Lund Report: Tracking the cash

With our real estate market finally bottoming out and poised to slowly start into a steady upward cycle, this is a good time to look at future trends and where investment money is heading. These trends will determine where to find the best opportunities over the next five to 10 years.
Whether some of us want to admit it or not, the Cayman Islands are committed to growth and development. We need to constantly attract foreign investment.  These are the funds that drive our economy, build our schools, pave new roads, and pay for our high standard of living. Without exception, we all receive some part of these funds, either directly or indirectly.  Our economy and livelihood is driven by this investment. 
Without it, our economy slows and life becomes more difficult and stressful.  For anyone who doubts this, just look at how life has changed for many of us, in this last year.  Tourism and financial services activity, which brings in most of this foreign investment, has slowed down measurably and it has impacted us greatly.
Having said that, some real progress is being made to develop a master plan that makes sense for the long term future of the Cayman Islands and those who need to make a living here. Government is having to make some very difficult decisions, if we are to compete with other tourism destinations and financial jurisdictions that are aggressively taking market share from us. These decisions will also have a huge impact on real estate investment and opportunities. 
As one example, the growth of George Town and its surroundings have ultimately encroached on some critical facilities, like the downtown cargo port, airport, and dump.  These facilities were put in locations which made sense for them to be there, when they were initially established.  However, this was decades ago.  If the Cayman Islands are to survive in this increasingly competitive world, we need to move and improve these facilities.
This brings us to the question about where one should invest in real estate.  There is no doubt that the next best area of growth is going to be the eastern side of the island.  Over the next 10 years, Colliers on the northeast coast of Grand Cayman will likely experience the most explosive capital appreciation and large development.
Why Colliers? This area has large parcels of land on the sea, which is what high end resorts now demand, as well as huge acreages inland for golf courses, retail/commercial projects, and infrastructure. With a new road planned to connect this area to George Town, it is a natural for future development.  Plus, a new airport with a proper runway for long haul jets will, at some point, need to be built away from the congestion in George Town and the only choice is to go to the east.
The Colliers area already has four resorts – 20 room Morritt’s Grand Resort, 179 room Morritt’s Tortuga Club and Resort, 110-room Reef Resort, and 18 one and two bedroom Compass Point Dive Resort. Now, there will be a substantial addition to this critical mass with the equivalent of about 225 more rooms and a five-star internationally branded resort with The Island Resort and Residences.
The opportunity for investment is in land around, and in, this immediate area.  This is especially true for sea frontage parcels, while prices are still reasonable.  But, also investment into infrastructural development such as apartments for staffing accommodations, entertainment businesses, restaurants, retail, and other types of resort properties/businesses to service this expanding market of affluent visitors and investors.
Just watch The Island Resort and Residences being built over the next couple of years and you will understand the scope of this opportunity. Other resorts will follow, creating demand for more land to develop and more businesses ventures to support this progress.  The eastern side of the island is the next new resort area in Grand Cayman.