whether you’re an investor looking for a short or long-term project, or a sun worshipper after a permanent place to hang your hammock, there are plenty of ventures to choose from. 40% of visitors come to the Turks and Caicos on business – will your trip be for business or pleasure? I say you can have both? The main island is Providenciales (dubbed ‘Provo’ by the locals). The rest consists of 40 cays and islands, of which only six are inhabited. Most of the islands are
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Opportunity is the buzzword – it’s a word that is easily abused, especially in real estate terminology. But with agents from across the globe claiming almost every property in their portfolio has it, how can we be sure, which is the best place to invest in? From my point of view there are very few places out there that offer as much of the buzzword as the Turks and Caicos Islands (TCI). It is only 1.5 hour’s flight from Miami, and with many other US and international flights arriving daily at the international airport, the word is quickly spreading. Having had its fair share of turmoil in the past two years, including government corruption, decreasing numbers of tourism and revenue from stamp duty plummeting to only $11.7 million in 2009-10, down from $43 million in 2008-09, some would call you mad for even considering buying here. But they’d be wrong. With a fresh, stable government in place, newly appointed Governor Wetherell has brought in the smallest projected deficit in four years, hotels have slashed their room rates by up to 50% and as a result tourism arrivals rose 25% in the first half of last year. TCI also boasts one of the fastest growing
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Katie Gutteridge loves Turks & Caicos & she has plenty of reasons why
accessible by air from Provo in about 10-25 minutes, but there are also regular ferries from North to Middle Caicos, which are islands growing in popularity. The reason these idyllic islands are investment heaven is the draw of the tourism industry. Due to rental prices rocketing in both long and short-term lets, a buy-to-let option is probably the most favourable if you
and Parrot Cay are the most desirable and notoriously luxurious, with just a handful of residents, including Donna Karen and Bruce Willis, these small and very private islands provoke peace by prohibiting cars and right now you can buy a slice of paradise with lots starting from $399,000 to $2,300,000. With beachfront being the prime location and it
for easy access to the ocean on the north shore. View lots are available from $159,000 with homes up to $3,400,000. Why is there so much emphasis on buying a plot of land? Because in TCI, there’s absolutely no reason why you shouldn’t be building your own grand design and three definitive reasons why you should: No Land Tax, No
becoming less available, you can bet your life that in ten years from now, you’ll be laughing all the way to the bank. There is also a growing interest in South Caicos, where a major new development, SailRock, is starting up. If your budget doesn’t quite stretch that far, Cooper Jack and Thompson Cove on Provo are two very promising bright stars of the future. Cooper Jack is an area still undiscovered and it offers some of the most stunning views of the Caicos Banks. Plans for a marina and condo project are in the works and lots start at $110,000. Many of the Thompson Cove lots have both views of the ocean and a canal slip
Capital Gains Tax and no Income Tax! Added bonuses include the bill that was approved in April last year by the Consultative Forum that lowered stamp duty for property sales under $3 million. It also allows buyers to pay their duty over a period of up to four years or offers a 10% discount if paid in full at the time of the sale. The new fees apply to all islands except North Caicos, Middle Caicos, East Caicos, South Caicos, Grand Turk and Salt Cay, which have a separate discounted scale. The past two years has seen TCI prove its strength as a growing tourist destination. The 2009 figures from the Turks and Caicos
Because in TCI, there’s absolutely no reason why you shouldn’t be building your own grand design and three definitive reasons why you should: No Land Tax, No Capital Gains Tax and no Income Tax! Added bonuses include the bill that was approved in April last year by the Consultative Forum that lowered stamp duty for property sales under $3 million. want to see a guaranteed annual return, especially if you opt for one of the larger condominiums, which have seen the average price per square metre moving down to US$4,500 from around US$7,400 two years ago. According to globalpropertyguide.com: “This is where one can find the best discounts and good selection. Currently mid to high-end condos are selling the best. The price range of US$1 million to US$3 million would be the most active category”. With the seven mile, awardwinning Grace Bay Beach in Provo on the doorstep of many resorts offering a set percentage of around 5% for buy-to-lets, you can relax and let them take care of it all for you; or if you really want to see some serious cash flow, join the big fish and snap up your own resort, like the one on North Caicos going for $35 million. Of all the outer islands, Pine Cay
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Newark that started in February this year, the islands have become more accessible to North American travellers and Westjet have commenced twice weekly flights from Toronto. There are also direct flights from the UK, including Virgin Atlantic and British Airways. According to the Turks and Caicos Tourist Board, last year saw a 97% increase in Canadian visitors. With a lot to choose from, I’m sure any decision is made easier
when the sun is nearly always shining, the average temperature is 83 F and there are miles of award-winning beaches on your doorstep. Not to mention the alluring waters, boasting the third largest coral reef system in the world, containing prized tropical fish, making it a premier beach and water sports destination. There’s plenty of opportunity in the Turks and Caicos Islands, place your bets please.
Having graduated in 2008 with a BA Honours degree in writing, Katie’s been focusing on three main things in her life: freelance journalism, property developing and globe-trotting. She first realised Turks and Caicos had something special when she started living and working there in early 2009 for a fishing charter company and hasn’t looked back since. She’s soon hoping to start calling it her second home, but until then she can be found restoring her Victorian farm house in Leicestershire, England.
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Islands tourist board showed a 12.8% increase in long stay and cruise arrivals from 2008 figures. This is helped by additional flights to the islands and approval for the expansion of the Providenciales International Airport. Statistics also show that the top markets for tourists were the USA, Canada and the major European markets. With Westjet, Jet Blue and US Air increasing their flight services, including new non-stop flights from New York, Boston and
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visitors from overseas are captivated by the relaxed ambience of the region and return to buy a home. Nothing has changed in geographical terms in the past two years, but the effects of global recession have obviously hurt the small island economies that depend heavily on tourism and in recent times on overseas investment in property. Rampant property development created a huge boom in the construction industry and fuelled by the insatiable appetite of cash-rich overseas buyers, it seemed like there was no end to the gravy train. But all that has changed and everyone has come down to earth with the proverbial bang! But in the final analysis what is missing from the economic picture in 2011? Yes, a few tourists have disappeared here and there depending on the destination, and of course the number of overseas property investors has dropped. The exact number will be difficult to determine and it will vary from location to location as historically most overseas purchasers in the Caribbean are buying a lifestyle not speculating on making a quick buck. Obviously there will be anomalies in this generalization and areas like the Bahamas and Turks and Caicos come immediately to mind, as they pitched their real estate sales to a US market based on high rental returns and quick capital appreciation. In contrast islands like St. Lucia, St. Kitts and Barbados sold a lifestyle and a
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The world economy remains uncertain in 2011 but the beauty of the Caribbean remains intact. And although the number of overseas investors has significantly dropped, that hasnâ&#x20AC;&#x2122;t deterred the millions of tourists who travel to the islands throughout the year on holiday. Wall Street fortunes come and go in the mysterious world of investment, international bank rates flicker up and down with uncertainty, and governments struggle to balance their finances in the face of escalating costs in the modern era. Stress is common in the workplace and the drudgery of everyday life in socalled developed countries has diluted lifestyles to the level of boredom. Little wonder the annual holiday is now looked upon with such relish, and little wonder more and more people are broadening their horizons and discovering the Caribbean. With over thirty popular destinations and hundreds of islands of every shape and size, there is a plethora of choice for the overseas visitor. The region extends as far north as the Bahamas just off the coast of Florida and as far south as Margarita Island just off the coast of Venezuela. Boundaries are flexible in the Caribbean area and it would take a lifetime to explore all that is on offer. Many locations are unspoilt and therein lies an inherent beauty that embraces lifestyles largely devoid of stress and pressure. You can live comfortably without excess and perhaps thatâ&#x20AC;&#x2122;s why so many
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Looking Around The Islands
second home where owners could either retire or simply spend more time in a beautiful location. The real test in time is whether buyers continue to see the Caribbean as an idyllic location as confidence in real estate investment has been tarnished worldwide. However, there are many experts in the property business who feel the Caribbean market will bounce back quicker than other areas of the world because people genuinely want to live here. So what is on offer around the islands and where should potential buyers look at in 2011? First and foremost everyone should do their own due diligence and complete as much research as possible on potential purchases. They should ignore speculative “guarantees” from developers and projected rental returns from projects that are either not built or relatively new. This is a market in transition and many developments are currently unable to sustain the guarantees they made and as a result owners have had to suffer the consequences. Rental returns currently reflect the downturn in tourism performance and offers of 10% return or 100% funding should be viewed with great caution.
Looking around the region here’s a quick update on what’s happening in real estate around the islands…
JAMAICA A beautiful island with magnificent geographical assets, but its image has been tainted by crime and drug wars in certain areas. Many overseas purchases are returning nationals or buyers who have connections with the island and understand the general real estate picture. There are beautiful properties all over the island and some attractive developments, but potential buyers must do plenty of research before committing to a purchase. “Location, location, location” is more important in Jamaica than in most Caribbean destinations, and this is reflected in purchase prices and general demand. Proceed with Caution!
