As published in Cayman Compass JULY 2, 2014
by James Bovell
Market Holds firm in Cayman
While the marketplace may have slowed down in recent weeks as we hit the traditionally quieter summer season, there is still good, solid activity within Cayman’s real estate industry, both within the residential and commercial sectors, including the recent sale of the old Coutts Bank building and the land adjacent to it within the Seven Mile Beach corridor.
Heightened activity for this time of the year is no doubt in part due to some fantastic new products that are coming online this year which will greatly enhance the top tier of Cayman’s luxury property market. Look for my article next month for some overall market sales numbers, once all the CIREBA sales numbers are closed off for June, but just taking a quick cut of the numbers show sales of condos along Seven Mile Beach up approximately 60 percent for the first six months of 2014 compared to the same period last year (excluding any sales of developments not yet completed).
Among the stars in Seven Mile Beach’s crown is The WaterColours residences, which will be receiving its certificate of occupancy on July 8. This is truly a milestone for Cayman’s luxury property market and a really exciting event for me personally, having been part of this fantastic project from the ground up. Seeing WaterColours owners for the first time collect the keys to their apartments will be an important achievement for everyone who made this incredibly special project happen. At present, there are around 20 units still available for purchase.
The rise of Dart’s Kimpton hotel continues at a steady pace. This luxurious, boutique-style resort will also be offering some select properties for ownership. These properties will be available for ownership toward the end of this year, and I anticipate a steady surge in real estate ownership in the years that follow the emergence of this new brand within the Cayman Islands economy, a phenomenon that takes place each time a new brand is introduced to a market.
In addition, Dart’s construction of 101 new residences will begin this year just north of Cayman International School, creating another exciting ownership possibility for would-be buyers in the Cayman Islands. All of this positivity means a buoyant property market even during the summer months.
The rise of canal-front properties
This month I would like to take the opportunity to look at a particular stretch of real estate, that of the canal-front homes currently under construction along the Seven Mile Beach corridor, stretching up to West Bay, primarily the land south of the Ritz-Carlton, Grand Cayman, the land to the north of the Yacht Club and land at Camana Bay. Safe Haven is another such area but properties there are subject to leasehold, an issue that we will discuss in future articles.
There has been considerable activity of late in the construction of homes along the canals that dissect the Seven Mile corridor reaching out to the North Sound. Canal-front homes are prized for their incredible views and home owners pay a premium for such amenities. As a rough indicator, if we look at parcels of residential canal-front land sold along the Seven Mile corridor, 11 lots were sold (as registered with CIREBA) in 2013, while there have already been 10 lots sold in just the first six months of 2014. These numbers do not include land sold by developers and privately.
I believe that the natural cycle of needing to move on will take place in a few years once those who have built their homes decide to eventually move to other properties, and Cayman will then see a marked increase in the value of its canal-front properties as land becomes increasingly scarce on which to build a highly prized canal-front home. Then it won’t be about the replacement costs of a canal-front home, it will just be about which property has the best views. It will be interesting to see how appetite for canal-front homes increases as the supply slows down in the years ahead.