How NCB Group is adding value to Cayman’s real estate market
Over the past 20 years, the Cayman Islands have seen continued growth in the market value of real estate. Despite Covid-19 closing local borders, the total sales volume of the local market increasing by 4.3% to US$666.5 million in 2020, with the value of the average transaction increasing from US$769,289, in 2019, to US$971,546.
Sales and Marketing Manager Tania Knapik, notes NCB Group’s portfolio of world-class properties has helped attract a diverse pool of investors looking for a safe harbour to either invest in or call home to the islands. As a result, those who have invested in NCB developments see a 36% to 43% return on their investment.
As more eyes turn to Cayman, Managing Director Matthew Wight, notes NCB will continue to innovate, using the latest technology, ensuring their projects not only satisfy the needs of today but are also built with Cayman’s future in mind.
Discover where NCB’s journey started and what we’ve already accomplished by checking out the complete anniversary series.
Investors will benefit from the Hilton Honors programme’s more than 115 million members.
After 20 years of developing sustainable residential and commercial communities in the Cayman Islands, NCB Group has expanded its services to construct Cayman’s first boutique wellness and business hotel, Kailani Grand Cayman.
Sitting down with Matthew Wight, NCB Group’s Managing Director, he shares the reasons behind the company’s growth into the hospitality industry and what Kailani investors can expect from the Curio Collection by Hilton partnership.
NCB Group has a reputation as a leading residential and commercial developer, so why is it branching into hospitality?
There has been a big push by the Ministry of Tourism and Department of Tourism to reach 500,000 stayover tourists per year. Stayover tourists are more lucrative for the islands because of their higher spending rates, particularly locally produced products and services.
In Cayman, the issue is the short supply of hotel rooms and the gap in the types of products on offer—a gap NCB Group is working to fill. Kailani was conceived to meet the needs of an underserved market and provide a top-end business hotel and unique wellness tourism offering for Cayman.
As NCB Group is a leader in sustainable development, environmental sustainability and conscious living have been at the forefront of every decision for Kailani, from building practices to sourcing products and materials to help redefine the future of tourism for Cayman’s hospitality sector. We are also bringing our expertise in human sustainability through design into this market by building the Kailani experience around the principles of personal well-being.
What sparked the idea for Kailani’s business and wellness concept?
Wellness is the fastest growing sector in tourism. The industry is valued at over US$ 735 billion in 2020. We saw it as an opportunity not only for us as a company but also for the jurisdiction to embrace this market.
Trends show that wellness travellers stay longer during their trips and are usually more willing to spend on experiences.
Kailani creates a brand-new hospitality product for Cayman’s capital, George Town—a hub for shopping, dining, culture and finance. Business travellers will be conveniently based just steps away from the island’s business district, while leisure guests can enjoy the world-famous Seven Mile Beach on their doorstep.
How is Kailani’s concept of wellness different from what we see in other parts of the world?
In most hotels worldwide, the spa and fitness facilities are typically hidden in the basement or tucked away on the first floor. At Kailani, we’ve made the spa and wellness facilities the hotel’s centrepiece by placing them on the seventh floor, the highest value of real estate on the property.
Holistic experiences and wellness programming are being built into Kailani’s daily offerings, including in-room yoga mats, circadian rhythm lighting and farm-to-table dining sourced locally from our farm in East End.
What were you looking for in a partnership with a hotel brand?
Through Kailani, we wanted to create a boutique stay focused on the customer experience, breaking away from the traditional cookie-cutter hotel rooms that travellers are used to seeing. We had a clear direction that we were heading in and wanted to partner with a strong international brand that could support our ideology.
Why did you choose to partner with the Hilton brand rather than run the hotel independently?
The US market contributes over 70% of hotel guests to Cayman’s tourism industry, and many of these people are very loyal to their brands.
The Hilton Honors programme has more than 115 million members worldwide—that’s a formidable and captive audience for bookings.
The other notable aspect is that 52% of Hilton bookings come directly from their website or marketing outreach. In the days of Expedia, Travelocity, Booking.com and other online travel agencies that take commissions from every room they book, 52% is impressive and shows loyalty to the Hilton brand.
How does the partnership with Curio Collection by Hilton differ from traditional hotel franchising?
Usually, if you’re working with a hotel brand, you would have your design and brand handed to you. While the Hilton itself has set guidelines, the hotels in the Curio Collection have more freedom to create their own identity. In fact, the hotels within the collection are encouraged to incorporate the local culture into their brand.