TRINIDAD & TOBAGO Trinidad has also had its crime challenges and a dreadful number of murders that are mostly related to drugs and confined to certain areas. The economy is the richest in the Caribbean because of its natural mineral resources, but very few
overseas property investors will be attracted to the island because there are too many negatives. Some people may look at its twin island Tobago which has been the playground of many Trinidadians over the years. The “Robinson Crusoe” island with beautiful rainforest and idyllic bays was a popular property “Hot Spot” five years ago, but a couple of failed developments, the closure of the Tobago Hilton and an increase in crime has tarnished its image. Also, the government has recently introduced restrictions on overseas ownership and confined it to certain areas with a requirement to purchase a land license. Perhaps best to avoid Tobago at present!
BRITISH VIRGIN ISLANDS BVI is a very specialist niche area east of Puerto Rico and a popular centre for offshore banking in Tortola. There is superb sailing everywhere and many beautiful beaches, but property is expensive and exclusive.
US VIRGIN ISLANDS Obviously still a big hit with Americans and extremely popular
DOMINICAN REPUBLIC One of the great enigmas in Caribbean real estate, Dominican Republic shares the large island of Hispaniola with troubled Haiti. It has a population of over nine million people and some serious social and poverty challenges, but it also has stunning scenery, some excellent golf courses and exceptional real estate developments at relatively low prices. The old cliché that “it is too good to be true” applies to real estate prices in Dominican Republic and the fact that lenders don’t provide mortgages is one indication that the cliché has some merit. Most visitors tend to stay at the resorts and that has become the culture of overseas ownership.
ANTIGUA Another of the disappointments in Caribbean property “Hot spots.” With its 365 beaches and strong sailing tradition Antigua was poised to become a major attraction to overseas buyers, but a series of setbacks has tarnished its image. The demise of the ‘Allen Stanford Empire’ and some high profile crime propelled the island onto the world headlines for all the wrong reasons, and the government and local business have not responded to any great extent to address the negativity. Some high quality developments have been completed in Antigua and prices have dropped 10-15% to attract investors, but the developers and tourism chiefs need to mount a major publicity campaign to get Antigua back to where it was several years ago.
DOMINICA This lush tropical rainforest ecological gem hasn’t changed much in the last 100 years and although there is some property development it is minimal in the real sense. Land and property are relatively cheap, but you don’t buy
ANGUILLA Anguilla is barely 16 miles long and a few miles wide. It is flat and has numerous long unspoilt beaches. The population is only 15,000 and when the property boom took off it became the target of high profile developers. Unfortunately not all the projects have fulfilled their promise and their demise has tarnished the image of another of the Caribbean property “Hot spots’ of a few years ago. The island is situated close to St. Maarten and St. Barth’s and in time it should bounce back but right now there are better options for buyers.
ST. VINCENT AND THE GRENADINES The picture of a little sailing ship weaving its way through the Caribbean islands is very much the picture of St. Vincent and the Grenadines. It is a sailor’s dream and with over 30 small islands to explore there is surely something for every potential visitor who returns to buy. St. Vincent, Canouan and Bequia offer some attractive property options in idyllic settings and little wonder many of the international rich and famous have homes in these beautiful hideaways. And at the end of the day, that’s why the Caribbean will always be popular, because it is rich in beauty and it is a place where you can find peace and tranquillity and a home from home. After all, you are buying a unique lifestyle.
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An interesting mix of French and Dutch cultures but it works, and tourists love the difference. The island is barely 37 square miles in size and has a population of 85,000. Some property development has taken place, but it remains a popular cruise ship stop with visitors attracted to the beach and shopping in the Dutch sector and the lovely little bistros and shops in the French sector linked by a solitary manic road. St. Maarten has a lot of appeal, but perhaps not enough attributes to entice the purchase of a second home.
An island of great beauty and at one stage another Caribbean property “Hot spot,” but in the past few years Grenada has gone back in popularity, not least in the wake of the damage caused by hurricanes. Overseas buyers are looking at around 13% purchase costs and there is very little in urban development outside the capital St. Georges. Property development has taken place, but with moderate success and prospective buyers need to love the island and its laidback lifestyle rather than depend on high rental returns on their investment. Grenada is still a beautiful island, but “Proceed with caution” would be good advice to prospective buyers.
in Dominica unless you love its Eco culture as that’s is its greatest asset. Stunning waterfalls, deep forests and dark sandy beaches are complimented by a laidback relaxed lifestyle well suited to people who want to escape the drudgery of everyday life and get back to nature. If that’s suits your palate then Dominica could fit the bill.
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with the sailing community. It is easy to see why because all the islands are rich in natural beauty. St. Thomas has a magnificent natural harbour, which is arguably the most beautiful in the Caribbean, but St. Croix, St. John and Water Island are also gems. These markets have held their own largely because they appeal to a certain type of buyer and there has not been any over supply caused by rampant development.
Business & Finance The Caribbean is Recovering
Private Wealth Banking Explained
High End Property Will Always have Value Time To Buy and Time To Borrow The Villa Hotel Concept Ticks All The Right Boxes
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The Problem With Underinsurance
Villa Rentals Continue to Grow In Popularity
St. Kitts Takes The Lead in Attracting New Business STANLEY JACOBS
Borrowers Should Shop Around
Private Airlift Is Very Attractive
The Caribbean Market is Picking Up Insuring For The True Value
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The Caribbean is Recovering By and large the Caribbean Banking Industry has managed to remain resilient. This has been helped to a large extent by the lack of sophistication in the industry and very conservative lending policies and because credit expansion is based on deposit mobilization rather than on interbank or overseas borrowing. What are there any major areas of stress and how are banks responding to these? The slow-down of economic activity has led to a fall off in demand for new loans and increases in the non-performing loan portfolios of commercial banks. The increased perception of risk initially led banks to tighten their lending standards resulting in further slow-down in credit growth. Several banks have deployed strategies to support customers experiencing difficulty and are now seeing some fall off in the growth of non-performing loan portfolios and a general
return to normal lending practices is becoming evident in several Caribbean countries. What is your assessment of the level of demand for mortgage lending? Demand for borrowing is still very weak in the second or holiday home market. This is consistent across Barbados, the Bahamas, Grand Cayman, Providenciales and St. Lucia all of which have been buoyant second home markets for several years. Domestic borrowing for the construction of residential homes by nationals is beginning to see
There has been so much in the news on significant markdowns and loan losses on real estate loans in other parts of the world. What is the experience amongst banks in the Caribbean? Despite the growth in commercial banks nonperforming loan portfolios loan losses have continued to be comparatively low and very well contained by the sector. There is generally not a lot of unsecured lending by banks in the Caribbean. Most lending is secured by residential or commercial property and by and large we have seen little or no depreciation in market value except where particular sales are conducted under conditions of severe stress.
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some growth as consumer confidence rebounds on the notion that the worst of the recession is behind us. Several banks are also flush with liquidity and are enticing consumers back into the market with competitively priced deals coupled with attractive incentives.
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How are Caribbean Banks faring two years after the global financial and economic crisis?
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So says Rolf Phillips one of the top banking executives in the region
What is your take on the outlook for the remainder of 2011? I am expecting to see a steady pick up in personal loan demand during the year, but continued weak demand for commercial
borrowing. Inward investment into the Caribbean region has still not recovered and overall economic activity is expected to continue to be sluggish. The slowdown in the growth of nonperforming loans and the
expansion in personal loan demand should lead to an improvement in the performance of the sector over the previous year, but we will probably not see a full recovery until the second half of 2012!
Rolf Phillips is the Managing Director Retail, Wealth and Small Business of First Caribbean International Bank and has a wide experience of banking throughout the Caribbean region. Born in Grenada, he has spent the last ten years operating from Barbados, but travels extensively around the bankâ&#x20AC;&#x2122;s Caribbean network of branches. He is a visionary banker with an innovative and pragmatic approach to the everchanging world of banking. Rolf can be contacted at email@example.com
Private Wealth Banking Explained Scotia Private Client Group Financial Consultant Ben Crayston clarifies some of the mysteries of private banking and highlights its main features…
Many pote ntial custom ers are n ot aw a re o f P r i v at e W e al t h departments in a bank or have no idea wh at they do. Scotia Private Client Group provides private banking, wealth management and wealth structuring services to High Net Worth clients. What this means in practice is that we have a specialist Scotia Private Client Group centre in Barbados, which looks after the private banking and borrowing and investing needs of our clients. We also connect offshore clients with our team of experts in Scotia Trust in Bahamas or Cayman for their wealth structuring needs i.e.; for those clients looking to have their accumulated wealth managed and transferred according to their wishes for the next generation(s) of their family and to make special bequests. Our private banking services provide a personalized service to individual clients for their onshore and offshore banking needs as well as customized borrowing solutions tailored
We are therefore able to leverage Scotiabank’s local and international banking network to provide a coordinated, personalized banking experience and find alternative solutions through the one office.
