Financial Times House & Home, 21 June 2013,
By John Arlidge
The country is finally allowing its people to buy and sell homes but property lawyers and agents are still illegal
Herald Scotland, 18th May 2013
SCOTS are at the heart of a new deal to build the first golf course and resort development in Cuba since the communist revolution more than half-a-century ago.
The Economist, May 25th 2013
AFTER the 1959 revolution Fidel Castro declared that golf was a “bourgeois” hobby, unsuitable for communists. Most of the island’s courses were built on, and no new ones have been developed since. But the government has just given the go-ahead to a new golf resort, in what it claims is “the start of a whole new policy to increase the presence of golf in Cuba”. In the same week it pressed ahead with the prosecutions of several foreign businessmen for corruption. The developments, which seem to be linked, show how Cuba is changing its attitude to business.
Listen to clip of BBC Radio 4 feature on the Carbonera Club (May 2013)
We are in an agreed schedule with our partners, the Cuban Government, for The Carbonera Country Club and Golf course to be brought to the market, a schedule which is nearing completion. Now approved we will soon be in a position to detail our real estate product within this gated golf development to the many enquiries that we have received.
We anticipate revealing the details of our offer, including the prices and specifications of the land and real estate on offer, its ownership terms that include the possibilities for ownership as well as the dates of the Private Invitation to our members and the Public Offer, in the third quarter of 2013.
With low or no taxes and good rental revenue potential built in, Cuba will tick all the right boxes for real estate and land purchase. This, together with an ever-increasing tourist trade will provide a high volume of not only potential buyers but renters waiting with only a limited supply of stock available. Right now 10 million U.S. citizens can already visit Cuba but technically they can’t purchase, yet.
While the ground appears shaky elsewhere, the outlook is positive for the Cuban economy, with the tourism industry in particular set for robust expansion over the coming years; average real GDP growth could be approximately 4% each year for the next few years. With great medical services, an unbeatable climate and a very friendly tax regime, the future looks bright.
And that's why people will go. Because when all the facts and figures are submitted - and the figures on Cuba are better than most - and the strategies and projections have been done, Cuba still remains a great place to spend time; not a dreary scrub island, and that will keep both the smart investors and the end-users coming. From Columbus to Hemingway and Churchill, it offers something that is rare in international markets - a place that looks even better to the naked eye than word of mouth or photos offer.
As we are finalising our plans for the gated golf development in Cuba, some new collaborations have been made.
Tony Jacklin, our guest at The Montecristo Cup, liked what he saw in Cuba and has become increasingly involved in our project and will be associating The Carbonera Club with Tony
Jacklin Design and his golf academy.
We have also formed an association with GHM Hotels to manage and operate the future oceanfront Hotel & Spa within the Carbonera Club.
GHM, whose flagship hotel The Setai in Miami is a destination in itself, will also operate the rental of the concierge service villas that will be located along the oceanfront
and lagoon and which will be available for sale.
While we anticipate what has been described as ‘the real estate buy of the decade’, it has been interesting to watch what has been happening to the real estate market in general. It may appear that looking for signs of an economic and housing recovery is becoming like watching grass grow.
Prime properties have recovered their losses in London, Moscow and Hong Kong, but these trend towards owner-occupier purchases with spare change for a helicopter. Monaco has some good things to show, but elsewhere the good news has only been a blip on the radar. The previously wise money headed for the easy pickings of Miami to get a bargain ($82 billion in total sales). Others sought the emerging markets to generate yield and escape the currency yo-yo, or holed up in the relative safety of the tax havens to weather out what was hoped to be a short storm. But with the continued increase in the cost of living and taxes and decrease in employment a different picture is emerging. With the raising of taxes in the US, for example, sales of previously owned US homes dropped 3.8% in May to a six-month low after a revised 1.8% decrease in the previous month, the National Association of Realtors reported. Markets are bracing for a 5% decrease.
How long before those bargains in Miami return a good steady yield is anyone’s guess; emerging markets are not a bad bet, with Brazil still showing good signs, neither are some select buys in Eastern Europe.
But in general the rising taxes and the tax hunting dogs are making it difficult to get above 7% IRR. Even the traditional havens are getting clobbered. Switzerland got most of the action because of its stable currency but the recent news is that the IRS is close to agreeing a deal with the Swiss to gain access to Americans' bank accounts.
Switzerland is also pursuing talks with the UK, Germany and reportedly other countries towards an agreement under which the holders of Swiss bank accounts would maintain the confidentiality of their account holders but pay a percentage of their assets to their home tax authorities - an eye-watering 30% withholding tax.
Future taxes are going to create some destruction as well as opportunities for real estate investments. As a broad generalization, it's pretty clear that there is no happy future in store for the high-tax countries. It's difficult to prove a direct causative link between lower taxes and higher growth, but at the minimum one can say that there is a very strong association between the two. What is perfectly clear is that these contrasts are going to become more marked as time goes by: a few percentage points difference in growth or deficits per year, and after a few years the disparity grows very marked. Little by little, the high tax countries are going to fall further behind in yield, with even higher taxes and the erosion of standards of living.
If you are thinking about visiting Cuba either for The Montecristo Cup or throughout the year, we now have our own in house travel department that can help to guide you. Cuba’s identity makes it one of the most colourful and exotic places on earth. It has a fascinating history of conquistadors, buccaneers and smugglers; home to the cocktail, the cigar, the carnival and salsa, its breathtaking architecture flows from baroque to art nouveau and deco. The continuity of the past with the present, and a spectacular backdrop of lush rainforest, white beaches and coral reef, makes Cuba an extraordinary experience.
Our concierge sales team can help you with your travel planning if you are thinking of taking a look.
CALL DIRECT: Tel: +44 (0)1481 714 898 or visit us at www.esenciaexperiences.com