The challenges endured by the construction industry have been well documented, as architects, builders and brokers intently await the commencement of high-profile public-private projects that promise to bolster the entire economy through continuing worldwide financial woes.
In the meantime, however, the sector is subsisting on an olio of residential and commercial developments, ranging in size from modest to major.
Architect Donal McGrath said his firm BDCL Architects is working on some large single-family homes. “That’s where the market is right now,” he said.
McGrath, who said most of his projects are on West Bay Road or in George Town, said a number of his large commercial and office projects already have planning approval, but developers are holding off until the business climate improves, possibly by way of impetus generated by the ForCayman Investment Alliance between government and Dart Realty (Cayman) Ltd.
That venture entails closing a portion of West Bay Road, extending the Esterley Tibbetts Highway, remediating the George Town landfill, preparing a new landfill site in Bodden Town and redeveloping the Courtyard by Marriott, shuttered since 2008, into a four- or five-star hotel.
“That hotel has been derelict for years. That project needs to be done just to improve that area of the beach, and it will result in increased activity around that area,” McGrath said. “That area of West Bay Road hasn’t seen a lot of development.”
McGrath said the projects to which he is associated were planned long before the announcement of the Dart deal and moving of the road. “It will change the nature of how West Bay Road will develop. I think it will improve things,” he said.
Dart RealtyThe ForCayman project involves a direct investment from Dart of US$415 million over the next five years, with US$200 million being spent in the next two years. It is estimated that closing the George Town landfill will cost Dart about US$32.5 million; phase one of the Bodden Town landfill will cost US$26.5 million; and the construction value of the Esterley Tibbetts extension is estimated at about CI$26 million.
Redevelopment of the Marriott alone is expected to create 230 construction jobs, plus 170 jobs when the hotel is operational.
While Dart’s Seven Mile Beach project is still nascent, its Camana Bay development continues to mature. In late July, a topping off ceremony was held to celebrate a construction milestone on the Solaris Avenue building, which after its expected completion in June 2012 will be home to law firm Mourant Ozannes.
During the same ceremony Dart Realty COO Jackie Doak announced that the five-story, 68,000 square-foot Class A office building will possibly be joined in the future by a sister building, now being called Solaris Avenue North. That project is in the design phase.
Camana Bay’s public relations manager Joanne Gammage said the Esterley Tibbets extension and Marriott redevelopment are anticipated to start within the next few months. “In addition, enabling phase works for the George Town Landfill remediation, the new waste management facility and Camana Bay’s next phase of residential, beginning with one- to three-bedroom condos, are projected to start in the first quarter 2012,” she said.
Public schoolsAs part of the ForCayman agreement, Dart is to provide US$18 million for community projects, part of which will go to enhancing educational facilities. Before that funding rolls in, government is already performing CI$10 million worth of construction on primary schools across Grand Cayman.
A new multipurpose hall opened 31 May at East End Primary School, while projects are ongoing at Sir John A. Cumber, George Town, Savannah and Bodden Town primary schools. Projects at Prospect and Red Bay primary schools are going through the tender and evaluation process, said Minister for Education, Training & Employment Rolston Anglin.
“All of these projects get us pretty close to where we need to be, but we need to ensure that we secure adequate learning space for the next five years. At minimum we are going to undertake further work to make sure we can accommodate all the students,” he said.
Additionally, contractors are continuing construction on the two new high schools, Clifton Hunter High School Frank Sound and John Gray High School in George Town. Each new school entails about CI$100 million in capital investment, including construction costs, Anglin said.
Clifton Hunter is scheduled to be completed in the first quarter of 2012, at which point it will be ready for use by students and teachers. Then the question becomes whether or not to move in students in the middle of the semester, or to wait until a new term begins.
“Do we move students in during the school year? That’s where the headache would come, as it were,” Anglin said.
That decision will be made after discussion with parents and school leadership, he said. The actual Clifton Hunter buildings are now completed, and contractors are now performing mechanical, electrical and plumbing finishing work, he said.
As for John Gray, Anglin said the government will construct the school in phases over a three-year period, per discussions with the UK government. The first phase of John Gray should be finished sometime during the 2012-2013 school year, he said.
Shetty, Enterprise CityClifton Hunter’s not the only major construction project looming east of George Town. In early August, developers of the Shetty medical tourism hospital announced than an agreement had been reached to locate the planned 2,000-bed hospital on 600 acres at High Rock, the site formerly contemplated for the East End seaport, which appears to have been shelved.
While there are still logistical and legislative hurdles to overcome, the Narayana Cayman University Medical Centre is expected to bring a total direct investment of US$2 billion over 15 years, with US$100 million spent in the first two years, including US$55 million on construction and US$18 million on local labour. The first phase of the hospital is planned to have 140 beds.
Meanwhile, in mid-July, the government inked a definitive agreement with Cayman Enterprise City to establish the special economic zone, to be based on a 500,000-square-foot campus somewhere on the eastern half of Grand Cayman. Construction is expected to total CI$327 million, with a groundbreaking set for the first quarter of 2012. During the development’s first phase, comprising 150,000 square feet, 900 new jobs will be created, with the first 800 or so related to construction.
