Election fever

It's time for an infusion of new energies and plans for 2012, which is an election year in the Bahamas. There's heavy campaigning for new jobs, support for small and medium entrepreneurs, and a drive to reduce taxes in a number of areas, including real estate transactions.

Meanwhile, a new president and board of directors have also been elected at the Grand Bahama Chamber of Commerce, led by Deloitte senior manager John Swain, who's leading the charge with the theme, "Reset, Restart, and Restore," and in his inaugural speech as president has said, "‘We cannot allow the times we live in to define us; we have to define the times.”

There'll be elections as well at the Bahamas Real Estate Association. As members of the property industry, we have to do our part in addressing a number of issues which prospective real estate owners like you must have in mind, like the increase in stamp duty, which went up 2 percent across the board in the 2010-2011 budget, and real estate property tax (see article here).

Although first-time buyers aren't as affected, we acknowledge it as a serious concern. Again, it may be hard to ask any a number of real estate sellers now for a clear outlook on the industry. It remains to be seen, as we too observe progress toward the US elections. 

What we do we want to highlight is the optimism of big hotel brands like Carlson-Rezidor in the recovery of the US market (a hotel trade industry article discusses this in detail) and the announcement of their "Ambition 2015" program, which aims to grow their portfolio to over 1,300 hotels (their plans are outlined here). It's an important signal. Not incidentally, we're glad for the business they've given to our islands by hosting their Global Business Conference here just a few days ago.

Other important business meetings have just taken place, like the "Routes Americas 2012", where airlines such as Air China and a Brazilian carrier called TAM Airlines are looking to sign up new routes into the Bahamas. They are just two out of forty-two carriers attending the conference.

Increased airlinks to the Bahamas increase our viability with new markets, reaching farther into Asia and Latin America, and the timing is good, with our international airport in high gear with its $409.5 million renovation project.

We'll continue reporting important business developments as we go along, and we maintain an outlook of cautious optimism. We're not here to sugarcoat the issues; it is in our collective interest to face them head on.

Bahamas on the TODAY Show

If you’re in the US or with access to NBC’s TODAY Broadcast on Feb. 9 and 10, tune in at 10:00-11:00 am ET (TODAY fourth hour of broadcast) to see hosts Kathie Lee Gifford and Hoda Kotb broadcast from the Bahamas. More details on the broadcast here. The TODAY show will be shooting from Atlantis Resort in Paradise Island, but they’ll be doing quite a bit of touring of the neighboring islands.

This is a good chance for you guys out there to check out different attractions and activities here in the Bahamas.

The story I mentioned emphasizes something I tell many of our clients: the islands and cays that make up the Bahamas have a special character of their own. Its different islands will appeal to different people and fit different kinds of lifestyles, whether you come here for work, intend to start a business, retire, or just spend part of your yearly vacation time here with family or friends.

You may wish for the exclusive lifestyle of the Exuma islands, exemplified by famous denizens like Johnny Depp, Janet Jackson and Demi Moore. If you seek to do business, you may find properties on the cosmopolitan yet old-world, colonial-style waterfront of Nassau more appealing. You may be in the Bahamas on transient business; consider it a worthwhile stopover before heading to places like South America, now more accessible via flights from our airport.

Still looking for info? The Bahamas Ministry Tourism, which has been promoting us with its slogan “It’s Better in the Bahamas”, has got a promotional website at www.bahamas.com – another good starting point for getting to know us. Do take note of significant improvements at Nassau’s airport – Phase I of a $400 million expansion project is nearing completion – as well as the improvements to Nassau Harbor completed in late 2010. The harbor project was worth $44 million and now accommodates mega cruise ships that have increased the amount of tourism business our islands enjoy.

We hear the weather’s been stuck at 42-45˚F in areas like New York, while here in Nassau, New Providence we’re basking in 79˚F weather,  more or less what we experience the rest of the year. Have you been pining for warm weather instead of the height of winter? 

Do tune in. We’ll be watching.  

New markets, new business

We're always excited to read about interest from new markets, because tourist visitors who come to experience the Bahamas even just once may become seriously interested in investing or settling down here in the future.

A news piece from the Nassau Guardian on January 10 said eleven Russian buyers are to attend Caribbean Marketplace 2012, an important travel trade show hosted by the Caribbean Hotel and Tourism Association (CHTA) that's going to take place January 22-24 at the Atlantis Resort in Paradise Island. A total of 116 buyers from around the world are coming to meet with 26 suppliers from around the Caribbean region. These meetings can create new and positive impressions for the Bahamas as the ultimate destination. We hope these meetings will  turn into new and repeat business for our friends in the travel agency, hotel, and resort business.