W ha t i s t he t y p i c a l h i g h n e t w o r t h c us t o m e r t h a t y o u a r e t ar get in g?
around their requirements, all through one point of contact, namely their Private Banking Relationship Manager or Officer. We also have International Investment Advisors located at the same centre, which means the majority, if not all of a client’s financial needs, can be met through the one office. This also enables us to effectively coordinate teams of experts across the disciplines to craft individual solutions around the client’s unique needs. Of course, confidentiality and discretion are paramount in what we do.
Often our clients have varied income sources, for example from investments and selfemployment, as well as multiple financial needs including financing, asset management and estate planning. While the personal net worth of our clients ranges widely, typically they would have a net worth in excess of US$1 million. This higher level of average business with us per client allows us to keep a lower number of clients per Relationship Manager and provide the high level of service our clients deserve. We also look after Ultra High Net Worth clients who carry much higher levels of business with us.
Prov iding solu tions to banking needs sounds al l e mbracing bu t w h e r e d o e s th e b u l k o f y o u r b u s i n e s s fo c u s o n ? Our focus varies according to our client’s needs, which are determined from the outset through an in-depth consultation and then via ongoing reviews, at least annually, of their financial situation. For example; we have offshore clients who may be resident in Canada, the UK or Europe and are purchasing a
holiday home in the region, or a local/regional entrepreneur looking to leverage personal assets to inject capital into their business or a new venture. A r e y o u r s e r vi c e s a c r o s s t h e region and do they differ from location to location? Scotia Private Client Group Caribbean East is one of a network of 30 Scotia Private Client Group centres across the globe. While the overall service 80
model is built on a global “team of experts” model, there are local and regional differences which reflect the differences both in client needs and local regulations, which may impact service offerings in different jurisdictions e.g. currency control restrictions. Currency restrictions do not apply through the Caribbean East, hence we can offer International Investment Advisory services to residents there and our Investment Advisors frequently meet with
clients through those territories to fully service their investment needs. Can you provide the total banking package for a customer and does this differ for a non-resident and a Caribbean resident? Our private banking package also has certain differences for onshore and offshore clients, where onshore Barbadian residents are limited to onshore BDS$ accounts and BDS$ borrowing solutions. Our credit card offering also differs from those through retail, in that the Central Bank has provided Scotia Private Client Group with a preapproved USD25,000 annual travel allowance on our onshore MasterCard Black credit card, which allows our Barbadian clients a little more flexibility than on other cards. Clients offshore from Barbados can have both offshore and onshore private bank accounts, offshore in USD, CAD, GBP and/or EUR, and onshore in the local currency. We also provide USD mortgages to non-residents purchasing property in Barbados or the Caribbean East through the private banking package, and offshore clients obtain a USD MasterCard Black. W h a t a r e t h e a t t r a c ti v e f e a t u r e s of y our mortgage produ ct? Through Scotia Private Client Group’s private banking package
we are able to provide a higher degree of flexibility than what is typically found with a retail mortgage product. This means we can lend to the structures a High Net Worth client uses, like offshore personal holding companies, and we appreciate that many of our clients do not necessarily earn a salary through employment, but might have various income streams through different businesses. A deeper understanding of our clients’ wealth generation allows us to coordinate and craft a suitable solution to meet their needs.
Clients offshore from Barbados can have both offshore and onshore private bank accounts, offshore in USD, CAD, GBP and/or EUR, and onshore in the local currency. Looking into your 2011 crystal ball do you see a better performance this year than the past 12 months? We have experienced solid growth since inception and look forward to another successful year ahead.
Ben Crayston is a Financial Consultant for Scotia Private Client Group covering Barbados and the Caribbean East. He works with a team of experts in private banking, wealth management and wealth structuring to deliver the most effective solutions for each client’s unique circumstances. He graduated with a BA (Joint Hons) from Southampton University and has worked in financial services in England and Trinidad before moving with his family to Barbados in 2007. Ben has completed the Certificate in Insurance (UK), the Roytec/Advocis ‘Certified Financial Planner Education Program’ (Trinidad) and the Canadian Securities Course. He is also a committee member of the Barbados Association for the Correction of Learning Disabilities (BACLD), a charity that runs ‘the Learning Centre’, a school for children with learning disabilities in Barbados. 81
High End Property Will Always Have Value St. Kitts developer Scott Jaynes highlights the unique value that high end Caribbean property will always retain even in tough economic times.
weeks of the start of my land search, I discovered the perfect site on the St. Kitts Southeast Peninsula now known as Sundance Ridge. I knew immediately I had found the one true spot on St. Kitts that met any developer’s first criteria of “Location Location, Location!”
You feel in love with beautiful St. Kitts many years ago. Tell us why? When my wife Connie and I first visited St. Kitts back in 1997 we were taken by the natural beauty of the island. From the beautiful beaches to over 3000 foot mountains and their lush tropical rain forests. St. Kitts was much more scenic than any other Caribbean island we had visited. And, once we started interacting with local Kittians we were surprised by their accommodating spirit and openness. Coming from Oklahoma we were accustomed to dealing with pleasant people, but the people on St. Kitts are even more open and friendly. I am frequently in downtown Basseterre (the capital city) and smiles are the order of the day. People interact with each other by smiling, laughing, shaking hands, patting each other on the back, and generally enjoying each other’s company. What made you decide to become a developer?
Why did you decide to concentrate on the high end of the market? I’ve been in and around the real estate and construction business in one way or the other since 1971. After meeting a local developer our first trip to St. Kitts (who Connie and I built and purchased our first villa on St. Kitts from in 1999), and understanding the investment opportunity for real estate on St. Kitts, I decided I wanted to purchase a small parcel of land, build a few high end villas (including a larger villa for my wife and myself) and then build a few other custom villas for other island lovers. Within two
The villa we first built at Half Moon Bay Villas was a wonderful example of high end in the late 1990’s but not high end on a world scale. With increased commercial jet traffic to St. Kitts after the Marriott Hotel opened in 2003 I also noticed a dramatic increase in private jet traffic to the island. People who travel in private jets, as well as those who travel 1st class on commercial airlines typically want the very best. St. Kitts did not have a world-class offering so Sundance Ridge has filled the gap with a prestigious high-end development.
What are the special features of Sundance Ridge? Obviously the location is spectacular with panoramic views from every building site, but we also have a standby electrical generating backup system to provide electricity for all villas in the event of power loss from the grid. All electrical lines are underground. The development is gated to restrict access and provide increased privacy. The concrete streets are illuminated at night with low-level street lighting to allow owners to experience the spectacular night sky. We design cistern-holding tanks in each villa, as a backup water supply in the event there is an interruption from the plentiful government supply. We have fiber optic communication lines directly to each villa that currently provide over 80 cable TV channels (and more being added all the time), high speed Internet and telephonic communications.
Sundance Ridge villas are high end so we generally only see upscale buyers looking in the price range of US$2.5 million up. Last year the volume of interested buyers was not as high as we had hoped for but we understand the current times and we are very optimistic about the future. Our product is very special and we have only eight building sites remaining so prospective buyers will come from a small select niche group. Are there any incentives on offer to induce high net worth overseas investors to St.Kitts? St. Kitts and Nevis offers Economic Citizenship for real estate buyers who invest a minimum of US$350,000 on property in designated villa developments. The Estates on Sundance Ridge has been included in this program. The program provides qualified investors the opportunity to apply for St. Kitts citizenship (which may afford investors significant tax incentives depending upon their individual tax situation). Multiple family citizenships may be approved based on investment in Sundance Ridge. No personal income tax and very low property tax rates on St. Kitts are also attractive incentives for investors. Is Sundance Ridge an exclusive lifestyle or a smart property investment?
Being a gated upscale community, Sundance Ridge affords the affluent investor a stunning geographic location, a villa custom built to their personal wishes, coupled with living on one of the most beautiful islands in the world. From a pure investment standpoint, property values on St. Kitts are expected to increase dramatically over the next decade. St. Kitts real property is priced significantly below comparative properties on nearby islands simply because St. Kitts is still a relatively unknown destination. As word continues to spread about St. Kitts, property values will increase and investors who purchase at Sundance Ridge soon should enjoy significant upside potential. Is St. Kitts a hidden Caribbean treasure and Sundance Ridge the potential treasure chest? Many people describe St. Kitts as an unspoiled bright spot in the Caribbean. After visiting most other Caribbean islands I would agree. It is always wonderful to return home to St. Kitts and Sundance Ridge. St. Kitts has a population of only 33,000, which is far below that of neighboring islands. It is not congested and it promotes the laidback relaxed island lifestyle that so many upscale investors are looking for. After all, when we think of the Caribbean we always associate it with laidback! What could be better than a laidback lifestyle that offers significant investment appreciation? Thatâ&#x20AC;&#x2122;s my kind of treasure!
In a word BOTH!
