WHY INVEST IN THE CARIBBEAN

The Caribbean

"The Caribbean doesn't need to be expensive. GEM Estates has uncovered two Caribbean destinations that don’t break the bank"

The Caribbean, thanks to a perfect combination of sun, sand, scenery and soft-hearted people, has a timeless appeal and is the granddaddy of holiday destinations. The group of 7,000 islands, islets, reefs and cayes in the middle of the Americas is the embodiment of paradise with white powdery beaches, luminous turquoise seas, colourful coral reefs, luxuriant vegetation and bright floral blooms.

Due to its popularity with celebrities, film stars, the well-heeled and the cruise-ship fraternity who yo-yo between boat and onshore duty free shopping, the Caribbean does however generally come with a high price tag. Hotels such as Sandy Lane on the more established island of Barbados charge a minimum of 900 US dollars a night for a standard room rising well into the thousands. Only heavy wallets need apply.

GEM Estates has however uncovered two Caribbean destinations that don’t break the bank – the Turks & Caicos and Isla Margarita. Both currently make only weak appearances on second home and holidaymaker radars but are tipped for immense future success, and as they’re at the beginning of the boom cycle – they’re affordable.

The Turks & Caicos Islands are located just south of the Bahamas and comprise 40 islands, only eight of which are inhabited by a total of just 32,000 people. The Islands share 530 miles of pristine beaches between them and the third largest coral reef system in the world. Allegedly Christopher Columbus discovered the Turks and Caicos in 1492, which makes them one of the oldest-known island groups, and currently they enjoy the status of a self-governing British Crown Colony.

Isla Margarita 40km off the north eastern coastline of Venezuela, is part of the Venezuelan state of Nueva Esparta, which also comprises the Islands of Coche and Cubagua. Also discovered by Christopher Columbus in 1498, Isla Margarita has a growing population of 420,000 and basks in the comfort of being part of a rich oilproducing nation.

WHY INVEST IN THE CARIBBEAN

CLIMATE ****

The Turks & Caicos, despite a Caribbean address, have very little of the rain and humidity associated with Caribbean
living. They do indeed have all of the sunshine though, sitting in the high 20s ºC every day, almost without fail, and very warm seas. A star is knocked off as the Islands can feel the effects during hurricane season (June to October). Although not hit directly, the Turks & Caicos can be brushed by the outer bands of storms bringing windy wet weather. Isla Margarita also has average temperatures in the high 20s ºC throughout the year. This Island is blessedly completely outside out of the hurricane belt.

ACCESSIBILITY ****

The Caribbean will always be longhaul and therefore a more timeconsuming, expensive place to visit for Europeans. The Turks & Caicos are five hours behind GMT and Isla Margarita four hours behind, so a bit of bodily adjustment is also needed to settle in. Despite these minor negatives, a four star rating is still applicable as access from the Americas to both Islands is much more convenient, thus opening up rental potential to a vast ‘local’ market of millions. To get to the Turks & Caicos from London look to American Airlines, Delta Airlines and British Airways amongst others, a ten and a half hour flight. From London calculate approximately nine hours to travel to Isla Margarita with British Airways or First Choice.

ECONOMY ****

The economy of the Turks & Caicos is based largely on tourism, fishing and offshore financial services. The Islands export fish, particularly lobster, and conch to the United States and the United Kingdom. Latest figures for GDP show a real growth rate of 4.9% and GDP per capita at 12,500 US dollars. The growth of tourism is going to be important for the future of the Islands. Isla Margarita, as part of Venezuela, shares the wealth of an oil producing nation and efforts are being made to develop heavy industry and revive agriculture. Since the invasion of Iraq, oil prices have increased, strengthening Venezuela’s economy further. Tourism is also of great importance, especially for Isla Margarita, and the government is focusing more attention on this area.

TOURISM *****

The Turks & Caicos government is clearly targeting the high-end tourist market. The 2006 Condé Nast Traveller Gold List featured both Parrot Cay (off Provo) and Point Grace (on Provo) and the Ritz-Carlton has also arrived on West Caicos. A brand new international airport is well under construction on South Caicos which will boost visitor numbers to that Island and the 50 million US dollar Grand Turk Cruise Centre opened in February 2006. Tourist arrivals to the Islands rose from 87,000 in 1996 to 200,000 in 2006, more than half of which were from the United States. Isla Margarita is one to watch, especially with the construction of a 350 million US dollar Formula One Circuit. Domestic tourism is very important for Isla Margarita and Venezuelans pack the duty-free Island during Christmas, Easter and the height of summer for shopping sprees. The beaches, windsurfing, sailing, perfect scuba diving conditions and two 18- hole golf courses attracted 1.5 million tourists in 2005 and an estimated 2 million in 2006. A deserved five stars.

PROPERTY MARKET *****

Both the Turks & Caicos Islands and Isla Margarita are off-shore havens for the over-taxed. They have no corporate income tax, no personal income tax, no estate or inheritance tax and no annual real estate tax, plus duty free shopping. This carries enormous appeal for foreign investors. Official Turks & Caicos Government figures state that the Islands have enjoyed between 10 and 20% capital appreciation per annum over the past ten years, with no sign of abating. Although GEM Estates has product for a couple of hundred thousand dollars, prices at West Caicos Reserve, scheduled for completion in 2008, start at a cool two million US dollars rising to the eight million dollar plus mark - a strong indicator of the investment potential locked into the area. Prices in Isla Margarita start from 65,000 US dollars although not for long. Capital growth was pitched at 35% in 2005 and rental figures doubled for the same period. With a strong domestic demand for holiday rentals and a very low cost of living, the future is bright for property investment. Five stars.