The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamians are conceding an ever-larger share of the real estate market to foreign buyers, one well-known developer yesterday revealing that 100 per cent and 90 per cent of purchasers at his latest two projects were from overseas.

Jason Kinsale, principal of Aristo Development, the ONE Cable Beach developer, said the trend highlighted the “different motivations for purchasing” among Bahamian and foreign buyers.

With the latest developments surrounding the $3.5 billion Baha Mar project further unnerving Bahamians and adding to the general economic uncertainty, many are shying away from real estate purchases.

Mr Kinsale, though, said this was not the case with foreign buyers, who are driven by strategic reasons such as tax and estate planning.

With 28 of ONE Cable Beach’s 69 units already sold prior to the recent construction start, he revealed: “We’re 100 per cent foreign buyers. A lot of them have based their decision to purchase on the requirements for permanent residency.

“The Bahamian market has really been affected. It’s unfortunate. I believe the foreigners see value, and make their decisions to purchase, but Bahamians are waiting to see what happens with Baha Mar.

“We’re seeing the same thing at Balmoral,” Mr Kinsale said of his other, Sandford Drive-based, development. “We’re probably 90 per cent foreign now.

“Foreign investors are looking at the 50 per cent income tax savings, and are not so concerned about Baha Mar and what’s going on in the local economy. They have different motivations for purchasing

“Of course, Bahamians think more foreigners are buying their land. But Bahamians can buy, too. I want to see as many Bahamian buyers as possible.”

With $500,000 set as the threshold for permanent residency based on property purchases, Mr Kinsale said European and Canadian buyers were viewing the Bahamas as a key location for tax minimisation and estate planning purposes.

As a result, they were less likely to be put off by Baha Mar’s woes, even though the mega resort property is located just up the street from the $40 million ONE Cable Beach.

“Obviously, I was very concerned,” Mr Kinsale told Tribune Business of Baha Mar’s Chapter 11 filing. “You don’t really have a true assessment of the market until you’ve spoken to the clients and got their feedback on the situation.

“Fortunately, this was not a global issue, as I had experience of the fall-out in 2008 with Balmoral.”

With his international buyers viewing Baha Mar as a local, Bahamian problem, he added: “They all feel the opening is imminent, although they’re not sure when. They know it will open eventually.

“There’s only one project going up on Cable Beach right now, so there’s not a lot of competition.”

While it broke ground three weeks ago, Mr Kinsale said ONE Cable Beach would have its formal opening ceremony in two weeks’ time.

“Mosko has been mobilised. They’re on site now. We’ve moving forward, and the trucks are moving,” he told Tribune Business.

“The one thing I tell people as well: This is a smaller project than Balmoral. That was 300 units over 43 acres. This is 69 units over 3.2 acres, so it’s a much more manageable, comfortable build-out, a smaller, much more manageable site. It’s a much easier undertaking.”

As for his $3,5 billion neighbour, Mr Kinsale added: “I think we’re all confident in Baha Mar’s ability to move forward eventually. They’ll get through it.

“There’s really no choice in the matter. They just have to get it done. There’s too much at stake.”