This way, we get the best of both worlds; Kailani maintains environmental sustainability and a strong cultural identity as a part of their ethos while still receiving the backing of a large, internationally known brand.
What are some of the ways Kailani will cultivate its own identity and lifestyle? Why is this important?
We created a muse for the hotel – a young, spirited business traveller, Kailani, whose roots lie firmly in Cayman but whose travels have given her a global perspective and innate sophistication. Her effortless elegance and love of her home’s natural environment unfold throughout the hotel.
Our muse is part of the storytelling exercise we did when building out the Kailani brand. We wanted to make it memorable for guests, especially in Cayman, where you see many repeat visitors year after year. This hotel offers experiences you wouldn’t expect in the heart of the city.
What are some of the ways people can invest in Kailani?
A total of 80 suites (90 hotel keys) are available for purchase at Kailani, including spacious studios with in-room kitchenettes and two- and three-bedroom suites with large living areas and private terraces. A collection of lock-off suites offer a unique feature to owners, allowing bedrooms to be locked-off to create two functional hotel suites.
There is also the opportunity to live at Kailani at one of the lowest prices per square foot for Seven Mile Beach-front property. So, if you want to spend six months a year living at the hotel and have the unit as a part of the hotel inventory for the other six months, you can do that. But there are only six of these residential units where people can live year-round.
How does the Hilton partnership improve the value of Kailani for investors in the hotel?
The partnership with Curio Collection by Hilton is a franchise agreement instead of a management fee, so the hotel essentially controls all the decisions. Through this agreement, we can drive the operational outputs to ensure the highest return on investment for our investors.
With 52% of bookings coming directly through Hilton channels, the cost of bookings is also reduced, meaning the return for the investor is increased.
Being a part of the Hilton brand, there’s a vast network behind us, thanks to its 115 million members. That allows us to focus on Kailani’s operations and unique guest experiences. Plus, even when guests book using Hilton Honors programme points, the unit owner is still repaid for those nights.
We’re expecting average occupancy at Kailani of more than 70%.
Are there other benefits for investors?
In addition to ownership, there are two weeks of usage a year that comes with your purchase. That can be spread throughout the year or shared with your family and friends. Plus, if you’re making reservations outside of the two weeks’ stay, you get a 50% discount on the nightly rate for rooms within a 30-day window.
Kailani residents will also have access to the hotel’s two restaurants, poolside café and in-room dining services, as well as a fully equipped gym and wellness centre while benefitting from additional owner perks such as a 10% discount on all food and beverage purchases at the hotel and Hilton Honors membership status.
How can investors learn more about Kailani?
Email info@ncbgroup.ky,viewour investor brochure and sign up for the Kailani newsletter to stay updated on the hotel’s progress.
How NCB Group evolved to meet the changing needs of Cayman’s community
Catering to the Cayman Islands’ diverse population requires a detailed understanding of each unique individual’s needs throughout their purchasing journey, build and ongoing property experience. Ensuring these needs are not only met but exceeded has fuelled the fire of NCB Group’s expansion into 10 vertically integrated service lines.
Managing Director, Matthew Wight, notes the natural evolution of NCB allows the company to create a seamless transition between development and construction to property management and maintenance. Ultimately, this leads to a more pleasant experience for home and business owners, looking to reduce costs and gain more peace of mind over their assets.
Beyond developing its service lines, NCB has also expanded into the hospitality industry, helping Cayman grow its stake in the US$ 683.5 billion wellness tourism industry.
Throughout their growth, NCB has always aimed to build with Cayman’s future in mind. Discover our goals for the future and where it all started by exploring the complete 20th anniversary series.
Situated at the ocean’s edge, with exceptional views of the setting sun, the Cayman Islands’ first luxury business and wellness hotel, Kailani, takes its name from the place where the sea meets the sky.
Introducing Kailani
A partnership between NCB Group and the Curio Collection by Hilton, Kailani was conceived to meet the need for a top-end business hotel and provide a unique wellness tourism offering for Cayman.
Located within striking distance of the island’s business and finance hubs, it offers a soothing retreat for those travelling for work, with on-site conference facilities ensuring productivity is never compromised. But its waterfront position, farm-to-table inspired dining, and seventh floor state-of-the-art spa make it equally enticing for leisure travellers seeking a healthy and restorative vacation experience.
