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    Anguilla:
  Tranquillity
   Wrapped
         in
      Blue

Back to the Future

With the worldwide economic recession upon us all, it will be interesting to see how Anguilla real estate fares—as a wonderful destination boasting world class natural amenities and deluxe resorts, restaurants, mega villas, private villas and managed branded communities for those seeking the quieter more sophisticated Caribbean experience, Anguilla remains very well positioned…but as a bargain hunters paradise it has yet to find its footing. Although prices have begun to decline, the declines have not yet reflected the stock market drop of approximately 40% nor have they returned to the range of prices last seen in 2004—the last year in which pricing could be considered “traditional”…pricing prior to the steep escalation that began in 2005.

With the closing of Flag’s golf course development at Rendezvous Bay and with the delay of the expansion plans of Altamer at Shoal Bay West and concomitant delay of Rendezvous Bay Hotel, with the postponement of Privee at Shoal Bay and of Fairmont at Forest Bay, with the absence of any visible progress at Shoal Bay East and with mystery still surrounding the development at Long Bay, Anguilla’s managed community and preconstruction mega villa experiment (which was fostered by Flag and Viceroy and is dependent on sales prior to construction completion) has hit some very hard bumps—some of which can be blamed on irrational exuberance locally and some of which can be blamed on the same irrationality internationally…sadly, however, at least for the time being the bloom is off the rose.

The Government’s commitment to and approval of projects that focused on the marketing and sale of built property prior to construction completion was quite logical at the time, especially as the initial two preconstruction sales developments came to our shores at a time of economic trauma and were both being built on the sites of failed hotels (which were, in turn, attempting to realize all of their income from hotel operations and not from real estate profits)—however even at that time there was a fear that preconstruction sales would foster the type of speculation that Anguilla had always shunned, previously opting to purse quality of life investors who would be happy to make a positive return on their real estate investment but were not driven by the vision of that positive return. With the foregoing in mind, and with sensitivity to the benefits of hindsight, one wonders what Anguilla would look like today if instead of varying the policy on real estate development to facilitate projects that were primarily corporate and speculative, it varied its policies to promote private individual ownership of larger parcels of land on which high net worth families could build personal manors and estates--even if those sites were beachfront.

Such a policy might have reduced the appeal of the larger managed communities as one of the main claims of those branded environments (in addition to their man made amenities) was the availability of beach front villas and direct beach access—which was unique insofar as Government policy had always been to maintain beach sites for tourism purposes as opposed to private home development. However with advent of the mega villa that blurred the lines between tourism facilities and private homes, a case can be made for the fact adopting an individualized mega villa beach development program (perhaps with caveats restricting how quickly the villa could be sold, perhaps with a beach frontage transfer tax and annual tax surcharge, etc) would have been less disruptive to society, would have enabled better phasing of the construction process and better control over imported labor, would have minimized dependence on a few large projects in favor of a more decentralized approach, and would have resulted in better public beach access (as it’s easier to mandate rights of way between private estates than it is to mandate rights of way between offerings in a managed branded community).

With the above in mind, such an individualized mega villa development program for sites both on and off the beach could still be implemented and could even be adopted by some of the projects that are now finding it so hard to secure funding—a large number of high net worth individuals still exist in the world who could finance their own mega villa even if they couldn’t (or wouldn’t) finance a managed community based on speculative preconstruction sales or buy a mega villa they did not design. However, while contemplating the adoption of a more aggressive and more sympathetic manor or estate development program, it is important that the managed communities and mega villas that have begun are successful—it is not in Anguilla’s interest nor in the interest of any of us fortunate enough to live here to see these projects fail, as they will introduce new and augment the existing stock of valuable manmade amenities when they are completed…but will hurt us all if they do not open as envisioned, even if they open later than envisioned. As a personal commitment to the managed communities and to the mega villas under development, I am in the final stages of opening a real estate gallery which will showcase those offerings as well as showcasing individual luxury villas and parcels of land—the real estate gallery itself is in The Historic Old Factory complex which has been artfully restored (if I may be so bold) to provide a viewing platform that is commensurate with the concepts and visions of our developers and island visionaries (both past and present)…I look forward to personally welcoming you.

Scott Hauser is the Managing Director of Sotheby’s International Realty / Anguilla Properties and can be reached or contacted as follows: Phone numbers @ 264-498-0123 or 264-235-4050; Fax number @ 264-497-2820; Email address Scott.Hauser@sothebysrealty.com

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