Land and marina development, Long Island, Bahamas.
* Fully serviced plots, ready to build on, from a quarter of an acre to just under 1 acre on Long Island.
* Long Island, one of the out islands of the Bahamas is regarded as one of the most beautiful and ripe for an international marina and golf course to meet market demand.
*Prices from US$60,000 to US$500,000
* 10% down, completion July 2006 to May 2007 according to preference.
* All buyers have the right to buy into the proposed marina at US$480,000 or golf development US$320,000, compared with an estimated US$1.5 million and US$1 million respectively to the public.
* Developer will buy back the plot you purchase now at 25% more than the price you paid, this supplemented by a cash deposit of 10% of the amount required to trade up could form the deposit for your marina or golf plot in approximately 18 months.
* Marina and golf plots at the above prices will be 15000 square feet (circa one third of an acre) and will have permission for up to 4 dwellings along with 100 feet of dockage per plot.
* Huge American rental, second home, holiday and retiree market on the doorstep.
* A number of high profile UK sports players have bought into the project.
This is an incredible opportunity to invest at the very beginning stages of what will be a world class marina and golf complex in a Caribbean paradise. Similar developments on other Bahamian Islands are attracting prices for land in excess of a million US dollars. Long Island is regarded as one of the most beautiful in the Bahamas due to its diverse terrain, pristine Caribbean beaches and rugged Atlantic coastline. A maximum of 6kms in width at any given point, land on Long Island provides investors and home owners with the benefit of incredible views and proximity to both the Atlantic Ocean and the Caribbean. The proposed marina and golf course will add further capital growth and rental potential as Long Island catches up with its neighbours to become a top international destination.
The Bahamas an archipelago off the Florida coast
The Commonwealth of the Bahamas is an English speaking archipelago of 700 islands located in the Atlantic Ocean to the south east of Florida and north of Cuba and the Caribbean. It has a population of 303,611 concentrated on the islands of New Providence (210,832 residents) and Grand Bahama (46,994 residents). The Bahamian capital city is Nassau on New Providence; the second largest city is Freeport on Grand Bahama.
A growing tourism led economy
Since attaining independence from the UK in 1973, the Bahamas has prospered through tourism and offshore banking. These two sectors now account for 60% and 15% of overall GDP respectively and the Government is currently looking to attract increased levels of foreign investment to the country.
Tourism directly or indirectly employs 50% of the Bahamian labour force and provides the main engine for the countrys economic growth. The Bahamas have been ranked as the 8th most popular world vacation destination for Americans who currently make up 80% of the country’s visitors. In 2005, the Bahamas received around 4.3 million visitors (source: Central Bank of the Bahamas) including tourists from Western Europe, South America, Japan and South Africa as well as those from North America.
The Bahamas is also one of the worlds most visited cruise ship destinations, receiving around 40% of all cruise visitors to the Caribbean. The Caribbean Tourism Organisation stated in its recent annual report that the Caribbean region received nearly 20 million cruise ship passengers in 2005 as well as 22.5 million other visitors.
Driven by tourism, the Bahamas maintains one of the fastest growth rates in the Caribbean. In 2004 it averaged growth of 3% and an overall GDP of $5.7 billion.
The Bahamian Property Market
Overview, an expanding second home destination
With its palm-fringed beaches and easy-going pace of life, the Bahamas is a very attractive location for holiday-makers and retirees alike. And with property prices in neighbouring Florida skyrocketing, second home and retirement investors are flocking to the more affordable Bahamas.
The Bahamian Minister of Financial Services and Investments recently stated that investment to the Bahamas is increasingly focused on the second home and high-end residential community markets. The Government is welcoming this as holiday homes provide a much needed alternative choice of tourist accommodation in the context of an underdeveloped Bahamian hotel industry.
A newly released Central Bank report indicates that home ownership is rising dramatically in the Bahamas. New mortgage commitments have doubled, growing from $79.7 million in 2004 to $143.8 million in 2005. This increasing demand has in turn stimulated a significant amount of real estate development in both the private and public sector. The Central Bank report lists this construction boom as a real indicator, suggesting that economic growth in 2006 should remain firm.
