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Market Outlook And Emerging Trends


Market Outlook & Emerging Trends Andrew W. Mallalieu - Managing Director Terra Caribbean Page 99


Green... The Colour Of Sustainability Andre Kelshall - Principal Talma Mill Studio Page 101


Cash-rich? Why It’s Still A Good Idea


To Finance Your Real Estate Purchase Maya A. Johnston - Centre Director Scotia Private Client Group Page 102


Condominium Returns:


A Comparative Analysis Hayden Hutton - CCIM Director, Brokerage & Advisory Services Terra Caribbean Page 103


Last year I opened the Pink Pages by speaking to uncertainty in the market. This year I thought I would provide you with “miscellaneous ramblings” of what we have seen in the market and what we are likely to see. While it is probably impossible to predict with complete certainty the direction of the market in every segment, I hope that from these perspectives you will have an indication of the direction that the market is likely to take. (Please do not skip to the conclusion as it may make no sense without following the progression in thought.)


Lets start with a statement I hear regularly – “There is an overstock of beachfront apartments”. Three years ago I would have agreed; it was not only what was built and what was under construction, but you also needed to add what was being offered from plan. Today when a statement like this is made I do not think that it is a fair reflection of the actual situation in the market. Lets start with actual supply from developers on the beach front – the total is 205. To that number we must add what is planned and could be completed in say the next three years (44) – giving a total supply of


units


for the next 3 years (249). We do not believe that it will be possible for a new, completed unit (not accounted for in the previous count) to be placed on the market within the next three years. Of the total units that will be available for purchase in the next three years there is a concentration at perhaps three projects – Oceans Two, Saint Peter’s Bay and Port Ferdinand. (Take a look at the chart by our Knowledge Officer, Ramona Smart, which covers the market mix at the end of 2011.) So rather than making the generalised statement about the market being overstocked, I actually see a different picture. I think that there will be price appreciation created by a lack of appropriate supply in certain sub-sectors.


The Four Seasons Project Please answer the following question: The Four Seasons project is? (a) Restarted (b) About to


restart (c) Dead (d) Don’t know (e) Don’t care. Choose one answer only please. Since we cannot rely on the pronouncements from the developer in the media let’s apply some common sense. The Four Seasons project is a 100-room hotel with attached serviced villas (originally 35). The brand is the Four Seasons and the villas are to have the full gambit of the legendary Four Seasons service. The project has been halted now for three years for many reasons but the leading ones are: cost overruns; lack of shareholder equity and confidence; inability to raise debt to fill the place of equity needed; over-specified hotel (cost per room too high); complicated arrangements with the villa owners who expect a hotel delivered at the same time as their villa; and finally, a very complicated construction project involving a level of services that have not been completed on this scale before in Barbados. That is the short answer. Imagine what the long list looks like!


I believe that the Four Seasons project could have been and might yet be a success for Barbados. At the time that the villas were being sold, the highest price achieved for beachfront product (outside of Four Seasons) was around US$1,200 psf. The Four Seasons development achieved US$2,000 psf. They did not lack in sales, or high profile purchasers willing to put down large amounts of unsecured payments for a project that was to be three years in the making. This did not surprise me as the Four Seasons brand is very well aligned with the Barbados brand – it is exclusive and will offer unrivalled service at completion. This is exactly our niche market.


The original plan for the hotel projected that each room would cost in excess of US$1.0 million, calculated as the total hotel cost divided by the number of rooms to be built. The hotel profitability could not initially support this level of cost and therefore the business model showed that some of the profit from the villa development


Beachfront Development Summary South & West Coast Beachfront Apartments Page 104


Buying Property In Barbados Page 105 Think You Have An Insurance Story?


Wait Till You Hear Mine! Richard E. Ince - Account Manager CGM Gallagher Insurance Brokers Page 107


AWC & Barbados Will Set The Standard


With Five-star Medical Tourism American World Clinics Page 108


Sometimes Children Know Best Damian McKinney - Owner & CEO McKinney Rogers Page 110


Relocating With Children:


Selecting A School Susan Freer - Senior Director of Client Services Corporate Relocation Details Inc. Page 111


The Investor & Compulsory Acquisition Michael S. Alleyne - Partner George Walton Payne & Co, Attorneys-at-law Page 112


Investing Today:


A Marathon Not A Sprint Roger Cave - Investment Director Fortress Fund Managers Limited Page 113


Real Estate Then & Now Richard Edghill - Managing Director, Edghill Associates Ltd. Page 114


Weathering The Economic Storm... Hospitality Sector Specialist Team CIBC FirstCaribbean International Bank Page 115


Heritage: Its Meaning & Significance


For Barbados Dr. Karl Watson - President Barbados National Trust Page 116


Condominium Levy Chart South, West, Inland & Condo Hotels Page 118


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