Property

Jewel of the Caribbean

Jewel of the CaribbeanThe Caribbean has its own kind of mystique — above and beyond its pirate legacy. The sub-tropical sibling to what we here in Asia know in Thailand, Bali and the South Pacific is the go-to spot for the same kind of long weekend or relaxing beach vacation for Americans and Canadians, and to some degree Western Europeans — Kingston, Jamaica and Nassau, Bahamas are each about nine hours from London.

The Caribbean, sometimes the West Indies, is every bit as varied as Southeast Asia as well. Comprising Cuba, Jamaica, the Virgin Islands, Haiti, Dominica, Barbados, Trinidad and Tobago, Antigua and Barbuda and several thousand other islands and keys it spans the Gulf of Mexico, the Caribbean Sea and the North Atlantic. It’s a bit of a mystery on this side of the world, but the Maldives-level water, soft white sand beaches, rich histories and diverse cultures have been attracting hotels and individual investors from around the world for decades. The Caribbean, arguably, perfected the beach resort destination model.One of the hotspots right now is the Bahamas, one of the more northerly island groups and one of the most robust economies in North America. A drive through the tiny central core of the capital, Nassau, on New Providence Island, reveals a scads of new development designed to support its dominant tourist trade; the port at Nassau is one of the busiest in the region. Nassau, home to 250,000 of the country’s 350,000 residents, is a great starting point from which to explore the rest of the Bahamas — 700 islands all tolled — and is defined by its intensely Caribbean vibe. There’s no reason to hurry here, unless it’s to get to the fish fry for a conch meal.

The economy is based largely (as low as 60 or as high as 80 percent of the GDP depending on the source) in tourism, but two of the biggest growth sectors in the Bahamas are financial services and real estate. The former British colony is famous for its liberal tax policies, which is going a large way to attracting affluent investors. Revenue largely comes from high import duties — a cash cow as nothing comes from the Bahamas anymore — licenses, and stamp taxes. But there are no income, corporate, capital gains or wealth taxes.

Aside from obvious tax benefits, the Bahamas has a lot going for it for investors. “We have over 300 years of uninterrupted parliamentary democracy and we still retain a Westminster style parliamentary democracy,” begins George Damianos, president of Damianos Sotheby’s International Realty in Nassau. To many that sounds like a minor point, but with stability and transparency both selling points for investors it’s far from the case. The Bahamas is easily the regional leader on the political front as well, and lacks some of problems that plague Jamaica (crime) and Haiti (corruption, poverty). Add to that, “Our proximity to the United States, only 60 miles off the coast of Florida and a 2.5 hour flight to New York, our currency is US$1 equals BSD$1 and US dollars are used as well as local currency. So there are no tricky conversions. The official language is English and we have a modern infrastructure with banking, finance and tourism as our top industries.” Canadian banks are particularly prominent and their stability makes local financing more attractive, and the airport recently completed a major renovation and expansion of its American departures terminal. Lastly, “The Bahamas adheres to the principle of the right to privacy, which is very important to many of our purchasers,” Damianos adds.

Bahamian islands are popular private purchases, and more than one prominent world citizen has purchased there. Johnny Depp, Sean Connery, Nicolas Cage, Tiger Woods and Bill Gates may not need to worry, but the Bahamas also has attractive residency incentives. The Reef development at the Paradise Island megaresort Atlantis is one of the most recent resort investment opportunities that offer residency with a purchase, but it’s likely to become more common, and not just with apartments and hotels. “The most popular product for overseas investors is the ability to get permanent residency with purchases of homes or condominiums over $500,000,” echoes Damianos. “The Baha Mar project is offering permanent residency and a return on investment.” The Baha Mar is a US$3.5 billion, four-hotel and residential megadevelopment at Nassau’s Cable Beach, largely financed by the Export-Import Bank of China and built by China State Construction Engineering that will also include a golf course, a convention centre, retail space and the Caribbean’s largest casino. It’s scheduled to open in December 2014. Damianos notes buyers are purchasing homes in relatively remote Abaco and the exotic Eleuthera — that of the pink sand — as well as easily accessed spots like Paradise Island and New Providence.

Damianos points out Asian buyers are fairly rare at the moment; most foreign purchasers still come from the United States and Canada. But the combination of a truly novel second home, few to no taxes, residency bonuses and the massive exposure likely to be generated by the Baha Mar could put the old pirate haunt on the investment map sooner rather than later.