The Lund Report, Kim Lund, RE/MAX
The Cayman Islands real estate market has bottomed out in 2011, after falling off in activity, every year since 2007, which was our peak year in the last decade.
It is expected that the market will continue to slowly recover, over the next couple years and then pick up momentum after 2013. This will be due to the advancement of major projects (provided they all get started), which will have a substantial economic impact. These projects are as follows:
The Shetty Narayana University Medical Centre and affiliated infrastructure
Cayman Enterprise City and special economic zone
Re-instatement of Marriott Courtyard Hotel to a new 4 to 5 star brand and further expansion of the site
Expansion of Camana Bay town centre and development of their residential component of 200 homes and condominiums
George Town port and berthing facility for cruise ships.
To date, real estate market activity for 2011 is down 32 per cent from 2007. The real estate market is in a bottoming trend and this market cycle should continue to slowly improve and ramp upwards. Currently, real estate activity (sales volume), is up 7 per cent compared to last year – the first improvement in four years.
Tourism from air arrivals is also up for 14 months in a row and this particular market provides much of the demand for our resort properties. Stay over tourism, versus day excursionists from cruise ships, is up 6 per cent to 7 per cent over last year. 2011 has the potential to be our best year, for total number of arrivals, in 10 years.
This market is starting to recover, similar to the real estate market. Once the medical centre is online, medical tourism should drastically boost these arrival numbers, as well as real estate market demand and activity.
Small development projects have slowed in the Cayman Islands, due to the recession. However, other mid-size to large projects are moving forward and these developments will have a sustained and positive impact on our economy. These projects comprise of the following:
60 ultra-luxury condominium residences in the first 9 storey development (within the height of 10 stories) for WaterColours on Seven Mile Beach, under construction and completing in December 2013.
-Expansion of the Ritz-Carlton’s 200 acre Dragon Bay development of resort homes, condominiums, villas, and resort facilities, currently delayed, but planned to restart construction as the economy/demand improves.
National Gallery building off the Harquail By-Pass, completing in early 2012.
Two new multi-storey commercial buildings in George Town; both of the buildings are under construction.
Caribbean Office Plaza on West Bay Road across from Caribbean Club, delayed, but now planned to start construction in early 2012.
15 lavish residences at Oceania, on the waterfront in George Town, currently under construction and completing in 2013.
The resident population base for the Cayman Islands is 54,878. During the next 10 years, it is anticipated that this population base could increase by thousands, as major development projects increase the need for residents to service these developments. Additionally, government is taking steps to ease the process of immigration, which is a welcome relief to the business community.
The opportunities for future investment are largely based around new development, catering to an increase in population and tourism. There is a strong and/or growing need for more 5 Star international branded hotels and residences, mixed use retail/commercial/residential development, and exclusive housing in master planned communities.
Good progress continues to be made by aggressively pursuing new markets to expand our financial services industry. The captive insurance market in Bermuda is being targeted through incentives to relocate to Grand Cayman. Other financial industry entities are similarly being pursued, such as law firms, and accounting companies.
Although we have lost a lot of momentum and our economy has weakened, during the last three to four years, there is good potential, just ahead. If we can once again, expand our population base through increases in tourism, financial industry, development, and new markets like the Cayman Enterprise City, then this bodes well for new business opportunities and a better economy for everyone, in the years ahead.