Market News


Massive Development Projects Underway - Oct 2013

Publish Date : 02 Oct 2013

MASSIVE DEVELOPMENT ACTIVITY NOW UNDERWAY – It is really quite impressive, when you look at the current level of development that is underway, compared to how slow it was, over the prior four to five years.  Almost all of it ramped up in the last year, now that the economy is improving and demand is increasing.

This will make it much more desirable to not only visit here, but also to live here.  Demand will increase from both a tourism and relocation standpoint.  And we are seeing that it has started already.  Our resident population increased by 2.2%, last year and tourism by 4.1%.  Momentum is shifting back into a much more positive economic direction.

Currently, the following developments have begun site preparation or construction:

1)    REDEVELOPMENT OF MARRIOTT COURTYARD HOTEL SITE – The Marriott has been knocked down and a new 10 storey hotel and 10 storey building of residences are being developed by the Dart Group on the site.  It has been announced that the hotel will be a Kimpton brand and construction has started.

The Kimpton Hotel and Restaurant Group Inc. is an American hotel and restaurant company.  Founded in 1981 by William Kimpton in San Francisco, it is the largest chain of boutique hotels in the United States.  All their properties are located in the USA, until now.  They presently have approximately 60 hotels in 25 cities.

Plans are to have 263 rooms/suites, 56 residences, and 6 one storey beach bungalows on Seven Mile Beach.  There will be 5 restaurants and bars, beach front pool, spa, shops, and meeting rooms. The cost of construction is estimated to be approximately US$200 million with completion expected to be in 2016.

The boom to tourism arrivals from this hotel will be substantial.  Currently, our stay over tourism (not cruise ship excursionists) is just over 300,000 per year.  The Kimpton hotel could increase that by 135,000 per year, after they have been open for a couple years and are running at 70% occupancy, not counting any additional occupancy from the residences.

That is over a 40% increase to our current total number of tourists for 2012.  It will represent an enormous increase in demand within our local market for such commodities as real estate and entertainment services and products. 

Because this is Kimpton’s first property outside of the USA, it should attract a great deal of attention and high occupancy.  There is little doubt that this will be a magnificent property, as anyone who knows the developments of Dart in Grand Cayman, can attest to their high quality and attention to detail. 

2)    REDEVELOPMENT OF PREVIOUS HYATT REGENCY SITE – The buildings have been stripped down to their concrete structure and once the developer has approval from government, they are prepared to proceed.  They were in a standstill for several months, prior to the election, until a new government was elected.

Plans are to develop a 4 star business tourism hotel with approximately 170 suites and several new facilities and amenities like a convention center, spa, swimming pool, restaurant and bar, marina, and some residences.  While most of the existing buildings can be redeveloped, there are plans for some new buildings, as well.  Plans are also being considered to completely recondition the golf course into a pristine condition.

At this stage, the intention is to brand the hotel with a well known international and more business oriented hotel brand and management.  Additionally, the Grand Cayman Beach Suites across West Bay Road on Seven Mile Beach may also undergo some further improvements to elevate it to a 5 star level.

The new hotel has the potential to increase our tourism by about 86,000 visitors, after being opened for a couple years, based on 70% occupancy.  That is about a 27% increase to our overall tourism total for last year. 

Along with the Kimpton Hotel, these two properties have the potential of adding approximately 200,000 more air arrivals.  This is the equivalent of increasing our current tourism by two thirds within the next 3 to 4 years.  That will have a massive impact to the demand level for local services and products and will be a boom to our economy.

3)    NEW ROADS AND PUBLIC BEACH – The Dart Group has been working with the Cayman Islands Government on public infrastructure projects and just opened a new bypass road from West Bay to connect with the Esterley Tibbetts Highway into George Town.  Traffic along West Bay Road has been significantly reduced where the first section of the new road was open, so this additional section should further help traffic flow from West Bay to George Town.

