We do not know much about Invincible Investment Corporation, but we share at least one thing in common with the newest landlord on Seven Mile Beach: confidence in the strength of the Cayman Islands tourism sector.
The Japanese real estate firm’s addition of the Westin Grand Cayman Seven Mile Beach Resort and Sunshine Suites Resort will, we hope, yield positive returns for their investors and our country. The acquisition itself serves as a boost to Cayman because it represents Invincible’s lone foray beyond the shores of Japan into the international market. It is encouraging that the firm, which owns more than 125 properties (about half of them hotels), chose to invest in Cayman out of all the possible locations on the globe.
In a notice concerning the US$340 million acquisition, the corporation remarked upon the “high quality of the assets, excellent location, and attractive supply/demand for hotels in the Cayman Islands” and specifically mentioned the Owen Roberts International Airport expansion, Cayman’s economic and political stability and our country’s close ties to the United States.
Before the acquisition, both the 343-room Westin (a local landmark serving the higher end of Cayman’s tourist demographic) and the 132-room Sunshine Suites (which caters more toward the middle of the market), had been owned since 2015 by a private U.S.-based investment group. The Westin emerged last October from a two-year CI$50 million renovation and has become the single largest acquisition (according to purchase price) in Invincible’s investment portfolio, which has a value of well over US$3 billion.
Under the new owner, the two properties will continue to be managed on a day-to-day basis by Pyramid Hotel Group, meaning a seamless transition for employees and guests. Jim Mauer, managing director of the Westin Grand Cayman, said Invincible sees the hotel as a long-term investment and is interested in further upgrades to the property. The firm’s perspective on the hotel is an encouraging insight into investors’ informed projections of the future trajectory of Cayman’s tourism landscape, which is set only to grow more competitive as new resorts enter the marketplace. These include, for example, the NCB Group’s hotel on the former Treehouse restaurant site, the Grand Hyatt at Pageant Beach and the Mandarin Oriental at Beach Bay, in addition to the Dart Group’s projects, including the reopening of the former Beach Suites hotel and the five-star resort planned on the Royal Palms site.
Unlike other markets, where “vultures” swoop on distressed properties during downtimes and strip assets from their purchases, here in Cayman the trend is for investors to acquire properties at a significant price, inject them with more capital, and eventually to sell them at an even higher price to another investor, who continues the virtuous cycle of profit-generation.
Just as we have seen with previous acquisitions of major Seven Mile Beach properties (including The Ritz-Carlton, Marriott and the Westin itself), our expectation is for Invincible to maximize the potential of its newest properties, and through its resources and experience, increase the value of its own investments, but also to raise the standard even higher for Cayman’s hospitality industry.