Looking askew at Cayman property numbers

Compared to the Cayman Islands’ Caribbean neighbours, the Lands and Survey Department maintains a first-class database of information about property ownership and transactions. However, the relatively small size of the market means it is vulnerable to sudden swings and dips due to actions by major real estate players, and so should be taken into account by those wishing to glean an understanding about recent and future trends.  

 

 Generally, the past seven years has been marked by a fall, then levelling off of freehold property transfers in Cayman, in terms of number and value. That’s coincident with the global recession and stubborn recovery. During that time, two blockbuster property deals have obviously skewed the regularly reported statistics: the Dart Group’s early 2011 acquisition of a network of properties from developer Stan Thomas, and the sale of The Ritz-Carlton, Grand Cayman, which finally went through in May 2013. 

The Lands and Survey website maintains property statistics dating back to January 2006, showing the monthly totals for the number and value of property transfers, including freehold transfers, which are mostly, but not all, sales. 

 

Dart, Ritz  

The numbers, which span 30 quarter periods (including the incomplete second quarter 2013), clearly demonstrate the impact of the big purchase by Dart and the auctioning off of the Ritz. 

The Dart-Thomas deal was finalised in January 2011 and included 64 parcels of land throughout Grand Cayman for around $100 million, including $15.5 million for the former Courtyard Marriott. The property sale paved the way for the ForCayman Investment Alliance between Dart and government, which involves the redevelopment of the former Courtyard Marriott, extension of the Esterley Tibbetts Highway, various land swaps, and (precariously with the new government taking power) the closure of the George Town landfill and opening of a new facility in the district of 
Bodden Town (or now perhaps 
elsewhere or not at all). 

The auctioning off the Ritz property to secured creditor RC Cayman (the local affiliate of US investment firm Five Mile Capital Partners) took place 31 October, 2012. However, the purchasers and government disagreed in public and in court over the validity of the resort’s US$177.5 million price tag, causing the transaction not to be officially recorded until May 2013. 

 

Value and number  

Out of the 30 quarters on record, the first quarter of 2011 ranks first in total value of freehold transfers ($251 million) and second in average value of freehold transfers ($519,000). Accounting for only April and May 2013, the incomplete second quarter of 2013 already ranks third in total value of transfers ($214 million) and first in average value of transfers ($701,000). 

Depending on how the month of June 2013 goes, the full second quarter of 2013 is almost sure to rank second or first overall in terms of total value of transfers, as the second quarter of 2006 currently ranks second by that measure, with $216 million worth of transfers recorded in that three-month span. 

As would be expected, the two major deals did not significantly impact the relative number of transfers during the time periods. The first quarter of 2011 ranks 15th of 30 in terms of number of transfers (483), while the incomplete second quarter of 2013 ranks last (305 transfers) so far. 

 

Below the mean  

Since January 2006, the quarterly mean for total value of transfers is $126 million. The quarterly mean for average value of transfers is $247,000. The quarterly mean for number of transfers is 510. Recognizing that the data have been skewed by the Dart-Thomas and Ritz deals, the Land and Survey numbers demonstrate a sharp fall in Cayman’s property market beginning in the fourth quarter of 2008, with some stability demonstrated in the past year and a half or so. 

In the 18 full quarterly periods from the fourth quarter of 2008 to the first quarter of this year, 15 of the 18 quarters were below the mean in terms of total value of transfers, 12 of the 18 quarters were below the mean in terms of average value of transfers, and 16 of the 18 quarters were below the mean in terms of number of transfers. 

Prior to the recording of the Ritz sale in the second quarter of 2013, the property market had posted below-mean results for six straight quarters in terms of total value of transfers, four straight quarters in terms of average value of transfers, and 13 straight quarters in terms of number of transfers. 

Value-of-freehold

Source: Cayman Islands Lands and Survey Department

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