A boutique hotel, Kailani features a total of 80 suites (90 hotel keys). Designed to offer a sense of home within a hotel, the one-, two- and three-bedroom floor plans include options with kitchens, dining areas and living rooms. For the ultimate in elevated living, penthouses feature three-bedroom suites, far-reaching views and private pools. For those who would like to live the resort lifestyle, six units will be available as full-time residences.
Inspired Design
Florida-based interior design firm, Marzipan ID, which has a wealth of experience working with major luxury hotel operators, will enhance Trio Architecture’s modern design with interiors conceived to create a sense of wellbeing for guests whilst inspiring exploration and curiosity.
“Our design studio mantra is ‘Exclusivity with Soul’,” Jude Mulhern, design director, explains. “So it was important to bring the culture of the island to life through our design while delivering a luxury hotel that would feel both unique and exciting to both visitors and islanders.”
Marzipan ID created a ‘character muse’ as their starting point to develop the interior concept: a young and spirited business traveller, Kailani, whose roots lie firmly in Cayman but whose travels have given her a global perspective and innate sophistication. Her effortless elegance and love of her home’s natural environment unfold throughout the hotel.
This ‘character’ is expressed in a fusion of rustic, native materials – driftwood, raw limestone, natural woven light fixtures and living, green elements – with minimalistic black light fixtures, polished concrete finishes and globally inspired fabrics and furniture.
Because creating a sense of place enhances the guest travel experience, Mulhern explains, this is woven into both public and private areas: in the bar a custom light fixture was inspired by the old tradition of locals gathering to crack almonds; the screen in the Lobby Bar pays homage to one of the island’s oldest architectural landmarks, Pedro St. James, and a cabinet in the guest rooms is inspired by Miss Lassie’s house and paintings.
In the top floor spa – Kailani’s crowning glory – the designers took inspiration from Cayman’s geography and landscape, with an ‘above and below the sea’ concept that capitalises on the spa’s elevation to create an uplifting and euphoric ambience.
The same design philosophy informs all areas of the hotel so that as guests move from space to space, they will be able to explore different facets of the design concept and begin to uncover the stories of Cayman’s history, culture and nature.
Own at Kailani
Investors in Kailani will have use of the hotel’s exceptional accommodation and amenities for two weeks a year. For the rest of the year, owners’ units are offered as guest accommodation, with owners receiving 50% of the rental fee with an expected gross annual return of up to 11%.
Units at Kailani are priced from US$575,000. For more information on availability click here.
NCB Group’s President highlights community as the key to success for businesses in Cayman.
After Covid-19 challenged the way we conduct business, NCB Group’s President, Naul Bodden, notes it was the company’s founding vision, of crafting communities through constant innovation, that sustained the company’s growth. That growth saw a team of 3 expand into 100 employees in 20 years.
As 2020 reinforced the need for community, Senior Manager of Development, Design & Client Relations, Candice Bahadur, notes NCB continues to design developments focusing on bringing people together. Whether these are green spaces, playgrounds, rooftop lounges, gyms, cabanas, outdoor grills, or Cayman’s first lazy river, NCB developments always enhance the lives of those, who live there.
For NCB, a commitment to sustainability has also helped them cater to the needs of the islands. NCB’s Sustainability and Design Manager, Steve Schiffbauer, notes that more home and business owners are seeking to become energy independent to reduce costs and their impact on the environment. Anticipating these needs and providing solutions has helped NCB to flourish throughout the last 20 years.
NCB Group strives to build with Cayman’s future in mind.
A big part of this mission is creating a balance between the impact the construction industry has on the local environment and doing our part to protect and preserve the Cayman Islands’ natural resources. That’s why it’s been so important to the group to continue to give back to the community.
As a part of this mission, NCB Group has donated CI$5,000 to the National Trust of the Cayman Islands’ Land Reserves Programme to support their effort to safeguard Cayman’s environment across our three islands. As a not-for-profit organisation, their work includes the acquisition and conservation of local environmental sites, such as the Mastic Trail, Brac Parrot Reserve and The Salina Reserve, and NCB is pleased to support their efforts to preserve, through ownership, a target of 11% or more of Cayman Islands’ undeveloped land.
The National Trust’s operations extend far beyond the environment.Their projects also help to preserve sites of local historical significance; educate the community on the importance of the natural environment and culture, and support scientific field research to develop our knowledge of Cayman’s native and indigenous flora and fauna.
