Developers have scrapped several
plans for major resort developments on Grand Cayman, while others have been put
on hold due to an inability to generate pre-sales and lack of interest in the
destination on the part of investors, according to two real estate experts.
Kim Lund of Re/max and J.C. Calhoun
of Coldwell Banker said the abandonment of the projects was evidence the
recession is the worst the real estate industry has seen in the Cayman Islands.
“The Residences at Beach Bay, a
multimillion dollar development that was scheduled to go ahead in the Bodden
Town area has had to be cancelled,” said Mr. Lund. “As a result, deposits have
been returned and the owner of the land has decided to sell the land to a New
York firm, who still want to proceed with a development/project in the area,
though it will likely be different the was planned for the Residences at Beach
Bay.”
Regarding the status of the
proposed Mandarin Oriental, a high-end resort that was set to be constructed on
Barefoot Beach along the Queen’s Highway in East End, Mr. Calhoun said he had
only recently learned that the development is not going ahead and the land is
being sold.
“That project was a question mark
for a long time, but the developers had to amp things up and put on a positive
face to try to generate at least some interest, otherwise it would have been a
self fulfilling prophecy,” said Mr. Calhoun, adding that the economic downturn
was “the nail in the coffin” for the project.
The 19 acres of land on which the
Mandarin Oriental was to be built is now for sale on the Cayman Islands Real
Estate Brokers Association’s web site for $21,750,000.
Mr. Lund said another development
that has been recently scrapped is the Montclaire, a 25-unit condominium
project that was slated for Seven Mile Beach near George Town Villas, but was
“cancelled because of no pre-sales and a general lack of interest that is
impacting the market. The land is currently for sale.”
He said these kinds of occurrences
are becoming all too common in the real estate market as of late, adding that a
similar fate had met the Spanish Reef Resort in West Bay, which was sold to
investors who planned to knock it down and build a new resort, but have decided
not to go ahead at the moment.
The Island Resort and Residences
scheduled to go ahead in East End has also been delayed for a lengthy time. Mr.
Lund explained that the developer for that project had to seek new financing
for the $150 million development.
“As far as I know, I think he has
got that secured now and things are going to get started again soon,
hopefully,”
Mr, Lund said a lack of pre-sales
was also the reason for construction on the Rum Point Club, next to the Retreat
in North Side, not yet beginning, as well as the scrapping of plans for Ivory
Sands, a 60-unit condo development that was planned to be built on 8.3 acres of
land in Cayman Kai.
The Cayman Islands Government’s
plans to encourage resort development in the Eastern Districts - the so-called
‘Go East Initiative’ - appears to have failed, a least for now. Mr. Calhoun blamed the recession.
“East End was thought to be the
next big tourist segment of Grand Cayman, but that can’t happen in these
current conditions,” said Mr. Calhoun, who believes the only way things will
get better in Cayman is if they get better in the United States.
Both Mr. Calhoun and Mr. Lund
agreed that successive governments in the Cayman Islands had neglected the
European market and as a result we were paying the price.
Mr. Lund said the factors
contributing to what he deemed as Cayman’s worse real estate lull included the
need for a longer airport runway, which would facilitate travel from Europe and
the Middle East, and development of infrastructure.
“If we are not expanding or growing
our product in all areas of the Caymanian experience and continue to ignore the
solutions, no one will be interested and this two-year recession will continue,”
he said.