The Bahamas is an English-speaking Commonwealth nation and a secure zone of the USA. The Bahamian democracy is modeled on that of the UK with a bicameral parliament and elections every five years. The country is politically stable.
The legal system in the Bahamas is based on the British model and independent of political interference. Most attorneys in the Bahamas have qualified in the United Kingdom and consequently are very familiar with British legal practices and concepts. The Bahamian legal framework is well-established and has provided an attractive environment for international investors for over three decades. Foreign ownership of land extends to freehold.
A US-dominated market
Given its proximity to the US mainland, the Bahamian market for holiday and retirement homes is dominated by American investors looking for properties in convenient and safe waterfront areas. Demand is already massive and rising rapidly. There are currently 30,000 Americans resident in the Bahamas.
Tourism is the key national development strategy
With the national economy currently revolving around income from tourism, the Bahamian Government is encouraging foreign investment in the form of tourist construction as part of its overall economic development strategy. The government is providing incentives to investors to build multi-million-dollar residential/resort complexes on the habitable islands. One of these anchor developments has already boosted infrastructure and the economy of one of Long Islands neighbours, Great Exuma.
Lying towards the south of the Bahamian archipelago, Long Island is one of the less populated islands with just 2,992 residents (under 1% of the Bahamian population). The local economy is dominated by fishing and subsistence farming.
Tourism on the island is at present relatively undeveloped. It has two main resorts, both based in the north, one at Cape Santa Maria and the other at Stella Maris. Tourists to the island are attracted by its fabulous diving possibilities, superb deep sea and bonefishing, or more simply are just looking to relax on one of the islands many stunning beaches away from the maddening tourist pack. Long Island also receives a lot of island hoppers exploring the Bahamian archipelago, including significant numbers of private flyers.
While the real estate market in the Bahamas capital island, New Providence, has been steadily growing for quite some time, there has recently been remarkable growth of interest in the so-called family islands, of which Long Island is one. The Government is welcoming investment in these smaller islands as a means of spreading the benefits of tourism to a broader cross section of the Bahamian population.
The Bahamas in relation to the wider Caribbean region
Long Island: The most beautiful island in the world.
Long Island is 240km southeast of Nassau, the Bahamian capital. It is very long (128 km) but narrow, no more than 6.5 kilometres at its widest point. The island has a diverse coastline. To the east, rocky cliffs and caves drop dramatically into the Atlantic Ocean and the west is dominated by wide, palm-fringed, sandy beaches with calm, aquamarine waters.
Inland, a steep ridge forms a spine along the length of the island. As you travel south, the rugged hills of the northeast slowly give way to dazzling white salt flats, which sit between sultry mangrove swamps and beautiful pristine beaches.
This dramatic diversity has inspired many to rate Long Island as one of the most beautiful islands in the Bahamas, including Marvin Hunt writing in The Washington Post on February 27th, 2005. Christopher Columbus went even further describing it as The Most Beautiful Island In The World when he first came ashore.
Pristine, sandy beaches
Long Island has a number of stunning beaches, mainly on the Caribbean side. Fifteen minutes from Stella Maris, you’ll find Cape Santa Maria beach which - with three miles of pure white, powdery sand is unquestionably one of the most beautiful beaches in the world. A posting on Trip Advisor last year remarked: I recently returned from a stress free week at Cape Santa Maria Beach Resort on Long Island. This has got to be the best kept secret in the Bahamas. 20 beach front Bungalows steps from the most beautiful beach I have ever seen and I've seen a few. Buyers of these plots benefit from guaranteed access rights to Cape Santa Maria beach.
The Bahamas and Long Island
Things to do
Long Island is home to the worlds deepest Blue Hole which drops 600 feet in the sea bed near Deadmans Cay. This along with its unspoilt reefs and unpolluted, turquoise water brings divers to Long Island from far and wide. Other water activities include sailing and fishing.