As NCB celebrates its 20th anniversary in 2021 and continues to grow, we will also continue to do our part to make a positive impact. Not just through our own projects but through those with whom we partner with and support. Because we’re not just building our future, we are preserving our present as well.
One of the best parts of the development cycle is seeing owners’ excitement as they turn their completed houses into homes.
So, when the owners of the third and final block of SOLARA moved into their three-story, three-bedroom townhouses recently , we were excited to watch as each family put their own finishing touches on their new home.
Joining existing NCB communities Cypress Pointe and Cypress Pointe North, this sustainable development of 26 waterfront residences in sought-after Crystal Harbour boasts a private marina with individual boat slips for canal-access to the North Sound, a clubhouse with a resort-style pool, a children’s playground and state-of-the-art fitness centre for the ultimate island living experience.
Furthermore, as with most NCB developments, all of SOLARA’s energy-efficient townhomes are powered by solar panels and cooled by geothermal technology, significantly offsetting owners’ electrical bills so that residents can enjoy all the pleasures of island life whilst creating minimum impact on the local environment.
For more information on SOLARA and our other residential developments, email info@ncbgroup.ky.
In addition to our team of experts, NCB Group also partners with many local and international experts in their fields to ensure our projects don’t just meet the needs of our clients but also exceed their expectations.
Interior Design Group [IDG] has been crafting inspired living in the Cayman Islands since 2003.IDG centres their designs around their clients’lifestyles, todevelop spaces that are both beautiful and functional.
IDG’s detailing at a SOLARA development
IDG recently fitted out living spaces in homes within two of our Crystal Harbour residential developments, Cypress Pointe North and SOLARA.
Cypress Pointe North was one of the first sustainably built communities in the Cayman Islands, and is still one of the most sought after neighbourhoods on the Seven Mile Beach stretch.
Cypress Pointe’s bedroom furnished with IDG
Boasting semi-detached homes and one-to-three bedroom condos, IDG turned this three-bedroom villa into a contemporary yet cozy family home by grounding their design in neutral tones that complements its open floor layout.
Cypress Pointe’s open kitchen and dining area
Across a private marina, SOLARA is one of our newest collections of three story, three-bedroom luxury townhomes. Here, IDG combined timeless details and natural textures to achieve a space that exudes modern coastal living in this sustainable smart home that overlooks Michell’s Creek and has direct boat access to the North Sound.
For the past two months, there has been a hush across Grand Cayman while work on construction sites has ceased due to the restrictions imposed as a result of the COVID-19 pandemic.
The closure of construction sites has undoubtedly affected the workload of Cayman’s leading residential and commercial developers, NCB Group.
Yello asked NCB Group Managing Director, Matthew Wight, to share some insights about how his team has adapted to working from home, some of the challenges experienced and what the future looks like post-COVID-19.
Back in December 2019, when you first saw reports of the coronavirus outbreak in China, what were your initial thoughts?
To be honest, I did not fathom that it would impact us specifically or the Western world. My immediate thoughts were that this was an isolated case based in Wuhan or China generally. I don’t think many would have anticipated or could have predicted that this would turn into a global pandemic when we first learned about the outbreak. In February, things started to gain clarity and change quite drastically.
As a leading construction and property development company in Cayman, how have you adapted to the significant and drastically negative effects of COVID-19 in Cayman?
Our first priority has been the health and safety of our employees. We implemented all the necessary and regulatory procedures like social distancing, frequent hand washing and hand sanitisation. Our offices and work environments were cleaned and disinfected regularly, and we were doing everything in our power to reduce the spread of the virus.
When the government first implemented the soft and hard curfews, our sites were initially open, and we remained fully operational. We implemented all the necessary and regulatory procedures like social distancing, frequent hand washing and hand sanitisation. Our offices and work environments were cleaned and disinfected regularly, and we were doing everything in our power to reduce the spread of the virus. Our HR Manager and our Health and Safety Officer collaborated on staff correspondence in terms of disseminating updates on protocols, procedures and tips on how to stay safe and healthy. On site “Tool Box” talks were given to all staff to ensure they were aware of these enhanced health and safety procedures and that they had the necessary ‘tools’ to help reduce the spread of the virus.