Another piece published the day before that pointed out that China is on its way to simplifying the visa application process for Chinese tourists headed to the Bahamas. We've been open to international investments - the US$2.6 billion Baha Mar resort and casino project in New Providence, which is being financed by the Export-Import Bank of China and constructed by another China firm, is one important example. Now, although based on the piece we think it will take more than facilitating the visa process to encourage more Chinese visitors, we'd like to think each step is a step in the right direction. If this means new airlinks or charter flights into our islands, then so be it - we're all for it.

Many Chinese and Russian visitors represent a vastly untapped, newly affluent traveling set. They've been around less than a generation and as luxury spenders have only recently been finding their way everywhere - across Europe, the US, and Asia. They are looking for new and exotic destinations and are interested in long-stay visits, which means they have a chance to get to know their destination well. That represents great potential opportunity for us.

Visitors to our islands are spoilt for choice; they can come here by plane or perhaps experience the Bahamas as a world-class cruise destination.

Now before I go, here's a brief postscript on the Bahamas Express ferry ride we were discussing last week. Baleària is now offering the return trip to Florida at $49.50 (taxes excluded). Check their website, www.ferryexpress.com, to reserve seats.

Visiting the Bahamas via Freeport

We're always on the look out for the latest cruise ship or sea routes we can recommend to prospective visitors, so we have been monitoring initial feedback on the Bahamas Ferry service (www.ferryexpress.com), which runs from Fort Lauderdale (Port Everglades) to Grand Bahama Island (Freeport) and back. One story reports the news, here.

The 450-passenger ferry ship leaves from south Florida every day at 10 am, except Wednesday, and will do the 32-knot, 76-mile ride in about 2.5 hours if the waters are smooth. Day roundtrip fares cost US$142 and give you six to seven hours of sightseeing time; then it's time to head back at 7:30 pm from Freeport. If you want to head back the next day, get the overnight fare at US$193.

Initially, the high-speed ferry service operated by the Baleària group got mixed reviews in the Chicago Tribune, partly because of the time needed to clear at the departure area (90 minutes, we're told), plus another 30 minutes when you arrive in the Bahamas. On the up side, when they start offering car and cargo transport services, we expect their service to make more of a difference.

Baleària was also planning a Port of Miami-Bimini island route here in the Bahamas as well, but that has been delayed because of improvements needed at the Bimini seaport. That's worth keeping in mind in the future.

Anyhow, there are alternatives like flights from Sky Bahamas or Continental Airlines, which on average cost US$275. (Be warned that a Bahamas airport tax of US$60 each way will be charged to your ticket.)

Further up north, consider taking low-cost carrier Vision Airlines' two-hour, twenty minute direct flight from Baltimore, Maryland, into Freeport, a service which started last November. It flies twice weekly with base fares of about $US99-189, depending on the date you will be flying in. Vision Airlines is also running the Fort Lauderdale-Freeport route.

Freeport is Bahamas' second largest town and an important sea cruise terminal. It may not yet have the same prominence as Nassau or New Providence, which seem to gather the most attention from incoming visitors, but consider this: rent is cheaper in Freeport than in Nassau. Freeport is also a tax free zone till 2054, whereas Nassau is not.

Check Tripadvisor for things to do in Grand Bahama (the first article we linked above lists five great suggestions). While you're at it, come and check out some of our Era Bahamas Real Estate listings in Grand Bahama as well. Better yet, consider taking a few days off to see some of the attractive properties in our beautiful islands. Our knowledgeable brokers will be happy to take you around.

Thoughts for the beginning of the year

We're moving into 2012 with some level of uncertainty, if you're to consider what Patty Birch, president of the Bahamas Real Estate Association (BREA) has said in assessing the Bahamas real estate market. 

According to her, the year 2011 was, and I quote, similar to 2010 in terms of sales, with some companies doing better than others. She added that a "glut" in some areas may lead to some price corrections. Other realtors have mixed opinions on this - we'll just have to wait and see.

What does make sense, as Patty says, is that more realtors are "back to studying" and getting on the Internet.

Although the near-term outlook on the market may be mixed, we see this as an opportunity to scour the market for good deals, and not just within the area of New Providence. William Wong, a former BREA president suggests looking at long-term "legacy" investments - investments that your children or grandchildren will enjoy in twenty, maybe thirty years. That's one option. 

Another option is looking at what works for investors who may not be living in the Bahamas. Partial or vacation ownership is one consideration. The $80 million Emerald Bay resort in Exuma is just one example of our world-class properties where this is possible. 

Incidentally, take a look at the Lonely Planet Feature on CNN's website, "The 10 ultimate Bahamas experiences." If this does not generate excitement about living and vacationing in the Bahamas, we don't know what will!  In terms of leisure activities alone, we offer a wealth of water-based activities, world-class golf courses, all-day entertainment, access to the freshest and most exotic seafood...a quality of life that is hard to beat anywhere.

