St Kitts & Nevis

St. Kitts and Nevis maintained strong property sales

St. Kitts and Nevis is an emerging luxury property market according to Global Property Guide. The Caribbean property market is different to other parts of the world as investors tend to buy a resort property only to use for brief vacation stay. Hence, for most of the year, the property is managed and rented by the resort. The benefits are twofold, where on one hand, the investors enjoy a few days of sun, sea and sand and on the other hand they earn income from the resort rental for the rest of the year. The relative ease of access to financing during the pre-recession era spurred a boom in the construction of mix-use developments, i.e. villas and condominiums across the region. However, this boom was curtailed as developers succumbed to the credit crunch and overleveraged properties plunged into distress.

Nonetheless, despite the slowdown in the construction of luxury property projects in the region during the height of the global financial crisis, the property market in St. Kitts and Nevis continued to grow, thanks for the most part to the government’s Citizenship by Investment Programme.  The Government of St. Kitts and Nevis has an ‘economic citizenship’ programme attracting wealthy foreigners who make a substantial contribution to the development of the country. Investors along with any family members can directly qualify for citizenship through investment, either by making a donation to the Sugar Industry Diversification Foundation (SIDF) or investment in an approved real estate purchase. Foreigners who invest at least US$400,000 plus the payment of registration and other fees can qualify for St. Kitts and Nevis Citizenship after a complete due diligence is carried out. The total investment amount comes around US$492,000 for a single applicant, and additional fees for accompanying family members.

St. Kitts and Nevis is still relatively unspoiled with excellent beaches and attractive landscape of green sloping mountain sides and cultivated fields. Property prices in St. Kitts and Nevis are less expensive than most Caribbean Islands, although there has been some upward movement for the past decade according to Global Property Guide. Demand for property has been robust in St. Kitts and Nevis, with over US$350 million dollars in very large private sector hotel and residences projects in the pipeline for 2012 alone, which can significantly enhance growth prospects in the luxury property market well into the future. Since the majority of these projects are well capitalized they are expected to be completed on schedule as the progress of construction will not likely depend on the sale of luxury units.

Another factor contributing to the rapid pace in real estate development is the increased number of flights into the country. St. Kitts and Nevis was ranked 4th on British Airways’ Top 10 Holiday Destinations for 2011. In addition, St. Kitts and Nevis receives daily non-stop service from Miami and twice weekly flights from New York on Sundays and Wednesdays via American Airlines, US Airways weekly non-stop from Philadelphia and Charlotte, North Carolina with connections to and from major United States gateway cities. Delta Airlines also offers weekly non-stop flights on Saturdays out of Atlanta, while Air Canada has a scheduled weekly flight on Fridays during the months of December to April. St. Kitts and Nevis also receives regularly schedule flights via Puerto Rico, St. Maarten and Antigua.

The Government of St. Kitts and Nevis has succeeded in creating an attractive investment climate through legislative reform, sound policies and careful planning. Since the closer of its 350 year old sugar industry in 2005, St. Kitts and Nevis moved to position itself as a major player in the world of Foreign Direct Investment (FDI) with the launch of the St. Kitts Investment Promotion Agency (SKIPA). The Agency was born out of the need to revolutionize the way businesses get established in St. Kitts. The launch of SKIPA has no doubt given the island’s competitive performance a major boost by facilitating the business establishment process for investors, while continually advocating for structural reform to create an investment friendly business climate. A new landscape of opportunities is now available to investors under defined prioritized sectors. These include tourism, financial services, information technology, agriculture, international education, renewable energy and manufacturing.

To investors, St. Kitts and Nevis offers a wide range of new investment opportunities. Since the closure of the sugar industry, a vast quantity of land is now available for real estate development. Take for example; the Government has set aside over 6,000 acres of land in the White Gate Development area. Already home to Kittitian Hill Resort, Beaumont Park Horse Race Track and Beaumont Country Estates, the White Gate area is considered as one of the last frontiers for development on the island of St. Kitts. The area is well-placed for development in tourism, luxury residences, and much more. The White Gate area is well endowed with numerous relics and ruins of the plantation era, which now forms the character of this part of the island of St. Kitts. The development plan also calls for the construction of a sugar museum, several public parks and open spaces.

While the global property market was hit hard by the worldwide economic downturn, in St. Kitts and Nevis, a number of very large hotel and residences projects are in the pipeline and could significantly enhance growth prospects in the short term (12-24 months) and beyond. Work on Kittitian Hill Resort, which broke ground in 2011, is progressing smoothly and will offer a contemporary Caribbean architecture with charming cottages, elegant villas, bars, shops and a championship golf course when completed. In addition, construction is expected to commence shortly on both an 84 rooms hotel and residences project and a 324 room resort and residences project, both in the upscale Frigate Bay area. Add to this, is the recent announcement of an arrangement between Hyatt Hotels Group and Dubai based Range Developments for a Park Hyatt Hotel to be constructed on St. Kitts’ South Eastern Peninsula. The Park Hyatt St. Kitts will feature 200 guest rooms and 50 Park Hyatt branded residential condominiums along with restaurants, a fitness center, a spa, and more than 7,000 square feet of meeting space.

St. Kitts and Nevis obscurity in the global property market is rapidly changing. To those who have discovered this gem in the Caribbean, it is untouched, affordable and now accessible. Still relatively unspoiled and more affordable than most of its Caribbean neighbors - developers are taking advantage of the increased interest in St. Kitts and Nevis. Add to this, one of the most respected Citizenship by Investment Programme in the world, St. Kitts and Nevis is fast becoming the latest “must have” vacation home destination.

By:

Stanley Jacobs

Director of Investment Promotion

St. Kitts Investment Promotion Agency