When the Cayman Islands government mandated the closure of all construction sites, our primary focus then shifted to operational planning and the development of strategies to ensure that we, as an organisation, can come out of this turbulent experience stronger. We have spent much of our “downtime” preparing budgets, reviewing contracts, analysing and securing our procurement processes and channels with particular attention on the effect this pandemic will have on our global supply chains and if/how it could ultimately affect our projects. The main priority for teams working at home is strategic planning for post-COVID-19 operations.
We are putting together extensive plans and procedures regarding how our construction sites will operate once reopened. And we developed a “day in a life” of a construction worker presentation that visually depicts and thoroughly outlines how employees will have to conduct themselves on and off the site to ensure optimal health and safety.
Additionally, our teams are all conducting virtual meetings with clients, vendors and colleagues in an effort to stay connected and continue with our day-to-day tasks and projects.
Have all of your construction projects come to a grinding halt?
The actual physical construction of our projects has ceased due to the Cayman Islands government-mandated site closures, yes. However, we are all still working on planning, scheduling, procurement and many more of the operational components of each project. The reset button was pressed, and the silver lining is we have worked diligently on the planning for each project.
NCB’s new boutique hotel
How are you maintaining staff morale?
This of course has been challenging as everyone’s situations vary. Home-schooling, particularly in an unplanned work/home balance, I would say has been the greatest challenge for most. I have personally been trying to stay connected with staff through calls, emails and meetings. As a company, we are making efforts to stay connected with all employees through our HR as well as our Health & Safety Officer. There has been no real end date in sight for the present work from home scenario, so without a light at the end of tunnel most people have their “days” where it all becomes too much. We will be rolling out more initiatives to keep staff engaged, maintain staff morale and keep our employees connected with one another even as the construction/development sector gets released.
How are you showing potential buyer’s properties?
As the majority of our business as developers is pre-construction, there aren’t any physical showings, so thankfully, this hasn’t impacted our ability to share information. We continue to receive sales inquiries on all of our projects and our Sales and Marketing Manager is sending them the pertinent information such as brochures, price and availability, floor plans, interior selections and so forth. Whilst we have certainly seen a decrease in the number of inquiries, the interest still exists and we are confident that the real estate market in the long-term, won’t be significantly impacted.
Our priority right now is to reassure our existing purchasers that we will be ready to go once we are allowed to open our sites back up and maintain their confidence in us as developers. The support from our clients has been tremendous and many of them recognise that there is tremendous value in working with credible developers that are committed to this island and its economic recovery. We maintain consistent communication with each and every purchaser and provide them with timely updates. It’s important to stay connected and let them know that their investment will be protected and they’re in good hands.
Are you in discussions with the banks regarding financing and the effects of COVID-19 on lending for your clients?
We have been in touch with our finance partners ensuring that our projects are well-positioned to be able to handle the effects of COVID-19 and sites being closed. Thankfully, we had acquired enough sales with each project we currently have on the go to meet the financing requirements of our lenders, so this has certainly made things a lot easier for us. We’ve assured the banks that as soon as the sites are allowed to open, we will be ready to go.
We are aware that banks are not processing any new mortgage applications right now as they are very busy processing their current lending commitments. Unfortunately, this makes it difficult for those purchasers that are wanting to buy now and apply for a mortgage.
Do you anticipate that property prices and commercial rents will fall over the next three to six months?
The rental market is definitely going to be affected by COVID-19 the most and this has been pretty immediate. We will likely see rental prices decrease in the coming months. Anytime you have a surge in unemployment and reduction in the country’s economy, GDP will drop, the demand decreases, and pricing moves to be favourable to the tenant as opposed to the landlord.
There were more work permit holders on the island than Caymanians. The significant job losses will result in people leaving the island, which is not good for the rental market. Many landlords have acted in accordance with the banks and reduced rates or created rental “holidays”. The ideal scenario is to maintain your tenant(s) and thus sacrifice on both sides; a “working together” approach increases the chances for long-term tenancy.
With borders closed, any short-term rental property is also affected; vacancies and pricing will reflect this throughout 2020.
Regarding the market valuation of properties, I do not foresee these decreasing in the long term with likely peaks and troughs over the short term with minimal demand. There will be some opportunities arising in the medium term and, as scales balance, there will be some properties that will have to attract quicker sales through price reductions. The current environment is showing sellers holding on pricing. Having said that, there will be some isolated cases where individual sellers may be more motivated to sell and will want to move their property quickly, so they might price it aggressively to sell. However, I don’t see a holistic drop in property prices across the market.