* Direct flights from London to Nassau take 9 hours
* British Airways operate five flights per week from £379
* Virgin Atlantic has weekly flights from Gatwick (currently on Mondays) from £355
* From Nassau, BahamasAir flies daily to Long Island in 45 minutes at a cost of US$164 return
For more information on Long Island and the Bahamas, please follow the links below:
About the developer
The developer is a 17-year-old privately-owned Jersey-registered company. The marketing team is based in Leicester, and although that company is registered in the UK, it is under the same ownership as the developer.
The architect for the proposed development is Peter Pike. A British citizen born on Long Island, he is now based in Florida Keys. Peter is an expert in marina design and development and has been involved with 14 marina developments in the Caribbean and North America to date. He will project manage the construction phase, using his knowledge of both marinas and Long Island itself to maximise the possibility of planning permission being granted (see next section for details of the planning application process).
The first phase of the project - the purchase of Stella Maris land - is being financed through the sale of 300 individual plots ranging in size from a quarter of an acre to just under one acre. Plots over 15000 square feet (just over a third of an acre) already have planning permission for up to four attached dwellings up to two storeys. Plots under a third of an acre have planning permission for one two-storey dwelling. So far, almost 150 plots have been sold since December 2005, with approximately the same number still available.
The second phase of the project will be the development of a new resort which will house a brand new marina, golf course and hotel as well as residential and commercial complexes. This stage will be financed through several sources including:
* The pre release of marina and golf plots to Stella Maris land owners for a discounted price of US$320,000 to $480,000. This mechanism is planned to raise an estimated US$96 million (300 x US$320,000)
* The developers are currently in negotiations with potential partners who are very interested in direct involvement in the project. Further details about partnership involvement can be provided by the developers.
About the development
Overview of the plans
In December 2005, a British owned development company paid a deposit on a large piece of land on Long Island. This consisted of:
* Existing building plots with planning permission for residential development (see below for details)
* 950 acres of undeveloped land ideally located for a large marina and championship golf course
Over the next 18 months the developer is looking to obtain planning permission to build a resort on the undeveloped land which will encompass the following:
* An international leisure marina including residential plots and adjacent dockage
* Canal residential development with individual dockage of 100 square feet for each plot
* A championship golf course. The golf course on neighbouring Great Exuma has been designed by Greg Norman. The developer will partner with a similar high profile professional to design this course.
* Residential golf course villas and apartments
* A spa and hotel complex
* Commercial development
The investment opportunity
* The 300 existing fully-serviced building plots of Stella Maris land with planning permission are being offered for sale in several phases over the next 18 months
* Prices will increase the closer the developers are to receiving full permissions for the project; if full planning permission is granted, values will obviously increase significantly.
* Plots are currently selling at 20% below a qualified valuers estimation
The plots on offer
* Plots range in size from ¼ of an acre to just under one acre
* Plots over 15000 square feet have planning permission for up to four two storey dwellings
* Plots under 15000 square feet have planning permission for a single dwelling not higher than two storeys
* So far, almost 150 plots have been sold since December 2005, with approximately 150 remaining
If planning permission is granted
If full planning permission for the proposed marina resort is granted, plot owners will be offered the right to buy into the new resort at a significantly discounted rate:
* There will be a 60 day period during which reservations for substantially discounted marina or golf plots will ONLY be accepted from those who have already bought one of the original plots released in Stella Maris
* Owners will be offered the option to buy a resort property (alongside the marina with dockage or adjacent to the golf course all 15000 square feet with permission for up to 4 dwellings) at a special pre release price of US$500,000 in the marina or US$320,000 on the golf course These prices will never be available to the general public. The projected price for these plots at todays values is around US$1.5million in the marina and US$1 million on the golf course
* Buyers will be offered the opportunity to part exchange their Stella Maris plot against a resort property at a minimum of 25% more than the purchase price
* Anyone buying a Stella Maris plot for US$250,000 will be able to reserve one resort property for every US$250,000 or part thereof already invested in Stella Maris
* Those plot owners not interested in investing in the new resort will be able to assign their right to reserve a resort property at the pre-release price. This right is likely to attract a significant price.