Scott Jaynes is an American developer living his Caribbean dream in the lovely island of St. Kitts. A very experienced real estate businessman from Oklahoma Scott and his wife Connie take an active part in the local community and their home at Sundance Ridge is a wonderful advertisement of this prestigious project. Scott can be contacted at firstname.lastname@example.org 83
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Those unique and discerning individuals who truly appreciate the finer things in life and have the means to acquire them. When I took my first steps on what is now Sundance Ridge on top of the Southeast Peninsula I knew immediately I wanted to market to high-end buyers and give them an opportunity for a custom-designed upscale villa investment opportunity and experience. Our goal is developing â&#x20AC;&#x153;fine villas custom designed for the best in island living.â&#x20AC;?
Your price points are at the top end of the St. Kitts property scale. how has your market been affected in the past 12 months?
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Your development is small, exclusive and set in an amazing location. who are you targetting?
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Time to Buy and Time to Borrow Thatâ&#x20AC;&#x2122;s the advice from Caribbean mortgage broker Clarence Hiles as he answers some key questions in a very different market than a few years ago.
How active is the mortgage market in the current economic climate? Mortgage business is a direct product of property sales so when the market took a nosedive then so did the volume of mortgage business. Every location across the region has been affected and while lenders have adapted to local mortgage business with improved product and incentives, the non-resident mortgage product remains much the same. Have lenders tightened up their lending criteria? In general terms yes, but the credit crunch culture has now been with us for almost two years so new benchmarks have been established to reduce risk. The most important issue is that Caribbean mortgages are still available for non-residents and although the lending culture is very conservative, this has always been the case. Lenders expect purchasers to inject at least 30% equity into the sale and this spreads risk and displays commitment from the borrower.
Is deliquency a major problem in Caribbean lending?
Are there different terms and conditions for different locations? Yes there are. Obviously lenders have first-hand experience of each location from their general retail operations on the ground so they can assess and evaluate risk in different islands. This means the loan-to-value may differ from island to island, and in some instances the interest rate mechanism may also be different. Lenders have also factored in delinquency levels and economic recovery into their lending policy, so obviously the markets that have shown improvement over the past 12 months are generally the areas that can offer the best mortgage packages. 84
Delinquency is a problem in the lending industry all over the world. It comes with the territory. The levels in the Caribbean have certainly increased over the past 12 months, but they are not relatively high because the lending culture has always been very conservative. Most of the problems with the non-resident loans have been due to external problems and reduced income for overseas property investors, plus the non-delivery of projected earnings from rentals. This is why lenders will not adopt any Buy-to-Let schemes and insist on borrowers having independent income to support the loan. Are overseas buyers at the table? The real estate market is coming to terms with a new environment and in some instances it has reduced price points and offered incentives to attract investors. Obviously the number of investors has dropped significantly, but every market bottoms out in a recession before
operating within this culture and quality rather than quantity remains the major priority. This can be frustrating for mortgage brokers and borrowers as Caribbean lenders will eventually need to “look outside the box” and build a better understanding of their prospective new customers rather than take a stoic stand behind tight regulations and regimental structures that are out of touch with modern business practices.
it starts to rise again. There are signs that this is slowly happening across the region, but it varies from location to location. This is very much a buyer’s market and the smart investors will seize the opportunities. The really smart investors will do it with a mortgage because interest rates are low and they don’t have to tie up all their liquid assets. Are the current mortgage terms atractive? Yes, in most locations. When you can borrow up to 70% Loan-toValue at interest rates around 4% over 20 to 25 years that is still an attractive mortgage package. Obviously the interest rate varies from island to island, and so does the LTV, but overall the terms are still good. Some prospective borrowers complain that the terms and conditions are much
tighter than back home, but this is comparing apples and oranges. If you want to borrow in the Caribbean then you have to meet the criteria of the Caribbean lenders. Who can fault them for being cautious after watching the demise of the US and the UK lending markets in the past two years? Have Caribbean lenders moved with the times? We have all seen an amazing transformation in banking over the past two years, which has rocked the confidence of every investor and prospective customer. The events will never be forgotten by this generation, and since many of the faults came from within the banking industry it was inevitable that all lenders would adopt a cautious approach going forward. We are still 85
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PHOTO COMPLIMENTS APES HILL CLUB
It should be clear from the responses above that the Caribbean region is not the same as the mature overseas mortgage markets and it takes some expertise and local knowledge to fully evaluate its facilities. Obviously some non-residents may feel they bring that expertise to the table and go direct to a lender, but they run a bigger risk of being declined, getting the wrong product, and spending a lot of their time and resources managing the process. Caribbean mortgage brokers interact with Caribbean Lenders on a day-today basis and they have a solid working knowledge of their product range and the culture of the various lenders. They are the experts in the industry and they have the ability to meet the customer’s financial objectives by placing their interests at the top of their priorities. They can also decline mortgage applications that don’t meet the criteria and therefore save everyone a lot of time and resource from the outset. The broker’s fee is modest set against the benefits that are available, and in many instances sourcing the right product can save the fee. Never has the role of the Caribbean mortgage broker been more important than today!
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Are mortgage brokers value for money these days?
The Villa Hotel Concept Ticks All The Right Boxes says Silver Point Villa Hotel developer Roger Collins. But how has the economic meltdown in the past two years affected this innovative real estate investment product?
What exactly is Silver Point Villa Hotel? It is a real estate investment within a hotel operation and in many ways it ticks all the right boxes for the savvy modern investor. Most overseas property purchasers are attracted to a location and its lifestyle, but they have limited holidays so managing the long periods of non-occupancy is a major cost and concern. Also the traditional condo developments usually offer nothing more that a common swimming pool so the property is either locked up for most of the year or property professionals have to be employed to manage and rent the unit. In contrast Silver Point Villa Hotel allows owners six weeks occupancy with all services and bills paid from the rental pool plus a dividend at yearend. The complex also offers all the normal hotel features including a fine dining restaurant; shop and in due course we will add our spa and fitness suite.
And of course we have a magnificent location on one of the most beautiful beaches in Barbados. Who are you attracting? We are targeting property investors with a visionary and pragmatic approach to an overseas property investment and investors who simply want a Return on their Investment with reduced risk. Overseas property investors normally want a lovely location, a place where they can
enjoy sunny holidays, and complete comfort that their property is safe and being looked after. Silver Point covers all these objectives and in addition to marketing the property and ensuring it earns income, all the bills are paid including replacement and maintenance of the furnishings. The straightforward investor has the same peace of mind and if they donâ&#x20AC;&#x2122;t want to use the six weeks then they can rent them privately or allocate them to friends or simply leave them in the rental pool. How has the operation been performing to date? The hotel has been open for just over three years and we currently have 59 rooms in operation. Another 20 rooms will be added to the pool when they are fully renovated and refurbished down the line. The hotel operation has been doing well and www.tripadvisor.com is a good barometer of how hotel guests feel about our operation.
Business Sometimes it doesnâ&#x20AC;&#x2122;t work out for a few guests but overall the vast majority love Silver Point and take the trouble to tell everyone. Sales effectively started in late 2010 and we expect to complete the sale of another 30 units during 2011.
challenging times. Obviously the drop in visitor arrivals has a knock-on effect on real estate sales and hotel bookings, but Silver Point has actually increased business over the past 12 months as more and more people have
increase our level of occupancy during the quieter months with marketing and innovative attractive short-stay packages. We have just completed the spa and hope to complete the fitness suite later in the year. Silver Point is at an exciting stage in its evolution and we are already benefiting from a high number of repeat visitors, some of whom love the watersports facilities at Silver Sands Beach, our magnificent setting and the home of kitesurfing and windsurfing on the island. Are mortgage facilities available? Yes we have attractive mortgage facilities available where overseas investors can borrow up to 70% of the purchase price at rates around 4%. Local buyers can obtain a higher LTV. Can you give any potential return on investment (roi) figures?
What are the price points? Entry price points start at just under US$200,000 and rise to US$525,000 for our best twobedroom beachfront unit. Set on an excellent beachfront location in Barbados the freehold real estate element alone represents a great investment opportunity, but prospective buyers should look outside the box and assess the many other attractions that make this purchase special in the modern world. And how has the recession affected this type of purchase? The global recession has affected property investment and tourism all over the world but Barbados has held its own in these
enjoyed our product. Silver Point investors have therefore seen good occupancy levels and will expect to see a tangible return on their investment at year-end. In contrast many condo units in developments are unoccupied due to over-supply and the owners have to meet ongoing overheads from their own resources. We can therefore safely say our product is better equipped to meet the challenges of the current recession than the conventional condo unit, and prospective buyers should be cognizant of the lower risk with a villa hotel unit. Whatâ&#x20AC;&#x2122;s happening at Silver Point in 2011? The project continues to thrive and during 2011 we hope to
There is always a temptation to quote impressive figures to attract sales and of course there is the added risk that you fail to live up to your expectations and therefore create the wrong relationship with investors. We have learned from experience and we have watched with interest other projects offer high returns to get business, but at this point in time we feel the honest approach is to run an operation with efficiency and initiative and for everyone to share in its success without the pressure of having to meet a particular benchmark. Silver Point is operating well and we expect to produce good performance, levels for our investors at the end of the year and to provide them and our guests with a superb boutique hotel at all times.
