Dart’s massive development plan

‘Theoretical programme’ in PwC review

Dart Realty [Cayman] Ltd. had – at the time an October 2012 value for money review was completed – plans to build five new hotels in the West Bay Road, Seven Mile Beach and Barkers areas.  

In addition to the hotel development, condominiums adjacent to those hotel properties, separate housing developments and two new commercial and retail developments were proposed.  

The details of the planned developments are contained in the recently released value for money review done by PricewaterhouseCoopers at the request of the Cayman Islands government. The review evaluates the National Roads Authority agreement entered into by Dart Realty and government. It seeks to define a monetary value for what Cayman is putting into the deal, versus what it’s receiving.  

The hotels and other developments were included in the PwC review to estimate how much potential value the NRA agreement might produce within a 25-year period. However, the NRA agreement does not bind Dart Realty to the completion of any of the construction projects except for one four- to five-star hotel along Seven Mile Beach.  

The entire plan, if it were carried out, would increase the number of available hotel rooms in Grand Cayman by 53 per cent.  

“They are therefore predicated on the assumption that there will be sufficient US and other international demand for the additional hotel 
accommodation, as well as adequate air transport capacity,” the PwC review states. “Current economic trends suggest the plans are challenging.”  

 

The hotels 

The first hotel listed in the development programme has already started construction at the location of the old Courtyard Marriott in the Public Beach area on West Bay Road.  

It is envisioned as a four- to five-star hotel with 265 rooms [including 20 condominiums]. When completed, the company estimated it would sustain occupancy of around 65 per cent.  

Three other hotels listed on the plan are simply defined as “WB hotels 2, 3, and 4”. They have between 150 and 300 rooms apiece and are expected to average 70 per cent occupancy.  

The “WB hotel No. 2” has an anticipated start date of December 2015. It would be the largest of the five, with 300 rooms available.  

The smallest hotel on the plan, with 100 rooms, is listed as an Eco-tourism hotel proposed in the Barkers area in West Bay.  

None of the hotels, save the one at the old Courtyard Marriott site, are mandated by the NRA agreement.  

The PwC report speculates that some projects, like the Health City Cayman Islands complex in East End or the Enterprise City development, may be needed to support additional demand for hotel capacity.  

An upgrade to Owen Roberts International Airport in Grand Cayman would also be needed, reviewers noted, since additional travel capacity to fill all these hotels would be required.  

 

Other projects 

Attached to the proposed hotels are condominium properties identified as “WB Lands Condo 1, 2, 3, 4 and 5”.  

The developments have between 50 and 100 units apiece and are all fairly high-end, with a stated development cost of between $660,000 and $1.1 million excluding land costs. Average sales per unit are anticipated at between $800,000 and $1.2 million, according to the PwC report.  

In addition, housing developments again in the upper-scale of the market, are slated for development under the long-term Dart Realty plan.  

Two of those developments – “Crymble Landholdings” and “CIYCAM Lands” – are identified in the report. The Crymble development is a massive project with 838 units to be sold at an estimated $1.1 million per unit. CIYCAM is a more modest 171 units with an average sale price of $900,000.  

Two commercial centres of roughly 50,000 square feet apiece are also listed in the development plan. Starting rent per square foot within these developments is estimated at $45 per square foot. 

PricewaterhouseCoopers did not seek to estimate a return on investment from these potential real estate projects to Dart Realty.  

“PwC did note, however, that, on the face of it, Dart Realty’s projected returns from real estate development and hotel operation appear low,” the evaluation stated. 

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11 COMMENTS

  1. First off, this means jobs for Caymanians. Now if dart builds that many hotels. And just say, he oversaturates the market at this point. His hotels aren’t being filled.

    The only reason that would be, is we are not getting enough tourists into this island.

    I am more than sure, by that time. Our airport won’t be expanded.

    Guess who will foot the bill for that one?

    And everyone benefits.

    The airport can now expand, due to better revenue. More jobs created, for Caymanians again.

    Roll with it.

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  2. Lofty goals for an organization that needs judge, jury and every consultant available in the Western Hemisphere to decide what coffee to brew every morning. There needs to be major changes at the top in that organization if they want to move anything forward in the future. Great projects, micro managed from every angle.

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  3. Gee, sounds a bit reminiscent of WalMart. They come in and flood the market and force all the little retailers out of business. So with existing hotels currently struggling to fill enough rooms to stay in the black and suddenly Dart increases the number of available hotel rooms by 53%, it’s not hard to see what’s going to happen!

    And they say Dart is not expecting a big return on his investment? Come on people! Wake up! Dart is a shrewd business man. Shrewd businessmen do not go into something expecting a poor return on their investment!! And who makes the REAL money in a hotel? It’s not the little guys doing landscaping and housekeeping and what not (all those jobs they say will be created for Caymanians), it’s the people at the very top, the foreign investors.

    People have got to take a look at the big picture, and this thing has got to stop! If I wanted to live amongst high rises and super highways, I’d have moved to Miami or LA!

    I live near Barkers and love the fact that it’s quiet and not developed. I say KEEP DEVELOPMENT OUT OF WEST BAY! Keep out ALL this development that is not benefitting Cayman but instead forcing others to close and destroying the environment!