Real estate offerings in the Bahamas islands offer an unparalleled investment.  I am confident we will do better in 2012 than we have in 2010 or even 2011 if we are able to connect more effectively with potential buyers. We will be providing them with more timely and reliable information and convince them about the quality of their investment in the long-term. 

A happy new year to all of you. 

Key infrastructure projects mark 2011

The year 2011 was a banner year for Bahamas infrastructure projects. Some of the most exciting projects we witnessed were the completion of the Thomas A. Robinson National Stadium and the $12 million Solomon's Fresh Market, as well as initial redevelopment work at the Lynden Pindling International Airport (LPIA).  

The Solomon's Fresh Market is located west of the Old Fort Bay Town Centre. This new market in Nassau has 500 booths within a space of over 38,000 square feet.  It is well-ventilated and there are proper drainage systems, and sellers will have access to a special demonstration area within the market. It has been open only about a month, replacing an old space lost to a devastating fire ten years ago, but we've heard that in this short time many new lease contracts are being signed. 

New Providence Development Company president of finance and secretary Marcus Grammatico in fact told the Nassau Guardian earlier this month that they expected the new Nassau market to attract "young professionals and professional-type offices" in 2012.  

The article also noted that these new tenants would add to an already dynamic mix of retail stores such as cafes, furniture and accessories stores, a clothing store, and a pharmacy, among others. We can't wait to see how these expansions in the less developed areas of the West will create new commercial opportunities for nearby Old Fort Bay and Albany.

The National Stadium project, which cost $30 million to complete after two years of construction with a Chinese business partner, is another important leisure facility with outstanding potential. It is a multipurpose venue spanning over 450 acres and accommodating over 15,000 people, and part of a larger master plan for the Queen Elizabeth Sports Centre. 

Over at the airport, a U.S. departure terminal has been opened in the first phase of a master redevelopment project worth $409.5 million in total. Phase two of the project, which they say is scheduled for completion by the end of 2012, will include other improvements in  LPIA's arrival and departure facilities. Given the increased emphasis, among other things, on tourist development strategies within the Bahamas, this should help increase our medium and long-term appeal as an investment destination. 

The New Providence Road Improvement Project (NPRIP) has not done as well as the projects we mentioned, mired as it was by controversy and delay. The road project required an additional infusion of $40 million dollars and will now cost the government a total of $154 million to complete. The government now plans to procure about $50 million in funds through the IDB to achieve this. Hopefully the road will be completed without further long-term disruption to businesses in Prince Charles Drive and Market Street.

That said, in 2012 we expect more good things with the rise of Arawak Cay port, a project which will take the better part of twenty years to complete. Funds for Arawak Port Development (APD) project will come from a $10 million IPO being held over the Christmas period until January 31, 2012.

 

We hope the IPO is well-subscribed. The port should boost Bahamas' GDP by $800 million, according to a recently released KPMG Corporate Finance economic impact statement mentioned by The Tribune. More importantly for us, it will free up a crucial 20 acres of attractive waterfront land in downtown Bay Street.

New owner for Atlantis Resort

The famed Atlantis Resort got a new owner two weeks ago. Kerzner International was struggling with debt since the economic downturn in 2008 and transferred ownership of the mega property to Brookfield Asset Management, a Canadian company.

Real estate transactions of this scale are complex. Brookfield was already a lender to the property and agreed to forgive many millions of dollars of debt in exchange for title. Kerzner, however, will remain as the management and operations team,insisting that the Atlantis property has always been profitable (it was other properties in the Kerzner portfolio that carried the debt). Kerzner, which also owns the Dubai Atlantis resort, worked for more than a year to resolve its debt issues. With Brookfield already invested in Atlantis Bahamas and Kerzner’s Palmilla Resort in Mexico, the debt for title exchange was a workable solution for both parties.

Resorts of this scale have a profound effect on the local economy. Atlantis Resort employs some 7000 people. A change in ownership could dramatically affect the future of the employees, so Prime Minister Ingraham became involved and made a statement. Although Brookefield has not specifically stated that jobs are guaranteed, all sides have stated they are committed to maintaining the work force and the high levels of service the resort is known for.

Brookefield is a global firm, with decades of expertise in real estate investment and holding billions in assets and a healthy cash flow. This is good news for us. It is not only jobs at stake, but the entire supply chain of Bahamian companies that profit from doing business with Atlantis. As the largest private employer in the country, there is a lot at stake. PM Ingraham noted in his statement last week that 15% of Bahamas jobs are related to Kerzner International.

Brookefield, to its credit, has stated that it has no plans to turn around and sell the property in the foreseeable future.