Roger Collins is a director and developer at Silver Point Villa Hotel and has wide experience in local business. He is also a co-owner and director of Vision Marketing, one of the top advertising agencies in Barbados and Barbados Living, a local real estate company. Roger can be contacted at email@example.com 88
The Problem with Underinsurance Sanjay Amin FRICS ACIArb - BCQS International
“Do not underestimate the importance of assessing the actual rebuild value of your property for insurance purposes and ensure that your home and/or business is as well protected as it should be.” In the months leading up to June, with the uncertainty of the impending hurricane season, now is a good time to make sure that your home or business premises are insured sufficiently, against not only hurricanes, but also against other perils such as earthquakes and fire. It is true that Barbados has not had a “real” hurricane for over 50 years and is in a more sheltered position than its northern Caribbean neighbours in terms of the frequency with which serious storms strike. However, with the passing of Hurricane Tomas last year, we need to be reminded that Barbados is susceptible to extreme weather conditions. On an even greater scale, the recent earthquake in Haiti not only resulted in tragic loss of life, but also caused untold damage to buildings, very few of which are
likely to have been insured. In July 2009, BCQS International represented by myself went on a voluntary mission to Haiti sponsored by the Royal Institution of Chartered Surveyors and found that the implementation of Building Codes was woefully lacking; not only were they insufficient, but there was very little evidence of the enforcement of any building codes at all. Unfortunately, the earthquake struck before any such codes could be put in place. There is, however, no question that robust and properly enforced building codes could have saved a lot of lives, and kept people in their homes. Furthermore, proper insurance of these homes
and buildings could have helped the rebuilding of Port-Au-Prince. Instead, Haiti is forced to rely upon international aid partly due to the pre-existing economic situation and partly due to the massive scale of the disaster. Damage caused to individual buildings as a result of earthquakes or hurricanes here in Barbados is unlikely to be the subject of such massive aid, and therefore owners here need to protect themselves and make sure that the full reinstatement cost of their building is reflected in their insurance policy. The failure to cover this full amount is known as underinsurance. Underinsurance is when a building is insured for a lesser amount than the current rebuilding cost, this in turn means that the insurance premium paid is not representative of the actual risk, nor is it sufficiently contributing to the insurance premium pool used to help pay for losses. This may save a building owner money in the short-term, in terms of the payment of a lesser premium as a percentage against an artificially low amount, but even the lesser
amount that is paid may be wasted money should a claim become necessary. Underinsured properties are subject to the insurance industry’s Condition of Average Clause, which in essence, reduces the claim according to the percentage of underinsurance, relative to rebuilding costs. To keep the maths simple, let’s just say that you decide to insure your building for $500,000 but in reality it should be insured for $1,000,000. You then have a fire at the property which although is not that serious, the insurance company decide to appoint a loss adjuster to visit your premises to check on the claim details. After viewing your premises, he calculates that your correct sum insured is the higher amount $1,000,000. If the cost of your claim comes to $100,000, you are likely to see a reduction in the amount you will be paid to $50,000 less the deductible on the policy. Thus your claim is reduced in direct proportion to
the amount of under insurance. In practice average clauses are not applied to claims where the amount of under insurance is small, however if the amount is large or look deliberate, you could have problems. As is often the case, owners do not necessarily know that they are underinsured until they make a claim. This is usually because they are relying upon out of date information or are not getting the right advice regarding the value of their property. In 2008 for example, the island of Grand Turk in the Turks and Caicos Islands suffered 85% damage to its buildings, the majority of which were either underinsured, or in many cases, not insured at all. This not only left people effectively homeless and left businesses without premises, but it also left people unable to service the very loans against which the enjoyment of their property or the income generated from it was relied upon to repay that debt. 91
The best way to avoid underinsurance is to have a property assessed every two or three years, and to insure for the rebuilding cost as appraised. The above example demonstrates why prudent funding institutions protect themselves by including a clause within their terms and conditions that the reinstatement cost of the buildings against which they loan funds is assessed by a qualified Appraiser or Surveyor, and that the resultant sum of that appraiser’s /Surveyor’s report is insured by a reputable insurance company. The funder will generally also require that the borrower throughout the life of the loan demonstrate annual evidence of the coverage. The best way to avoid underinsurance is to have a property assessed every two or three years, and to insure for the rebuilding cost as appraised. In
between appraisals, sums insured can be increased by an inflation factor, which should form part of the property appraisal. Adjustments should also be made for any improvements made to the property. The appraiser would calculate a rebuild value based on a current day construction cost to replace the building like for like. Such a calculation requires a full site inspection and a measure of the size of the building. Experience of construction costs within the particular jurisdiction is fundamental, as well as experience of the vagaries of types of building use, and any structural or architectural nuances. The resultant sum would include not only the rebuild value, but also an
allowance for the demolition and removal of any remaining damaged structure, as well as an allowance for the professional fees required for the rebuild, such as the costs of appointing an Engineer, an Architect and a Quantity Surveyor. Such valuations generally do not include any loose furniture or other unfixed contents. As we have seen, the onus for insuring oneâ&#x20AC;&#x2122;s property correctly is on the Owner, and not as one may suspect, on their insurance company, nor on their lending institution. As previously mentioned, a diligent financier would demand that any loan against their security, (which is usually the subject of the loan itself, i.e. the property), is covered by adequate insurance for the full
The best way to avoid underinsurance is to have a property assessed every two or three years, and to insure for the rebuilding cost as appraised. cost of reinstatement. However, in the event of an unleveraged property, it is often the choice of the individual owner, as to whether their property, and therefore their financial security remain at risk. We would recommend that the individual follow the lead of the Funding Institutions, and protect themselves with adequate insurance, rather than carry the risk of the possibility of financial loss in the future.
Sanjay Amin is a Director of BCQS International, a property and construction cost consultancy, who provide Valuation, Quantity Surveying and Project Management to individuals, financial, commercial, and governmental clients. Mr. Amin is a Fellow of the Royal Institution of Chartered Surveyors (RICS), a 140,000 member organization representing property interests worldwide as well as an Associate of the Chartered Institute of Arbitrators. He is also a member of the RICS Caribbean Board. You can contact him at firstname.lastname@example.org or for more details on BCQS, view the website at www.bcqs.com 92
Villa Rentals Continue to Grow in Popularity Judith Wilcox is the new Head of Business Development at Bajan Services and she provides an interesting insight into how villa rentals are changing the face of tourism… You bring a wealth of customer service experience in the Caribbean to your current role. Has it been a benefit to have worked in the tourism industry prior to joining Bajan Services? Coming from a customer-focused organization has been a great help. Holiday home rentals are very much like airline seats – a highly perishable commodity where today can’t be sold tomorrow! In aviation we focus as much on the future picture as the past performance and this is perhaps a new emphasis for the business. We use this to be tactical on a short, medium and long term basis highlighting properties, or property segments that need additional marketing support or distribution through specialist channels to drive the occupancy. It also serves as a benchmark for our core marketing strategy which is very much web weighted, allowing us to continually evaluate and adjust our emphasis including using alternative or supplementary media and distribution channels to best effect as is common in aviation. At the same time, Bajan Services
What is the scope of your current role and is it an advantage to come from a non-traditional real estate background?
Services has the right portfolio of rental properties and that they are being promoted and marketed in the most cost effective and appropriate way. As ‘Brand Custodian’ I also support the Real Estate team in their marketing activities and communications plan. It has been interesting to be the ‘new eyes’ in the team and ask questions from an Owner, Customer or Commercial perspective –I have definitely found that the objectives are not always aligned which has led to some interesting discussions! My Virgin Atlantic DNA is hard to deny in that I believe top performing brands deliver on their promise and that’s what all of our business areas are aiming to achieve. I think it has been a big advantage coming into the real estate business with a ‘Brand’ ethos and I have only referred to guests as passengers on a couple of occasions so I think my reprogramming into the real estate and rental world has also been successful!
My remit as Head of Business Development is to ensure Bajan
Villa Rental figures have been increasing at a time when hotel
recognizes that we are in the tourism business and effectively running 100 or so micro-hotels. Our Operations Manager comes from the Hospitality industry and has brought in practices and standards from that industry which has improved the Guest experience and been beneficial to the Owners in many respects –such as in terms of consistency and efficiencies, turnover of staff and also cost.