Additionally, they are expanding the public beach by approximately three times its size and upgrading and enhancing the area with landscaping and new facilities.  The improvements of having the new road access, as well as vastly increasing the size and facilities at the public beach are valuable infrastructural upgrades to this country.  It will make traveling and going to the public beach more pleasant for residents and tourists alike.

4)    NEW INTERNATIONAL HEALTH CITY – It took about 3 years to get from a signed agreement to the physical construction, but once construction was underway, they certainly wasted no time in building the facility.  Four buildings are already constructed and sealed in, so interior work can now be done on the 140 bed hospital and ancillary facilities, which are located in High Rock near East End.

At this pace of progress, the first phase of the project would be completed by February 2014 and ideally open within another month.  Eventually, over a 15 year period of time, $2 billion will be invested and the hospital will be expanded up to a 2,000 bed facility. 

Over the next ten years, four phases are planned.  These will take the health city from a 140 bed hospital with about a 150 room hotel and 90 residences to a 1,000 bed hospital with 500,000 square feet of commercial and retail space and 500 residences by 2023.  Plans are for the hospital to go green, from a landscaping perspective and sustainable energy standpoint.

Right from the start, the hospital will have a substantial impact on tourism.  Medical tourism is increasing worldwide and over the long term, this tourism has the potential to double the current level of stay over tourism in Grand Cayman, which will lead to other infrastructure needs, most notably a new, larger airport and new road to East End to service the demand that the hospital will create.

Projections are for an increase in air arrivals of approximately 60 patients per day by the end of 2014, 350 patients per day by 2017, and 1400 patients per day by 2027.  These are astounding numbers and will be doubled, when additional visitors accompanying patients are included.  This is hard to fathom, but we cannot ignore the effect this will have on the Cayman Islands.

5)    WATERCOLOURS – This US$200 million, extraordinary beachfront development of residences will be completing in early 2014.  It will be “the address” on Seven Mile Beach and provide a much higher level of lifestyle for the owners of private condominium residences along the beach.  The 60 residences that comprise WaterColours have already had a strong economic impact through the construction phase in what was a difficult recessionary market.  However, the development will add even more to that positive impact, as the residences are occupied and the owners stimulate the local economy through their purchases of products and services from local businesses.

6)    CAYMAN ENTERPRISE CITY – Over the past few years, new businesses have started relocating to Grand Cayman, to be part of a commercial concept that is new for this country.  Cayman Enterprise City (CEC) is a knowledge-based and technology focused Special Economic Zone located in Cayman’s tax-neutral environment.

CEC is structured so that new businesses can quickly and cost-effectively set up an offshore Cayman company.  Each business will have a genuine offshore physical presence to generate active business income from their Cayman Islands location, as part of their global tax mitigation structuring.

Special Economic Zones, like Grand Cayman’s CEC, have been established in locations throughout the world, in places like China, India, Dubai, Panama, etc.  CEC enables businesses to take advantage of Cayman’s jurisdictional and tax benefits along with a series of appealing concessions granted by the Cayman Islands Government, whilst operating from an OECD and World Bank compliant Special Economic Zone. Businesses in Cayman’s CEC are able to produce their products at more globally competitive prices.

While to date, the businesses that are part of CEC have been located in a few select established developments that had some office space vacancies, like the HSBC building and now the Flagship Building downtown.  As this enterprise increases in size, the plan is for them to build their own development to house these businesses. 

The benefit for the local economy is from the purchases/rentals of real estate and the various goods and services that these business owners and staff will buy for themselves and their businesses, while living here.

7)    CAMANA BAY BUILDING – A new four storey building is being built at Camana Bay, adjacent to the Esterley Tibbetts Highway and will be at 18 Forum Lane.  This will be an 85,000 square foot commercial building comprised of retail on the ground floor and another three levels of offices.  It will be their fourth office building, other than the two storey commercial buildings around the town center.

Considering that the office buildings at Camana Bay currently enjoy a 90% occupancy rate, they have pretty much cornered the market on Class A office space in Grand Cayman, with few exceptions.  Camana Bay has continued to grow and with this new building, their economic impact and job creation is also continuing to have a strong positive effect on the local economy.

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