Cayman’s newest high-end development on Seven Mile Beach is on schedule to begin construction on the site of the existing Beach Club Colony in November, a good sign the luxury retail market is finally recovering.
With the permit issued Wednesday for construction to begin on the foundations for the 39-unit, $175-million WaterColours project, developer Fraser Wellon said the bid tendering process on the main structure will commence in the next four weeks.
The required pre-sales have already been achieved, and Mr. Wellon says his team is working with the Beach Club to ensure the project remains on track.
It’s welcome news to Cayman’s high-end market.
‘Sales in the resort market just about stopped from last September to July of this year,’ said Kim Lund, Broker/Owner at Re/Max who is working with James Bovell as the project’s exclusive listing brokers.
‘And then, in the past two months we have had three sales, and what is even more encouraging is that they are buyers who are brand new to the market,’ he said.
‘In fact, we have had more activity in the past few months than in the past year.’
Sales are also picking up at the planned five-star luxury resort in East End, the Island Resort and Residences, which is on track to begin construction in late October under an internationally-known brand, the name of which is still under wraps.
‘The project is stable and moving forward,’ said developer Michael Beggs.
‘What I have got planned is the flagship product for all of Cayman, it will make it the No. 1 product in Cayman if not the region,’ he said.
Mr. Beggs says a decision was made to halt sales and marketing for a few months this year once it became clear that thanks to the global economic crisis potential buyers were only window-shopping.
‘It was an unusual situation, the first recession wealthy people didn’t spend money,’ he said.
But once he started sales back up upon signs of a turnaround, within the last three to four weeks, the development has been making progress on two to three contracts.
Mr. Beggs says the $140 million project is now 40 per cent sold, and all the funding has come together. And that’s not the only good news in this tough market.
‘It was very prudent of me to slow down and wait for the market to pick back up, since almost every five-star project in the region has now been cancelled,’ said Mr. Beggs.
He says since it takes two and a half years to design and three to build a project of this nature, the Island, which is set for completion in December 2011, is now well ahead of any potential competitors.
Mr. Lund notes that sales usually drop off completely in September, but this year that has not been the case, a welcome change.
‘We are not fooling ourselves, it is a tougher market,’ said Mr. Wellon.
‘But I have confidence in the market, and in the country and I believe the market will recover.’
Having worked as a developer in Cayman over the past 18 years, Mr. Wellon says this is just one of many downturns the area has survived successfully.
‘We started construction on Water’s Edge with fewer presales and then Ivan hit. We had the confidence and the ability to get through that and we did, we will see this through too,’ he said.
And while the pick-up in sales might seem to be only good news for realtors and developers, the projects are also good economic news for Cayman as a whole.
‘With $140-million being spent in two years that is a lot of economic activity for Cayman,’ said Mr. Beggs of his project, noting it will also bring in many millions in government revenues.
‘This project signals to Cayman, to the Caribbean and to the rest of the world there is economic growth going on in the region,’ he said.
‘Certainly we had some delays, but the market did turn and people are interested in buying again.’