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  4. To increase hotels by 53%, obviously, we have to increase tourism substantially. We are LOSING tourists because of our present port (or lack of) situation. People’s first impression of Cayman is bad right now, long line ups for these ridiculous shuttle tenders, and the lovely vista of our garbage heap which makes for wonderful pictures of Cayman. No wonder they don’t rush back to book a 1 week holiday down the line. If you want more tourists, you have to address the port problem IMMEDIATELY. Otherwise, we’re all in trouble.

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  5. Okay, Anyone with a any business sense would know that it would be entirely foolish to build everything at once and hope for the best, especially with the way the world economy is now and the capacity of the airport.

    My guess is that they will build in phases say 1 or 2 projects every 5-10 years. With that approach, Cayman’s hotel room demand should hopefully grow organically along with hotel room supply. Existing hotels can maintain current occupancy levels and Dart can try to hit his occupancy goals.

    Of course some customers will convert but that is what happens in a free market. Competition is good for the customer and customer is king. Stay current with your customers needs or fall by the wayside.

    As for the housing developments, that is an entirely different market and the article did not mention this but ask yourself this. How many new condo units came on the market from 2000 to 2010 in those price ranges? Then look at the total units available in that price range. You will then get a estimate of the impact of those developments. My guess is that the condo market is much much larger and any new additions by Dart will definitely NOT flood the condo market.

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  6. Mr Dart I would like you to build a hotel for the Residents of Cayman. Sometimes we want to get away for the week end with our kids to a different environment, but because it is so expensive we cannot go to the other hotels. So please build a hotel where we can spend the night or week end honey moon or just get away for prices we can afford like 75.00 dollars per night. Don’t leave out the restaurant and bar and music, room service game tables pool and gift shops, because we will want to eat and drink and enjoy ourselves. I believe many residents will love this to get away for Easter, Christmas or any long Holiday. Build it on the West Bay road public beach area, so we can plan for Christmas weekend getaway..

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  7. I think Dart has made a significant financial investment into the Cayman Islands product and at this point does not have faith in the current government to sustain and improve that product as a whole. So they are getting involved and doing what they feel it will take to improve the Cayman Island Product before it is too late and if that means monopolizing and controlling the local economy so be it. I for one have more faith in Dart Realty to Improve and sustain the Cayman Islands Product than I do in the Cayman Islands Government and that attitude will not change until the CIG shows signs of reliability.

    The way things are going Cayman will be so dependent on Dart that every financial decision will require his input and that doesn’t seem to be a bad scenario given the choices made by the CIG over the past 10 or more years. Big Berd has a point, I agree that the Airport expansion will not be completed and Dart will most likely have to see that it get completed to secure his investment, even if they have to pay for it themselves. But don’t think for a minute that it will be free.

    One day when everyone has to sit down and explain to their children why Dart has so much control of Cayman, owns most of it and just about everyone works for Dart. The answer will be because we didn’t have the sense to make the hard choices that would have put us in a position to do it ourselves so we needed someone to bail us out of a hole we dug for ourselves in return for control.

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  8. It’s sad to note the comments of oblivious people. A 50% increase in hotel capacity would be great if we can attract more tourists and retain our tourist attraction. What people fail to see is all these developments especially along the beach have sadly reduced our beach line massively and future developments of ports and more hotels on the beach will reduce our tourism attractions. Tourists, especially from the US come here for the beach and underwater activities. Other than our beach or our underwater activities we don’t have anything that would matter to any of the tourists. By building these massive properties along the beach we are systematically destroying the sources that would attract tourists. These hotels will all run under capacity and in time go under and so will Cayman. If we do not fix the problem of our disappearing beach-line then forget Cayman as a tourist destination.

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  9. LOL at Caymer’s comment: Gee, sounds a bit reminiscent of WalMart. They come in and flood the market and force all the little retailers out of business.

    Yes, we really need to watch out for those little hotel chains like Marriott, Ritz and Westin. We’d better protect those poor helpless companies!!!

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  10. Yes I would like to see Dart extend the Airport so that 747 planes can come in. Instead of having five to 6 different airlines flying in twice a day then we will only need a 747 coming in on Saturday morning and Wednesday afternoon fully loaded.
    So far I do not have any grudge against the Dart foundation, because what they do, they do it good. They are giving jobs to Caymanians; and that was not happening with the other hotels along West Bay Road. People may talk that Dart Foundation is making too much claims on the Island; however I have said it before, I have never heard that he pointed a gun at anyone here including the government to sell their property and business. Many Caymanians here want to go to Heaven, but they do not want to die. Look at the new West Bay road. It is not completed as yet and it is so beautiful. To all the other developers on here I say to you that you had your chance for 40 years to make some improvement and show friendliness to the people of Cayman. You never did that and now it is too late complaining. However there is still more to be done. Caymanian students need some scholarships to study abroad, it would be very nice if now you all would step up to the plate and each one of you offer at least one scholarship to a Caymanian student. Government should not have to do this.

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  11. Once again Hunter has hit the nail on the head. Action speaks louder than words. The Dart folks have proven that they are willing to put their money where their mouth is and if they say they are going to do something you can take their word at it and believe it will get done and get done with the highest quality, their track record shows just that. Now can you say that about anyone else including the Government.

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