South Sound luxury residential development, AURA
What advice are you giving to commercial property owners as the majority of tenants are now working from home and some businesses cannot afford to pay rent?
This has to be looked at on a case by case basis and depends on the tenant, the strength of the tenant and the nature of their business. For example, retail businesses have been hit extremely hard, whereas financial services are still able to continue operating without much impact.
It’s essential for commercial property owners to communicate with their tenants, and tenants need not be afraid to bring the reality of their situation to their landlords’ attention; this allows for informed decisions to be made. Within our Group, we have had cases where we’ve waived rent to assist tenants and other cases where we’ve reduced rent to help businesses that are still operational but not in the same capacity. Ultimately, I am of the opinion that it is better to re-secure your tenants than to be seeking new tenants at this time. If both parties can work together and come to a favourable outcome, it is a better result.
Tenants can in return for rental assistance, re-confirm their commitment by extending lease terms or executing new rental agreements.
For overseas investors, Cayman will always be appealing, do you think COVID-19 will affect long-term investment in our beautiful island?
I think that ultimately, this will continue to position Cayman in a positive light with overseas investors. COVID-19 is a global pandemic, not a unique situation to Cayman and if anything, it has highlighted the attractiveness of Cayman as a jurisdiction. Its size and how decisive the government has been reacting to this crisis, the stability, and therefore ultimately safety which is what we’ve always tried to promote.
Cayman is one of the safest islands in the Caribbean, and this message has been reinforced in this scenario. Cayman will continue to be an attractive country for those looking to relocate to or invest in. I believe “brand Cayman” will be stronger than ever.
If you had a crystal ball, how do you foresee the next three to six months with regards to the NCB Group?
In the very short term, none of us knows how long the current situation will play out for. There is no history of this or anything to base our predictions on as to how the world will come out of this. The government of the Cayman Islands has acted aggressively and proactively, and they have made the right decisions for the health and safety of Cayman’s people. The time is now right to get back to work. This needs to be done sensibly and with a new normal regardless of the industry you are in, but domestic Cayman has to re-open in the very short term and much thought needs to be put in place as to how our borders re-open.
I think for NCB, this experience has reinforced that the communities and developments that we build are what people are looking for, now more than ever. The impact of isolation has made people aware of how valuable and important it is to live in a community, where you can still enjoy the amenities and still have neighbours that you can count on if needed or connect with while practicing social distancing.
We see this every night in two of our developments – Cypress Pointe North and SOLARA where residents gather in their back yards and on their rooftop terraces to pay tribute to our front-line and essential workers at 7pm. Following this they engage in 30-45 minutes of music where songs are played across alternative canals; everyone sings and dances together to the music. This grew organically out of the need for people to still feel connected in this very trying time of disconnection. It’s the reason we do what we do and build how we build. People are now seeing the benefits in things like home and community gardens, which OLEA will feature. Bike paths and proximity to grocery stores and green spaces are now valued more than ever. These are all components of a new urbanist community, which one of our latest projects, OLEA, is modelled after. I truly believe that after this experience, the value of community will be more precious and influential than ever in terms of purchasing decisions.
In terms of NCB Group as a company, our priority right now is the health and welfare of our employees so we’re doing everything we can for our staff. We are collaborating to develop strategic plans so that NCB comes out of this stronger, more adaptable and definitely more resilient.
Over the next few weeks, the construction sites will be open with new operational protocols. This will give us the opportunity to implement the plans that we’ve been working on during this time of lockdown. The next year is going to be very different and how we have conducted ourselves will change as a result of this virus, but we are eager to get back to the site and are determined to rise to the challenge to do our part to make Cayman 2.0 a better version.
Host, Stuart Wright is joined by IRG’s Jeremy Hurst and James O’Brien, along with special guest panelist Matthew Wight, Managing Director of Cayman’s NCB Group, to discuss the state of the Cayman’s real estate market as the islands recover from the Covid lockdown.
As many as 50 major construction projects are ready to resume as soon as government gives the green light, according to some of Cayman’s major developers.
Government has earmarked the reopening of the sector – potentially as early as this month – as a means to stimulate the domestic economy.
Several developers told the Cayman Compass their funding remains in place and they are confident that hotel and luxury condo projects that broke ground before the COVID-19 crisis can be completed.
