In St. Kitts, investors bet on high end tourism, reports News America
|Val Kempadoo with visiting journalits during the recetly held CTO State of the Industry meeting in St. Kitts|
BASSETERRE, ST. KITTS, OCTOBER 22ND 2012 (CUOPM) – St. Kitts has been shifting its tourism product to the higher end of the market in recent years and admits that “a lot of real estate sales on the island are being driven by the Citizenship by Investment Programme.”
The Citizenship-by-Investment Program was established in 1984, making it the longest established programme of its kind in the world.
Minister of Tourism and International Transport, Sen. The Hon. Richard Skerritt in an interview with Felicia Persaud of News America said the programme has distinguished itself from similar ones by rigidly enforced investment requirements and meticulous due diligence procedures.
“Once you apply after meeting the qualification of an investment of $400,000, there is tremendous due diligence and background checks done before an investor is allowed to hold a St. Kitts passport,” said Skerritt.
Set on the stunning hillside of Mount Liamuiga in St. Paul, St. Kitts, Kittitian Hill has buyers dropping a minimum of US$500,000 for ownership of mini-villas or cottages that are now being built.
Kittitian Hill’s Val Kempadoo said about 60 percent of the 90 one-bedroom cottages and 69 three and four bedroom luxury villas under Phase 1 of the project, are already bought, mostly by Chinese investors.
It is a place that will be close to nature where guests will zip around in electric cars only, dine on foods harvested from the area, including off the Ian Woosnam-designed 18-hole championship golf course, and feel completely guilt free about leaving any major carbon footprint.
Kittitian Hill is estimated to cost $400 million but so far over $50 has been spent in the first phase with added value to investors being the ability to qualify for citizenship of St. Kitts under the island’s citizenship plan.
|Christophe Harbour Bungalow|
At Christophe Harbour, Kiawah Partners, of South Carolina, are already offering up high end real estate at the 2,500 acre Sandy Bank Bay on the southeastern peninsula of St. Kitts.
The article reports so far only five new waterfront home sites are available but each cost a whopping US$985,000 to $1.35 million, at what is called Harbourside. To date, they are completely sold out, and because of the demand, several homes are in design review with construction expected to begin later this year.
The investment so far has been in the region of US$125 million, including in buying the land, infrastructure development and building of the villas and two restaurants. But the best part is yet to come, with Kiawah investing in a 100 yacht slip marina that they hope will attract yacht owners from nearby islands like St. Barts.
Christophe Harbour is not alone. Slated to open in 2015, is the Park Hyatt St. Kitts. It is another high end development that will be located on the southeast peninsula of St. Kitts, also in Christophe Harbour.
Park Hyatt St. Kitts is a US$150 million investment that will feature 200 guestrooms and 50 Park Hyatt-branded residential condominiums. The hotel will be constructed in two phases by the Dubai-based Range Development.
“Park Hyatt St. Kitts will continue our company’s tradition of delivering an unprecedented level of luxury and unrivalled hospitality experience,” said Pat McCudden, senior vice president of real estate and development, Hyatt Hotels & Resorts recently.
“Park Hyatt St. Kitts will be designed to provide an intimate, contemporary resort environment, with touches of the local culture – a perfect sanctuary for our discerning guests.”
In Frigate Bay, Ocean’s Edge, a US $75 joint venture project between the US-based Aiyana Ltd., and local partners, offers hillside apartments, beachfront apartments, poolside residences and individual villas spread around 40 acres of beachfront location of Frigate Bay in St Kitts for a whopping $405,500 a piece.
|Christophe Harbour Beach Club|
Skerritt says the government is definitely “shifting our tourism product to the higher end of the market.” And he insists that they are also actively working on putting the infrastructure in place to attract the luxury traveller. With a private jet terminal that set to come on stream soon and the island’s Fiscal Incentives Act, he predicts an uptick in foreign direct investment.
The US$15 million-dollar private jet terminal is a partnership between the St. Christopher Air and Sea Ports Authority, (SCASPA); and the London-based Veiling Aviation Limited and is set to come on stream next year.
It will include the development of world class arrival and departure lounges, a business center, and related customs, immigration offices and processing facilities, as well as a landscaped courtyard and events center.
The island’s Fiscal Incentives Act too seems to the working wonders for the administration. The government of St. Kitts currently offers four types of tax holidays for companies. The length of the tax holiday for the first three depends on the amount of value added in St. Kitts & Nevis. The fourth type, known as enclave industry, must produce goods exclusively for export outside the CARICOM region.
Group I enterprises, which add 50 percent or more in value in St. Kitts and Nevis are entitled to tax holidays of up to 15 years; Group II enterprises add 25 percent to 50 percent in value in St Kitts and are entitled to a maximum tax holiday of 12 years; Group III enterprises, which add 15 percent to 25 percent in value in the jurisdiction are entitled to a maximum tax holiday of 10 years and finally, enclave business, which are entitled to a maximum tax holiday of 15 years.
The Hotel Aids Ordinance also provides duty-free concessions (relief from customs duties and pier dues) on items for use in the construction, extension and equipping of a hotel of not less than 30 bedrooms.
While the Income Tax Ordinance provides special tax relief benefits for hotel proprietors granted licenses under the Hotel Aids Ordinance. The gains or profits of a hotel of more than 30 bedrooms are exempt from income tax for a period of 10 years while for hotels with less than 30 bedrooms, the gains and profits are exempt from income tax for a period of 5 years.
Companies that qualify for tax holidays are also allowed to import into St. Kitts and Nevis duty-free all equipment, machinery, spare parts and raw materials used in production.
As Minister Skerritt summed it up: “St. Kitts has shown an ability to deliver good value and private sector investment on the island is being triggered because investors see the potential for the future and the opportunity of putting out products with high value.”