Planning permission for the marina resort is yet to be granted but there are strong grounds to believe this will be just a matter of course:
* The Bahamian Government has clearly stated its intention to oversee foreign investment to create an anchor tourist development on each of the significantly populated islands; Long Island has no such development at present.
* Local people are overwhelmingly in favour of such a development
* Young people are desperate to find work on Long Island which a development like this would provide in the short and long term. The Government is currently looking to boost employment for local people in the Family Islands (of which Long Island is one).
* Local people who have left the island in search of work would be able to return as a result of new employment opportunities
* The developer is working with a very experienced architect, the current owners of the Stella Maris Resort and Government officials to ensure that they present a flawless proposal for the marina and golf development
If planning permission is not granted
* If permission is not granted, buyers will still have a fully serviced plot of land, many of which have views to both the Atlantic and Caribbean, with planning permission for residential or (some) commercial development
* The land is in a highly desirable location on a beautiful Bahamian island, a short walk to both the Caribbean and the Atlantic Ocean, where crime is virtually non-existent and English is the common language
* The US market for holiday rentals is currently booming, indicating plots should go up significantly in value within the short-medium term
* The developers will still seek permission for a smaller marina and it seems very likely a large marina will eventually be built on the 950 acre site
Latest news for this projest.
On June 20th 2008 the Port St George marina and golf resort was granted full government approval for the development.
This follows the latest news that
from July 1st 2008 the import of construction materials used for the construction of all new housing on Long Island will be excise tax and import duty free.
To mitigate the above risks, this investment opportunity also incorporates strong security for buyers:
* If the marina proposal is not approved, buyers retain full legal title (freehold) to the original plot purchased including planning permission for residential development
* All plots are currently being sold at 80% of a qualified valuers estimation
* Davis & Co, a UK legal firm, is carrying out additional title checks and will hold the 10% deposit in escrow until completion. This is in addition to the Bahamian lawyers who are legally obliged under Bahamian law to act for both the vendor and purchaser. They have already been appointed. Details below
Projected investment performance
Predicted capital gains
There are currently robust structural factors at play in the Bahamian property market that point to rising future property values on Long Island over the medium to long-term:
An overheating Florida market:
With rising inventory and finance costs in the Florida market, American second home and retiree investors are increasingly looking to their more cost effective Caribbean neighbour, the Bahamas, for opportunities. Property values in the Bahamas are currently low in many areas but are appreciating rapidly in line with rising demand. These market conditions create the potential for strong capital gains with only a relatively small initial investment required, see related article in The Bahama Journal
This high level of demand is reflected in the large number of tourist developments taking place in the Bahamas at present, with overall investment for marinas, hotels and golf resorts totalling US$1,535,675,000.
The Bahamian Government has recently approved new hotel and residential developments on many of the Out Islands, including the two neighbouring Long Island:
* Rum Cay, a new development and international airport are being planned. The new airport will be the size of that at Nassau boosting tourist access to Long Island.