On Seven Mile Beach, Cayman’s first nine-storey development is metamorphosing the former site of Beach Club. RE/MAX broker/owner Kim Lund said the US$200 million project is right on schedule to be completed by fall of 2013, following the groundbreaking in November 2009. Though the project is nine storeys, the ceiling heights are extra tall, meaning the development rises to the maximum legal limit for a 10-storey building.
In late August, contractors were working on the second floor slab. The WaterColours will have 61 units of 3,600 or 3,700 square feet, with available units ranging in price from US$2.95 million-US$4.05 million. Lund said 18 units had been sold and an additional six had reservations on them.
On South Church Street, a US$40 million high-end residential development is rising on 0.89 acres on the seaside. This summer, the seawall for Oceana was finished, and the three-storey, 14-unit complex is scheduled to be completed in December 2012, said RE/MAX Cayman Islands sales associate Michael Joseph, who is the sales agent for Oceana. In August, crews were preparing the site for foundation work. Construction commenced in October 2010.
The development originally was planned to have 15 units, Joseph said, until a buyer decided to purchase two units and combine them into one. As of late August, eight of 14 units had been sold and Joseph was optimistic that three more contracts would be finalised in September. The units range in size from 2,300-2,800 square feet and in price from US$1.65 million-US$1.99 million.
Joseph attributed the brisk sales to developer Bronte’s commitment to excellence and detail, down to helping buyers navigate the Caymanian residency process, and coordinating to fully customise the interior design of individual units according to the buyer’s desires.
“We’re basically selling out before construction really starts. That’s a testament to the product being provided to the market,” he said.
In addition to the luxury residences, Oceana’s developer is also involved in comparatively smaller projects, both residential and commercial, Joseph said.
“You have to be active across different parts of the market because you can’t overexpose yourself to one slice of the market. You can’t have all your eggs in one basket,” he said.
The Spinnakers at Red Bay is proceeding with that idea in mind, said Joseph, who is also the sales agent for the multi-phased project on 65 acres by Cosmo Development Ltd. “The Spinnakers has the exact same concept, only at a more affordable price point,” he said. “It’s a phenomenal bang for the buck.”
Construction on the first phase of Spinnakers, consisting of three-bedroom duplex homes, began in February. As of late August, work on the first building was rapidly nearing completion, and Joseph expected the first buyers to move in by September. Work on the second building had already begun, and he expected it to be completed by the end of the year.
Each duplex is listed at 2,964 square feet, with prices ranging from CI$495,000-CI$535,000.
He said the developer had originally planned for phase one to consist of 11 duplexes (22 units), but was now weighing whether to build four duplex buildings, and then do standalone homes instead. He said the developer plans to have a variety of homes on the 65 acres, from one-bedroom units to multi-million dollar oceanfront homes, with lots available on the ocean, canals and a lake.
Just down the road from Oceana in South Sound, construction on the second phase of San Sebastian has begun. The 44 units are set for completion in July 2012, joining the 56 units in phase one. Homes in San Sebastian, by Davenport Development Ltd., range from one to four bedrooms, with the smallest units at 955 square feet and the largest at 2,412 square feet. At pre-construction prices, one-bedroom units start at CI$209,000.
Commercial developmentsFoster’s Food Fair IGA recently announced that it will construct a new distribution centre on seven acres opposite the Owen Roberts International Airport’s long-term parking lot. In late August, Foster’s Managing Director Woody Foster said he was hoping to break ground on the 75,000-square-foot facility by about mid-October, pending permit approvals. Construction is anticipated to take about 12 months from the start date, he said.
The new centre allows Foster’s to consolidate its storage, distribution and administration elements in one place.
“This really pulls the whole team together and allows us significant efficiencies,” Foster said. “At the end of the day it is about competitiveness. With rising fuel, increase of food prices worldwide, to mention just a few, we have to find ways to continually streamline our businesses and keep the cost of consumables where people can afford them.”
The building, designed to withstand Category 5 hurricane winds, will be about 450 feet long, 240 feet wide and 50 feet tall. It will include 10,000 square feet of office space. The project architect is Burns Conolly, and the general contractor is The Phoenix Group.
On Elgin Avenue, construction of Cricket Square has entered phase five, with the building of the 58,600-square-foot Willow House. The office building will have a basement, four floors with two office suites apiece, and a small suite and a common area on the fifth floor. Construction of Willow House began in the summer.
When finished, it will join the existing four commercial buildings on 6.5 acres of Cricket Square, including The Pavilion, Century Yard, Boundary Hall and The Brasserie.
In the first quarter of 2011, contractors for Appleby Cayman broke ground on a new six-storey Class A office building, located between the firm’s existing buildings Clifton House and Artemis House on Fort Street in George Town. Upon its expected completion in late 2012, the new tower will provide the company with 80,000 square feet of work space and meeting facilities.