Bajan Services has undergone a transition in recent years- partially as a result of the extraordinary trading circumstances that resulted from the Global Economic Crisis but also from a new Management Leadership Team who updated the commercial focus and business discipline to articulate a corporate vision –“Fulfilling Dreams through Owning or Renting Holiday Homes.” Our three core products –Real
Some people regard them as two of the same. As a general rule we prefer to rent homes that we also manage; that way we have much more confidence in how the guest is likely to experience the property and the staff. Our Owners appreciate our expertise in both of these fields and know there are many advantages to leveraging the combination of Property Management with Rentals. Whether we do property management, rentals or a combined service we are both competitively priced for each of these and more importantly we are effective. We believe that property management is about perfecting the business of Holiday Home Management so that guests and
Can villa owners get a reasonable Return on Investment in the current climate? It is important to recognize that many people buy holiday homes for lifestyle reasons and as such Return on Investment (ROI) is secondary. By renting their homes we help them reduce or eliminate their running costs. This way they can own and enjoy their home with little cost other than the cost of capital. In the long term the real return on investment comes from the capital gains. This is the area that Barbados has consistently delivered on. Property sales are quiet in the current market. Do you envisage much change in 2011?
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Villa owners have a reputation for being demanding but Bajan Services is recognized as one of the best firms in the business. What makes your firm so special?
Do Property Rentals and Property Management go hand-in-hand in the business?
owners can have a perfect home for the holidays!
The good news is that viewings have increased dramatically. Beachfront stand-alone villas are still in high demand, and as such have seen little price adjustments. In addition, areas such as Sandy Lane on the West Coast are rebounding nicely. We think it is a great time to buy, as the value proposition is better than it was three years ago when different market forces were in place. Bajan Services is acknowledged as a major firm in Barbados. What property services and products do you offer across the region? Through our relationship with Terra Caribbean we link into Grenada, St. Vincent and the Grenadines, Trinidad & Tobago. We are also consulting on several developments in the regions where our rental and property management expertise is required.
Judith Wilcox made a significant impact in Caribbean business as the vivacious regional manager of Virgin Atlantic from 1998 until 2008 as she spearheaded the airline’s entry into seven Caribbean islands. She has since made a career switch into real estate and resort management including a year in Antigua. She has now joined leading Real Estate Company Bajan Services as Head of Business Development based in Barbados. Judith can be contacted at email@example.com
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I think that finally the message is getting out there that villa rentals are GREAT VALUE FOR MONEY! The figures speak for themselves as the product offers not only fantastic value, but also high quality. If I can achieve anything it will be to spread the word that private villas or holiday home rentals are not only for an exclusive elite. Visitors are becoming much more sophisticated in their tastes and they are always looking for a more authentic experience and a villa stay offers so much more with an enhanced degree of privacy, luxury, comfort and spaciousness that is not the hallmark of traditional lodging accommodation. One of our new marketing taglines is “Why limit yourself to just one room when you can have the whole house?” If you want a pool party at midnight, or breakfast at midday, then a villa is the place for you!
Estate, Property Management and Holiday Rentals- have experienced and committed staff matched by our hardworking ‘Behind the Scenes’ team –Finance and Human Resources who take care of the numbers and the staffing issues. Each of our Properties are mini businesses in their own right and we consider each one in this context; we provide timely and detailed information on the revenue performance of the property and also offer advice on how to contain or reduce overheads by using our knowledge, experience and ability to make comparisons with other similar properties. Owners have very different motives for being in the rental business so we seek to understand this and try to manage expectations accordingly!
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bookings have been declining. What has created this development?
St. Kitts takes the Lead in Attracting New Business Stanley Jacobs is the director of Investment Promotion at SKIPA and he gives a detailed insight into a visionary government initiative for investorsâ&#x20AC;Ś
What exactly does your Agency do? Our objective is to promote St. Kitts as the ideal place to invest. SKIPA was established to help investors; both local and foreign get their business established in St. Kitts more easily and swiftly. Essentially, we act like a one-stopshop for investors, assisting them with licenses, permits and approval of their project. We navigate the bureaucratic waters for the investors by liaising with key Government Department impacted by the investment to reduce the amount of time it takes for the business to get established and thereby saving the investor time and money. At SKIPA we also provide aftercare services for businesses that are already established. Our aftercare services reflect our belief that it is not enough to assist in the establishment of new businesses, but we must provide support for established businesses as well. We measure success at SKIPA by the success of the businesses that operate in St. Kitts. Aftercare services may take the form of expansion facilitation, consultation services or procedural review. Firms can access aftercare services by contacting SKIPA and
presenting the situation that they are facing; i.e. expanding, general information, procedural issues and so forth. We review the case, consult with other government departments if necessary, and provide options for the business. Another area of focus is policy advocacy. Advocacy is a form of customer advice and the ultimate goal of policy advocacy is to enhance the investment climate in St. Kitts by building on our comparative advantages and eliminating obstacles that retard investment. Are you a government information service for St. Kitts? Yes We know a lot about the general attractions of St. Kitts, but what are the business attractions and investment opportunities? 96
St. Kitts represents a new landscape of investment opportunities. With the closure of the sugar industry in 2005, St. Kitts now has an abundance of raw land for development. The Government has a favorable attitude towards investments that have a positive impact on the citizens. In an effort to encourage such investment the Government provides generous incentive packages. Tax incentives can be in the form of exemption from import duty on materials for approved projects, Tax Holidays of up to 15 years and export incentives. The Government has designated areas in St. Kitts where foreign investment in tourism is incentivized under the Hotel Aids Act. The Law allows for exemption from import duty on material, waiver of Withholding Tax, Tax Holiday of 10 years for the refurbishment or construction of a hotel with 30 or more bedrooms and 5 years for hotels with 10 to 29 bedrooms. These areas include The South East Peninsula, Frigate Bay and the Whitegate Development area. Incentives are also available for enterprise engaged in manufacturing and processing. Enterprise can obtain Tax Holidays
Given the complexities in getting enough information to make a professional assessment of the business and investment opportunities on the island, can you offer a complete information service to a potential investor? Yes. Market research is a critical function of SKIPA. Market Research entails the gathering and analyzing information that is related to a specific market or marketing objectives. At SKIPA, we have a database of information that investors would find useful. Costs are always an issue with investors. Is the cost of doing
The cost of doing business in St. Kitts is below regional scales. According to the World Bank’s ‘Ease of Doing Business Report’ the cost of starting a business in St. Kitts is 11.3 % of income per capita, whereas the average cost for Latin America and the Caribbean region is 36.2 %. Currently, St. Kitts is reviewing a number of procedures in the steps to starting a business, which will improve our global ranking and reduce the cost of starting a business to the investor. Does your agency charge a fee for your services? No. The services provided by SKIPA is free of charge. How has the global economic downturn in the last two years affected the island and how do you see the immediate future? In relation to investment projects, it is safe to conclude that St. Kitts was spared from the negative effects of the global economic crisis. If fact, a number of large construction projects such as villas and condominium continued to progress throughout the global crisis albeit sales slowed down during the period. The economic outlook for St. Kitts is positive. The economy is predicted to experience positive growth in 2011 albeit slower than before the crisis. Prior to 2009, the country experienced five consecutive years of positive growth with an average growth rate of 4.8 % pa.
Stanley Jacobs is the Director of Investment Promotion at the St. Kitts Investment Promotion Agency (SKIPA). His responsibilities include; raising the profile of St. Kitts in the International Investment Market, marketing St. Kitts as the ideal place to invest and increasing the amount of Foreign Direct Investment into St. Kitts. Mr. Jacobs, a graduate of Plattsburgh State University in New York, and past Lecturer at the Clarence Fitzroy Bryant College, has over twenty years of experience working in the private sector. Stanley can be contacted at investmentpromotion@stkittsipa 97
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The Government has identified six key pillars for attracting investment, namely; Tourism, Financial Services, Information Technology, Agriculture, Light Manufacturing and Offshore Educational Services. Tourism is the cornerstone of St. Kitts’ economy. The cruise ship sector in particular has experienced tremendous growth in recent years with passenger arrivals topping 500,000 in 2010. More so, the construction of the 636 rooms St. Kitts Marriott Resort has propelled St. Kitts to the forefront of resort destinations. Add to this an extremely service oriented labour force. In the area of Financial Services, St. Kitts caters to small closely held companies. The 1996 Companies Act introduced the concept of a company, which qualifies for tax exemption status, provided that it conducts business only with persons not resident in the Federation. These companies are referred to exempt companies. Our products include Limited partnerships, Trusts, Foundations and Captive Insurances. St. Kitts is also committed to the development of its IT sector. St. Kitts boast one of the most technologically advanced telecommunication system in the world and ranks well above the Caribbean and
business or relocating to St. Kitts expensive?
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Does your Agency specialize in particular business sectors or do your offer advice in all business sectors?
Global Scales for Internet usage. Renewed emphasis has been placed on agriculture following the closure of the sugar industry in 2005. The Government continues to make more land available for agriculture development. The native soil is ideal for agricultural production; it is fertile, well-watered and has adequate drainage. The Government’s tax incentives policy for the manufacturing sector is now paying off. Currently St. Kitts is the leading exporter of manufactured goods to the United States in the O.E.C.S. and Barbados. Goods currently manufactured include lighting controls, resolvers, electronics and garments. Additionally, St. Kitts is home to a growing number of offshore universities. Currently, there are six accredited offshore medical schools on St. Kitts with total student population of approximately 2500. In services, offshore education is one of St. Kitts’ leading growth sectors.