* Great Exuma, where Emerald Bay Resort and February Point are virtually sold out
Demand for marinas in the southern Bahamas:
The moratorium on new marinas in Florida Keys for environmental reasons is leading US yacht owners to look to the Bahamas for dockage
The marinas of the northern Bahamian islands closest to Florida are running at full capacity with no scope for expansion prompting developers to look to the southern islands for future projects
A beautiful island
Long Island is one of the most beautiful islands of the Bahamas and therefore seems a likely target for future tourist development
The German sellers of the Stella Maris estate have included eco friendly restrictive covenants to ensure that the development will remain low density and low impact to preserve the natural beauty of the island
Similar developments on other Bahamian Islands are attracting prices for land in excess of a million US dollars and prices are not going down:
* On adjacent Great Exuma, sea front plots in the Emerald Bay Resort with permission for only one dwelling and a shared dockage of 140 ft (compared with 100 ft of individual dockage planned at this resort development) are currently selling for US$6.5million
* At February Point on Great Exuma, a plot with a marina view is selling for US$750,000
* On neighbouring Rum Cay beachfront, hill top, and hill side plots are selling at prices starting from US$250,000
The Bahamian holiday rental market is very strong providing investors with very attractive predicted yields regardless of whether they decide to opt in to the marina development:
For those investors not interested in the marina development and looking to develop their own holiday residence, the cost of building in the Bahamas may be as little as US$65.00 - $80.00 per square foot for low-cost housing
However, a modest or minimum structure consisting of concrete block construction, timber roof framing and asphalt roof shingles will cost between US$100.00 to $150.00
For good standard buildings with European or American quality finishes a budget is $175.00 per square foot is recommended
Building standards are higher in the Bahamas than in South Florida. The majority of homes in the Bahamas are made from concrete block or poured concrete construction and are built to meet a very strict building code. (Please request more information about construction costs if you are interested in this.)
A climate conducive to tourism
The Bahamas climate is fairly consistently warm (24-32 °C) and conducive to a long tourist season of 10 months.
The southern Bahamas are rarely in the direct paths of hurricanes, which usually bypass the islands before hitting mainland North America directly.
A year-round market
The winter market is a major draw, with December-to-May prices as much as 25 percent higher than those during the rest of the year.
During Spring Break in February and March students often crowd the major resorts.
In late spring and early summer the islands are popular with bargain hunters and divers as well as anglers and sailors drawn by the summer round of fishing tournaments and regattas.
In late summer and autumn, other travellers escape to the Bahamas to enjoy the relative tranquillity of this period.
Regarding the rental market, you can refer to Self Catering Homelidays where Long Island villas rent from between £576 to £2,320/week.
Boosted transport links to Long Island
Neighbouring Rum Cay has just had planning permission approved for an international airport the size of Nassau international which will mean even easier access for visitors to Long Island
Planning permission already approved
All plots in this development have planning permission for at least one two-storey dwelling already approved, with all plots over 15000 square feet having permission for up to four dwellings (not detached)
Massive American holiday market
The American holiday market is massive. In 2005, the Bahamas received around 4.3 million visitors, 80% of which were Americans (source: Central Bank of the Bahamas). The Bahamas have been ranked as the 8th most popular world vacation destination for Americans.
Comparable rental values
2 bedroom Villas (actually apartments) at Cape Santa Maria, about 5 miles north of the Stella Maris Estate, rent for between US$675 and US$795 per night in the high season and approximately US$400 per night in low season. The Cape Santa Maria villas are on the market at US$679,000
It is possible to obtain mortgages for the purchase of land in the Bahamas with LTV of 50% and a minimum loan amount of $250,000. The interest rate would be approximately 7.67%
* Step 1: Reserve plot and pay 10% deposit (held in escrow at Davis & Co. until completion whereupon all monies will be transferred to the current owners of the Stella Maris estate)
* Step 2: Completion planned for between July 2006 and May 2007 when the 90% balance is due
* Purchase price: US$50,000 to US$500,000
* Stamp Duty: 2-5% of purchase price depending on price bracket
* Bahamian lawyers fee: 1.5% of purchase price (or US$750 whichever is greater) plus a fixed amount of US$770 per transaction
* UK legal fees US$750 including VAT and notaries fees
* Additional costs of obtaining a Bahamian purchase permit:
* Obtaining police clearance £10 (estimated)
* Bank reference £10 (estimated)
* The right to buy into the marina or golf development is assignable to a 3rd party and could be sold for potentially a very significant amount of money.
Full and detailed information is available by e-mail, here
* UK lawyer
Mr Iain Unett
Davis & Co Solicitors
27 Old Gloucester St
London WC1N 3XX
Tel: 020 8123 6373
E-mail Davis and co office
N.B. Iain Unett is happy to speak directly to buyers about any aspect of the purchase process.
Sean B Callender & Co
E-mail Callenders, Freeport office