25/05/07 - Saint Lucia Builds on World Cup Fever

MANY of the Barmy Army who will be flying out to the Caribbean this weekend could come back from St Lucia with more than a suntan after the cricket World Cup.

An extraordinary building boom across St Lucia, one of the Windward Islands, means that there are more new properties for sale on the island than at any time in its history. Buyers who fear that this could mean a line of high-rise blocks along the beautiful shoreline can take heart from regulations that limit new buildings to the height of a coconut tree.

The St Lucia Government encouraged all the building work by introducing the aptly named Cricket World Cup Incentives Act last year. That allows anyone to build and furnish a new property without paying import duty on the materials used. Furthermore, any income generated from the property would be free of tax for ten years after the tournament ends.

Many local people have taken advantage of the scheme and have applied for planning consent to build extra rooms on to their properties to house cricket fans during the World Cup. The proviso is that the properties must be finished in time for the World Cup, which is where some of the islanders have come unstuck. When I visited a few weeks ago the island was still in the throes of massive renovation, with plenty of building sites where finished properties should have been. It was difficult to imagine the work would be completed in time. This was echoed by a local taxi driver: when asked how many developments would achieve this Sunday’s completion date – the opening day of the World Cup in Jamaica – he simply chuckled and said that the majority of them “haven’t a hope in hell”.

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But investors need not panic. The larger developers have seen the potential of this Caribbean island and have begun work on a series of schemes. Richard Eames, managing director of Island Villas, which represents Savills in the eastern Caribbean, is enthusiastic about the island’s promise: “St Lucia’s property market is still in its infancy stage, with prices 40 per cent less than its neighbouring island, Barbados. If you are interested in buying on the island, the earlier you get involved in these new developments the better the investment.”

One such development taking advantage of the tax-free incentive is The Landings, a total of 229 apartments on a prime 19-acre site on the causeway leading to Pigeon Island in the northwest corner of St Lucia. Due for completion in 2010, the complex will include a 100-berth marina, spa, seven swimming pools, bars, shops, restaurants, tennis courts and a fitness club. There are four phases of construction with prices for one, two or three-bedroom apartments ranging from $595,000 (about £300,000) to $1.8 million. The development will be a five-minute drive to St Lucia Golf and Country Club, where owners of apartments will get lifetime membership. Rodney Bay, the hub of St Lucia’s tourist industry, is just down the road with many popular restaurants, bars and hotels.

There is an opportunity to join an “hotel” rental pool, allowing the owner 12 weeks’ residence a year. The conservative rental forecast is pretty good, with returns of 3 per cent for the first few years, aiming for 9 per cent returns after that. However, be warned: if you choose to enter the pool, then you are obliged to buy one of the development’s furnishing packages for your apartment. These will set you back a minimum of $42,700.

The figures are starting to add up but with sterling strong against the dollar, all apartments being built to five-star hotel standards and St Lucia recently being voted one of the top islands in the world by Condé Nast Traveller, there is a strong argument to buy here.

Oliver Gobat is director of sales for The Landings and grew up on St Lucia. “Obviously, I am a little biased but I am so confident in the development that I have bought an apartment myself,” he said. “There are excellent returns to be made on your investment if you can hang on until the development is finished. We have already brought in a price rise this week for the first two phases.” Gobat believes that The Landings will raise the bar for St Lucia’s property market.

A further positive is that the properties can be bought freehold, which is a rarity on the St Lucian coast. This is because The Landings is located on a man-made causeway and thus is not subject to the Queen’s Chain regulations, which state that all property sited within 20 metres of the coastline is owned by the Government and can be sold on leasehold only.

Such regulations give St Lucia a balance between development and conservation. The island is eager to protect its environment – almost a third is mountainous rainforest. Its famous twin volcanic peaks, the Pitons, are part of a designated World Heritage Site, which includes the volcanic complex with hot springs and sulphurous vents. The surrounding vegetation is tropical and subtropical forest. The marine area of the site includes coral reefs and a variety of sea life such as hawksbill turtles, whales and whale sharks. The island has a scattering of conservation areas, which include Fregate Islands Nature Reserve, the Maria Islands Nature Reserve and Pigeon Island National Park.

However, investors cannot be too smug about buying into an eco-friendly island. The airport is at the other end of the island, and with only one road traffic is heavy. There is an alternative to the 1½hour drive: a helicopter taxi service from Rodney Bay to the airport. True, it will take only 20 minutes but the cost to your carbon footprint will be frightening.

The World Cup has definitely put St Lucia on the property map and the authorities are taking a sensible view on the development of the island. But only when the tournament is over will we be able to see whether investors have managed to hit the market for six.

FACT FILE

- Virgin Atlantic and British Airways fly to St Lucia - Virgin three times a week and British Airways twice. The flight takes just over nine hours

- St Lucia has a tropical climate, with one wet season (June to December) and one dry season (February to May), with January the transition month.

- The French and British battle for control of St Lucia began in the 17th century. Britain eventually won control in 1814, granting independence to St Lucia in 1979.
 

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