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of up to 10 years along with exemption from import duties on components, equipment and other goods used in the manufacturing process and the operation of the business.
Borrowers Should Shop Around Senior Lending Manager Winston Inniss of Globe Finance Inc. highlights lending options outside the main retail banksâ&#x20AC;Ś
We have just come through a tough time for lenders across the world. How has Globe Finance Inc adapted to the changing environment? Times have certainly been tough all around and we recognise that it cannot be business as usual with job losses and reduction in income being so prevalent. We have had to be patient with certain customers and in some cases restructure facilities in order to make payments more affordable. Our policy is to work with customers and we only take legal action in extreme cases. What financial services does the company offer? We offer a wide range of financial services similar to commercial banks. Additionally we are in the business of vehicle leasing, which forms a large part of our lending portfolio. Our products include personal loans for such things as vehicles, home improvement, debt consolidation, education, land and some mortgages. We also provide various kinds of commercial financing with the exception of overdrafts.
What can Globe Finance Inc offer that traditional lenders cannot offer?
Do you operate down the islands or solely in Barbados? We currently operate solely in Barbados. Obviously you are not in the market for large loans so what is the typical customer that Globe is looking to attract? It is not correct to say that we are not in the market for large loans. Traditionally we have attracted lots of customers looking for personal financing, especially vehicle loans. But we are in the business of lending and we are not limited to any particular type of customer as long as the loan meets our lending criteria. 98
In terms of products we operate in similar areas, but we offer a speedy turnaround time and this continues to give us a competitive advantage. Additionally we have a great bunch of people working with us whose main focus is customer satisfaction and we go the extra mile to ensure that the customerâ&#x20AC;&#x2122;s experience is as pleasant as possible. In many ways we operate as personal bankers. Is the Globe strategy to stay in commercial lending or do you see the company moving into private finance and domestic mortgages? Is the Globe strategy to stay close to private financing or do you see the company moving more into commercial lending and domestic finance? Currently the majority of our lending is private financing, although we do a few domestic mortgages. This is mainly because our maximum lending term is fifteen years and this tenure would not satisfy most mortgage seekers. However, for
those requiring a shorter-term mortgage, we are more than willing to provide financing. We have not been very active in the commercial market in the past, but we are now looking to expand in this segment of our portfolio and promote the company as an all-purpose lender. How has your lending experience suffered in the past two years because of economic downturn? Like most other lending institutions we have been affected by the global recession. This has been apparent in the reduction in the number of applications received as uncertainty has prevailed in the market. The recessionary period has also affected our delinquency, which has increased over the past two years as a result of unemployment
and a reduction in working hours. However, it appears to have improved in the early part of 2011 as the number of loan applications has started to increase. Who owns Globe Finance Inc? Globe is owned by Sagicor Life Inc, Goddard Enterprises Limited and Sagicor General Insurance Inc. Your lending rates appear higher than conventional lenders. Is this a problem in attracting new business? We consider our rates to be competitive and we have no problems in attracting new business. Admittedly there are some categories of financing where we have charged a higher rate of interest but this is usually
because of the risk involved. In general terms, we believe our rates to be on par with other lenders. Obviously Globe Finance has a special niche in local lending. Has the company any expansion plans? We intend to continue on our growth path by expanding our existing portfolio while looking for new and innovative financial solutions to meet our customersâ&#x20AC;&#x2122; needs. During this year we will be more visible in the market place as we recognise that we are still known primarily for personal lending and more specifically vehicle financing. Our challenge is to change this perception and we propose to achieve our objective by more aggressive marketing of our commercial products.
Winston Inniss is the Senior Lending Manager with Globe Finance Inc. based in Barbados. He has been in commercial lending most of his career and was previously employed at one of the retail banks in Barbados. Winston can be contacted at Winston.firstname.lastname@example.org 100
Private Airlift is Very Attractive Managing director of SVG Air Paul Gravel answers some of the key questions about private airlift within the region and presents a good business argument for wider use…
Operators Certificate, four BN2 Islanders, 2 Citation Jets and a Cessna Businessliner, which is usually used for Medovac services.
SVG Air has been around for over 20 years now and although we see your airplanes in the sky not everyone knows about your services and background. What is the company’s culture and where do you operate? SVG Air operates out of St. Vincent and the Grenadines, Grenada, Barbados, and St. Lucia, with a new Joint Venture in Antigua–Barbuda to replace the gap left by Carib Aviation closure. The company was predominately a charter airline, but circumstances have resulted in a shift in the way it operates. Starting with a single aircraft the company grew to a fleet of nine planes. Although it always focused on the high end of the market, there seemed to be a need for seat sales and this resulted in the fleet being configured differently. Some of the smaller planes have since been sold and replaced by Twin Otters and two corporate jets.
Do you target elite businessmen and high net worth individuals as your main customers?
Barnard and Gravel Family (their in-laws). Managing Director Paul and wife Joanne Gravel along with her father and Chairman Martin Barnard have been the key people over the years. The Company has also received significant support from several High net-worth Individuals and companies who have interests in the region, and without their support and patronage we would probably still be operating with three planes.
Who is behind SVG Air?
Obviously you have grown significantly over the years. What is the extent of your current fleet?
The persons behind the Company are primarily the
Five Twin Otters (19 seats) are currently operating on our Air
Initially we did target mostly the “Rich and Famous” and Fortune 500 CEO types holidaying in the Caribbean, and for the first 15 years this was our core business. However, after 9/11 things changed, and we moved from doing up to 5,000 private charter flights a year to around 1500. Customers have tightened their belts in recent time and rather than charter a plane to themselves, they are now willing to share the flight to save money. The core business has therefore changed to more scheduled work with the Twin Otters and less private charters. However, there still is a group of exclusive customer who have not felt the need to economize and these are the customers who we cater for with the two Citation Jets.
There has been a lot of ups and downs in the aviation industry in recent times. Is a small airline subject to the same market forces as the big boys? It certainly is, so when the US or Europe sneezes, we get the cold down here in the Caribbean. When we see the stock market slide, the price of oil escalate, big austerity cuts by the US, UK or Canada, our business is impacted almost immediately. We are not
This is fair criticism on the surface until you investigate the causes of this very complex subject. I have studied this industry for over 25 years and my opinion has probably changed a dozen times. The more I study it, the more complex it seems to become. Most of the problems stem from the Governments interference into private enterprise and subsidizing a Government owned airline. Unfortunately Governments donâ&#x20AC;&#x2122;t leave the new management team alone long enough to understand the business, and they hire and fire every few years to get the job done. Also, which entrepreneur wants to start a competing airline that is in competition with a Government subsidized airline that is not allowed to fail? All kinds of concessions are made available and non-payment of bills is a serious issue that has become public record. Unfortunately we are not competing on equal terms in this industry.
What are the companyâ&#x20AC;&#x2122;s medium and long-term plans? Our immediate plans are to provide services that nobody else is doing. This means offering jet charters in the Eastern Caribbean, Aircraft Management to individuals or Companies, who need their own aircraft, but without all the hassles of running them. We ca provide licensing and crewing them to continue connecting the Grenadines to the major gateways to fly to airports that LIAT and CAL do not service. This means they are not threatened by us and do not feel the need to drive us out of business. We are looking to expand the schedule flights to some new destinations and work as a feeder with the two regional airlines. They have many routes that are not profitable with their 50 or 70 seat turbo props, so we are hoping to help them with a 19-seater. Our strategy is to focus on niche business sectors where we have both expertise and experience to rival anyone.
Paul Gravel is a Canadian and married into the Barnard family in St. Vincent and has lived and worked there for over 25 years. He has a strong sports background and his grandfather was an RAF pilot so he inherited a passion for flying. He discarded a career as a Commodities Trader to move to the Caribbean and in tandem with his father-in-law Martin Barnard they set up SVG Air in 1990 with some business associates. Now 21 years later he remains just as passionate about the business as he was as a young pilot. Paul can be contacted at email@example.com
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The region is often criticized for poor airlift amongst the islands. Is this a fair criticism?
The other main obstacles that stop airlines coming into the region are the lack of qualified people with the skills to set up an airline and the Civil Aviation Departments not having the resources and qualified people to help an airline get off the ground. When you acknowledge this background then you can appreciate why there is poor airlift in the region.