They also believe that Cayman’s economy will bounce back in the longer term and that demand for hotel rooms and apartments will return.
Building sites have been closed since March, when government shut down all but essential business in an effort to contain the spread of the coronavirus.
Some of the projects stopped in their tracks include NCB Group’s boutique hotel opposite Kirk Market, Dart’s new office and residential buildings at Camana Bay, the luxury beachfront development WaterMark, and the third phase of the Vela condo development on South Sound Road.
The resumption of all major projects would put an estimated 4,000 people back to work and create a spin-off benefit that could pump millions of dollars back into the islands’ ailing economy, developers claim.
Safety a priority when sites reopen
A working group of developers has been formed to liaise with government and public health officials on the safest way to reopen building sites.
The process is likely to involve mandatory wearing of masks, social distancing and regular temperature checks for workers, according to Paul Pearson, a member of the group.
Pearson, director of Davenport Development, said the guidance of Chief Medical Officer Dr. John Lee and his team on how to run sites would influence the first phase of reopening.
“Our first priority is to the safety of our workers and the Caymanian community,” he said. “There will be and should be a lot of enhanced safety rules for all the sites, no matter what the size.
Matthew Wight, of NCB Group, said business would resume carefully. He said it was encouraging that there were now very few new cases of COVID-19 being reported in daily government briefings.
But he said the industry was taking extra precautions to ensure there was not a new explosion of the virus as business resumes.
The environment is going to be very different when we reopen. The industry is going to take the lead on how to cope with COVID-19 and ensure our sites are safe working environments.
Driving the economy
With the borders closed and little prospect of tourists returning before the end of the year, Premier Alden McLaughlin has indicated that construction and development will be central to Cayman’s economic survival.
Pearson said there was a huge responsibility for the industry to lead the economic recovery for the Cayman Islands and demonstrate new ways to work safely in the post-COVID-19 era.
He said his company alone expects to employ close to 400 people on three projects.
Between the larger developments across the island, he expects more than 4,000 people would be put to work over the next 18 months.
That figure does not include services from building suppliers, surveyors, sales agents and others who make a living from the construction industry.
The overall economic impact for the country could run to tens of millions of dollars per month, he believes.
Wight estimates there are around 50 major projects ready to go across the island.
NCB itself has eight projects, ranging from Kailani – an 80-room boutique hotel that will be part of the Curio Collection by Hilton brand – to the OLEA residential development at Camana Bay.
Though there have been temporary job losses in the industry, he does not believe there will be too many long-term redundancies.
Wight said most developers had furloughed staff during the shutdown, with a view to bringing them back, once sites reopen. NCB expects to recall all its staff within the next few months.
‘This too shall pass’
Wight expects most developers will also have enacted force majeure clauses with their financiers – which allow for an extension of time to complete projects in the event of a natural disaster.
He said this would mean that the majority of projects could be completed on a revised schedule, with the original financing arrangements intact.
He acknowledged the global economic situation could impact sales, but he believes Cayman will rebound in the long term.
Dale Crighton, director of Crighton Properties, said the company was mid construction on luxury waterfront development Fin when the shelter-in-place order came into effect.
Though the tourism industry and, by extension, the luxury property market, is currently in free fall, Crighton takes an optimistic view of the situation.
He expects a short-term contraction in the industry but believes demand will have returned by the time many of the projects currently underway are completed.
“Customers are still calling and deals are still closing,” he said.
There are currently enough projects in the works to keep our construction industry busy for the next 24 months – more than enough time for travel and all of the other aspects that affect our economy to regularise. Just like after Hurricane Ivan, this too shall pass.
Cayman’s largest developer, Dart Enterprises, has also indicated it believes construction can be an economic catalyst for the country.
The expansion of the Cayman International School and new commercial and office space at Camana Bay are currently under way. Meanwhile, Dart Enterprises CEO Mark VanDevelde has said the company is “exploring new opportunities that can further drive economic activity”.
That could include the renovation of the Comfort Suites hotel, with the company indicating it will use the extended tourism closure to redesign the venue with a view to reopening with a new look and new management in 2021.
Cypress Pointe North in Crystal Harbour sells out soon after NCB announces its second phase. One of the most energy efficient communities in the Caribbean, all homes are powered by solar panels, cooled by geothermal technology and constructed with some of the most sustainable building methods and materials on the market.
