Caribbean’s real estate still strong

The Caribbean is still a favourite destination for hard pressed bankers who may not exactly be on the breadline but have certainly had to tighten their belts. The real estate market is still buoyant in this region too.

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Properties are still selling well in the Caribbean. Photo: AP

Bankers, once at the top of the tree, have become scapegoats. But are the City boys suddenly all broke? Not at all.

Bonuses this year may contain more stock and less cash, but they will still materialise. Today’s investors, however, are risk-averse – and that includes bankers.

The word from Wall Street is that the cash-rich will quietly keep investing. Over the past month, prospective Caribbean buyers have been inquiring about falling asking prices and pushing for lower offers to be accepted. This is premature, however. ‘Prices have not come down yet,’ says Georgina Richards, of Knight Frank’s Caribbean office.

As the winter sun season gets under way next month, buyers will look for solid investment opportunities in Antigua, Barbados and the Bahamas, the three historically sturdy Caribbean markets.

Good returns are ensured by the steady stream of direct flights that keeps these islands at the top of the tourism pecking order.

Antigua is a favourite among City professionals because the eight-hour flight time is one of the shortest from London to the Caribbean, making it a feasible quick getaway.

Barbados is just as accessible, but rather crowded – which benefits investors and makes it the most trusted market for resale and rental return.

Barbados is the premier spot for buying into a sporting estate and is the only Caribbean country to appear on Knight Frank’s Prime International Residential Index, in twelfth place.

British buyers regard it as safe, thanks to its familiar legislation, which is replicated in Antigua and Grenada.

For American bankers the Bahamas are still the top choice and the Turks and Caicos archipelago a close second.

Both countries are near enough to New York to be prime weekend-home hotspots. Turks and Caicos is quieter than the Bahamas but is still a favourite on Wall Street.

Beyond these mainstay markets, the small island of Nevis is adored by the banking communities on both sides of the Atlantic. It is harder to reach so is more exclusive.

Demand there continues to creep higher while supply is limited by strict development regulation. St Kitts is similarly desirable and both islands are favoured by the richest individuals and celebrities.

Although the pool of buyers remains ready to invest in the Caribbean, developers will have to work hard to secure their interest.

The three defining factors that determine success in this market are a history of similar projects, a brilliant word-of-mouth reputation and solid financing.

‘Branded developments that have previously established a good name will do well in this market,’ observes Julian Cunningham, a senior negotiator for Knight Frank International Residential Developments. He believes that now, more than ever, investors need to feel that they can trust the management of a project.

Two new resorts, one in Antigua and one in Turks and Caicos, have these credentials and are successfully winning buyers through personal recommendations. Hodges Bay Club, on the north coast of Antigua, has made all its sales to date through word-of-mouth.

Only three investors so far are young City boys. At the Turks & Caicos Sporting Club, on Ambergris Cay, a private island on the edge of the Atlantic, almost a quarter of investors work in banking. David Rosenblum, a Goldman Sachs employee, bought a plot on Ambergris Cay after hearing that one senior partner in Goldman Sachs had bought the entire southern tip of the island for $14 million (£7.5million).

‘I figured that was a fairly strong indicator that it was a sound investment,’ he jokes.

Thanks to the herd mentality among bankers, known to be strongest at Goldman Sachs, many investors are Wall Street colleagues.

‘Several bankers have bought this summer. It was our best summer to date, with over $20 million worth of sales,’ says Stephen Schram, chairman of DPS, the company behind the project.

Both resorts offer the holy grail of Caribbean property: beachside homes. ‘Beachfront properties always hit their asking prices because they are so hard to come by,’ says Richards.

Asking prices at the Hodges Bay Club start at $1.3 million. There are 113 hotel suites and luxury flats on an eight acre site.

The sleek and minimal design, by the Syntax Group, incorporates modern Italian furnishings. The units are closely built in a series of blocks and the feel is conventional. Ambergris Cay is less built-up, with colonial-style villas along the shore amid scrub and cacti that give it a real desert-island look.

Prices start at $600,000 for membership and a plot of land, which is effectively shared ownership of the island. The cay’s party piece is a 5,700ft private airstrip, the longest in the Caribbean, which can handle the biggest private jets. There will also be a deepwater marina for yachts of up to 200ft.

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