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It is quit true that it is slightly more expensive to travel with us as compared to everyday commercial flights. However, travelers need to look at the complete picture and evaluate the costs and the time involved. They also need to compare reliability. For example, if you are going to the Grenadines, the cost involves getting to St. Vincent, taking a taxi to the harbor and catching a ferry to Bequia. This could take 4 hours and when you add the cost of the ferry and taxis, we are close to the same cost because we fly direct to Bequia in a much shorter time. You may pay a little extra for that convenience, but you reach your destination with certainty and overall you get genuine value for your outlay.
government subsidized so if we lose money we go out of business. There is no safety net for us so we have to be very cautious and cost conscious. Our biggest expense is pilot salaries, and in a good year we will have 30 on staff. In a poor year it would still be up to 20, so we adjust the numbers by using seasonal contracted pilots.
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With so many delays and cancelled flights your service appears very attractive. Is it financially viable for private travellers or beyond the average personâ&#x20AC;&#x2122;s budget?
The Caribbean Market is Picking Up St. Lucia realtor David Farrin of Dubloon Real Estate paints a positive and but cautious picture of the market in 2011.
You have been operating in St. Lucia real estate for eight years. What does the island offer overseas property investors in the current economic climate? St Lucia provides excellent airlift from the UK, Canada and the USA, making the island easily accessible. Prices are very competitive in today’s market and combined with beautiful and stunning scenery, friendly and welcoming people and a safe and happy environment, makes it an ideal location for a holiday or retirement home. In the eight years I have been here, the infrastructure has improved tremendously. There is also a good choice of support property management services and rental agencies, should owners wish to rent out their property when they are not in residence. Many new good quality restaurants, bars and hotels have now opened, offering investors a far greater choice of places to go. Have property values held in the past 12 months or have vendors been prepared to compromise?
currency plus capital appreciation on their investment. St. Lucia had several high profile projects in the pipeline three years ago but they never came to fruition. What is the current position with them?
There are definite signs that the market is beginning to pick up again. There is some disparity between what buyers want to pay, since they are looking for bargains, and what vendors want to be paid! Prices in some instances have dropped ‘unofficially’ between 1015%, but this is rather by negotiation than actually a lower listing price. In this respect much depends on how keen the vendor is to sell. In the case of UK owners the drop in the exchange rate between the US dollar and the pound has allowed buyers who purchased around US$2 to the pound, some four to five years ago, to sell with the exchange rate now at US$1.60 to the pound and still make around 10% capital gain on
Thankfully when the projects ‘stalled’ the purchaser’s funds were held in Escrow and potential investors got their money back. In recent months there are distinct signs that things are beginning to start moving again and that the developers are again turning their attention towards St. Lucia. Not so long ago St. Lucia was one of the Caribbean Property “Hot Spots.” Can the island regain this lofty status going forward? Most definitely ‘Yes’. I understand that St. Lucia is rated by the World Bank as one of the top 35 countries in the world to invest in. Once things start to move internationally St. Lucia can quickly regain its position. It still has all the essential ingredients – a great climate, beautiful beaches, stunning scenery and warm,
Hurricane Tomas ravaged the island last year. Has everything returned to normal? Due to an amazing effort by so many people the island has recovered remarkably well and tourism has returned to normal. What are the developments that overseas investors should know about in 2011? In the north of the island, close to Rodney Bay there is The
Landings, which offers one, two and three bed freehold apartments located on the beach and around a superb marina, within a five-star luxury resort. Cap Maison, which is a very exclusive resort destination on Cap Estate, still has three apartments for sale, and it remains a beautiful location and investment opportunity. Mount du Cap, probably the finest development on the island, has five plots of land for sale on which they will build your dream home with amazing attention to detail. On two of the plots you have views of both the Caribbean Sea and the Atlantic Ocean! There is also the peaceful Allamanda at Anse Galet located on the northern tip of the island with spectacular views across the
Overseas investors are slowly coming back to the Caribbean islands. Has this been your experience compared to 12 months ago? Yes there are definite ‘green shoots’ of recovery and slowly but surely a growing feeling that things are beginning to start moving again. There is still some way to go and we may never return to the ‘heady’ days of four to five years ago, but we are coming out of a lean period and moving in the right direction. That is a positive position heading into 2011.
David Farrin came to St. Lucia in May 2003 to launch the sales at the prestigious Discovery at Marigot Bay development, where he subsequently sold 54 of the 57 ‘Buy–to-Let’ apartments and the 12 waterside apartments at the Marina Village. In January 2005 he launched and managed the sales campaign for The Landings at Rodney Bay, selling the first 36 apartments. In 2007 he set up Doubloon Real Estate, which offers a selection of apartments, townhouses, villas, upscale developments and building plots for sale in a variety of locations throughout the island. Doubloon Real Estate is a member of the Realtors Association of St. Lucia and works closely with both local and international agents to offer clients the best possible service. 105
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friendly and hospitable people. Potential investors should also note that unlike other international property “Hot Spots” like Spain, Portugal and Dubai it does not have a vast stock of unsold property that needs to be ‘cleared away’ first.
I have lived on the island for eight years and I have never felt threatened. Yes of course there is some crime, but it is very much a ‘local’ issue and providing tourists are sensible they should have no concerns.
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We occasionally read about crime in the Caribbean. Is this a problem in St. Lucia?
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sea towards Martinique. There are three-bed townhouses, twobed apartments and two three-bed villas and one four-bed villa all for sale within an exclusive gated community. In the south, close to Soufriere, within a UNESCO World Heritage Site is Sugar Beach. Here there are stunning investment villas or luxurious three to six bed residences with prime resort facilities, breathtaking scenery and pristine white beaches set between St. Lucia’s iconic Piton mountains.
Insuring for the True Value Make sure your home insurance is keeping up with the value of your home. David Alleyne gives some excellent advice to Caribbean homeowners…
Given the current economic climate, most of us are watching what we spend and we are considering major purchases very carefully before we make them. Your home is probably your biggest investment, so it’s very important to protect it against damage by fire and acts of God such as hurricanes. Lending institutions require, as a matter of policy, that mortgage customers purchase home insurance. But you shouldn’t rely solely on the on the coverage your bank or mortgage company dictates. This coverage may only protect the house itself, but not necessarily your possessions. It is therefore important to check with your insurance company or agent to make sure your property has adequate coverage. It is also very important that when you’ve finally made that house a home, that you ensure that your insurance coverage reflects any changes you’ve made to your home over the years. There are a number of reasons why you may need to update
your policy: When you add a study, deck or a swimming pool or make any other enhancements to your home, you should update your insurance policy simultaneously. In the event of a loss, these enhancements will cost quite a bit to replace. Ever noticed that the costs to rebuild just keep rising? You should ensure that your home is always insured for its estimated full replacement cost. The replacement cost is the cost necessary to repair or replace the entire home at current construction costs. It is not the market value of the home, the home’s purchase price or the
cost of the land. Note that you can get a contractor or an appraiser to provide you with an estimate of your home’s replacement cost. You’ve finally got the new state-of-the art home theatre system you always wanted or added an exquisite piece of art to your very valuable collection? If you have these or other expensive items in your home, such as jewellery, computer or electronic equipment, you may need additional coverage for these items. Running a small business office from home? You may want to check with your insurance company or agent to see what level of coverage, if any, is offered under your home-owner’s policy. Most home insurance policies include a limited amount of coverage for business equipment in the home. If your home office exceeds this maximum, it’s best to seek your insurance company’s or agent’s advice in order to properly arrange such coverage. Take advantage of some of the discounts offered by many
insurers for updates such as monitored burglar alarms, burglar bars, a fire alarm or retrofitting of your home for a hurricane. Ask about these to be sure you take advantage of improved premiums. Some items appreciate or lose value over time. The value of computers, jewellery and other items insured years ago may have changed since you originally purchased them. So you should ensure that you review the coverage which you have on them.
Running a small business office from home? You may want to check with your insurance company or agent to see what level of coverage, if any, is offered under your home-ownerâ&#x20AC;&#x2122;s policy. These are just some of the items you should check for to ensure that your home insurance is keeping up with the value of your home and possessions. One thing you should definitely do to assist with this is to keep a list of the
contents of your home. Itâ&#x20AC;&#x2122;s wise to have a description of your possessions room by room and to keep any receipts with the list. You should also update this record on a regular basis. If you have a safety deposit box, itâ&#x20AC;&#x2122;s a good idea to keep this list
in the box. In this way, if your home is damaged or destroyed, this list is safe and would assist in expediting the processing of any claim. With any type of insurance protection, it’s important that
you work with your insurance company or agent to identify your needs and to ensure that your policy meets those needs. Once this is done, it is recommended that you review your policy annually to ensure
that your home insurance coverage is keeping up with the changes you make in and around your home!
David A. Alleyne is the General Manager of United Insurance and also sits on the Board of Directors of the company. He is responsible for the company’s daily operations and core business as well as the international business component. He has played a significant role in coordinating and negotiating United’s expansion into international reinsurance markets, offering support for risks in countries such as South Africa, India, Korea and Australia. Prior to his appointment to the Board of Directors and as General Manager is 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. His service to the industry has also included sitting on the Executive Committee of the Insurance Institute of Barbados and lecturing under the Barbados Diploma of Insurance programme (BDI). 108