|The Bahamas Investor Magazine
July 13, 2014
July 13, 2014
From modest second homes and rental investments, to luxury villas and private islands, The Bahamas has been a home away from home for high-net-worth individuals for decades. Add together the prospect of residency in a low-tax jurisdiction, great weather and excellent living standards and you have the full complement of lifestyle and investment benefits.
US citizens have been the major clients for Bahamian realtors, with American millionaires flocking to these shores since the heady days of fame and glamour of the 1960s to the era of Wall Street hedge fund kingpins and Silicon Valley dotcom entrepreneurs of the ’80s and ’90s. But with the rise of the global economy, investors in emerging markets such as China and Latin America, as well as in Europe and Russia, are also looking to diversify their portfolios with property, presenting even more opportunities for realtors in The Bahamas.
“We are seeing more buyers from Britain, Europe, Canada and South America coming into the market,” says George Damianos, president of Damianos Sotheby’s International Realty. Through the Sotheby’s brand recognition, Damianos partners with luxury real estate auction firms serving high-net-worth individuals worldwide to market a range of properties, including big ticket items such as Innocence Island, the largest privately held island in The Bahamas. “Buyers are looking for a warm, easy-to-get-to location with a stable government. They are looking for value and properties they can sell and not get a financial beating if they have to sell.”
According to Cara Christie, director and broker at H G Christie Ltd in Nassau, high-end condos and private islands are selling well again after the recent prolonged recession, with the majority of buyers being foreign investors. “We are coming out of the bottom of the curve, and there is quite a lot of interest in the second-home market,” she says.
“The potential is there and there is a lot of interest for boutique resorts; persons wanting to buy property that they can rent out and get a good return on investment and they want to be able to use it also,” adds Mario Carey, president and chief executive officer of Mario Carey Realty (MCR).
Moreover, as the US continues to tighten its immigration policy and regulatory environment, The Bahamas becomes more attractive to foreign investors. “Property in The Bahamas is becoming more popular with Brazilians, who want to be in the US, but don’t want to pay US taxes and have limited time to travel,” says Christie. “So, they often look to buy a place in The Bahamas. That way they can go back and forth to the US without having to fly back to Brazil.”
Carey says that there is some interest from further afield in Asia and Europe and other countries in Latin America. “There are a lot of the business models, particularly in the financial services sector that are targeting the Latin American market, because there are still a lot of tax advantages associated with setting up funds in The Bahamas and being resident here.”
Capturing market share
As the client base diversifies, realtors have to adapt their marketing efforts to suit. At MCR, one of the strategies has been to take The Bahamas to the world. By participating in luxury property trade shows in China and trade missions to Dubai and Abu Dhabi, MCR is pioneering efforts to raise the profile of The Bahamas property market in lucrative emerging markets. “We are shifting a lot of our marketing dollars into places such as China,” says Terrinique Pennerman, marketing manager at MCR. “We know that the Chinese are savers and want a return on investment. They are moving into the Americas and The Bahamas to buy property–the money is there.”
Eyeing a share in that growing market, the realtor has translated its website into Mandarin, organized high-level meetings with Chinese dignitaries and made forays into establishing partnerships in the Asian nation. “[Chinese-backed megaresort on Cable Beach] Baha Mar is going to be the gateway that opens the door to China,” adds Carey. “With the visa-waiver programme and direct flights from Beijing, the market is going to grow. When those clients come to The Bahamas, we want to be the people that they know, that are experts in the language and are the go-to people to connect with the banks, the government and local businesses.”
For H G Christie, the emphasis so far has been on the Latin American market. “I speak Portuguese, so we have been building contacts there and have a lot of word-of-mouth connections in Brazil,” says Christie. “We are working on increasing marketing in that region, but the Chinese market is also interesting, because it is poised for growth.
It’s a new emerging market, and they have a lot of money to invest. We might need to look to employ someone who speaks Mandarin in the near future.”
Relocation and acclimatization
Even if you speak the same language, there are a number of challenges involved in relocating to a new home overseas. On top of house hunting and shipping furniture and possessions, there are also legal issues, permits and visas to consider. Softer factors such as cultural differences and establishing a new professional and social life also have to be taken into account.
To make this transition easier, there is a growing number of companies that are offering a complete “concierge” service that helps people sell their property at home, find a property and start new lives in The Bahamas.
“We are used to working with high-net-worth individuals and we understand their wants and needs,” says Garry Godfrey, founder of Move to The Bahamas, which acts as a broker between potential buyers and Bahamas realtors and helps in all aspects of the move. “You cannot go to these clients with a brochure and the usual approach, they just won’t have the time.”
Catering mostly to clients in the UK, Godfrey and his London-based team started the select buying agency around five years ago, building a client base organically through their connections in The Bahamas. At the end of 2013, they launched a website. “We have been very surprised about the positive response we have received from the website and the number of people looking for something like this,” he says. “We are not going out and selling The Bahamas to people who aren’t already thinking of coming here. But, if you are going to come here, then let us help make it an enjoyable experience.”
From the moment a client decides they are looking to relocate to the jurisdiction, Move to The Bahamas looks to provide a tailored service to make the process as smooth as possible. “To start with, we will visit the client’s home and assess, their tastes and what style of property they prefer. We look at every detail, right down to the type of furnishings they like,” says Godfrey. “We need to gather as much intel as possible, as we have to really get to know the client.”
Move to The Bahamas then helps maximize the sale of the property in the UK and gets them ready to relocate. “We then arrange a trip to The Bahamas, meet them at the airport and line up viewings of places that we think they might like. We put them in touch with good contacts in the legal and realty fields and introduce them to people who we think they will get on with, not just in business, but also socially.”
As more foreigners look to follow this route, the entire Bahamian archipelago stands to benefit. “I think Eleuthera, for example, is the sleeping giant,” says Damianos. “Beautiful beaches, three international airports and lots of room for development.”
Carey says that by keeping an eye on the developers, the realty company can see where the interest for investment is. “Wherever the developers start activities, they obviously feel that the market there is recovering and that the consumers will follow.”
Godfrey at Move to The Bahamas adds that The Bahamas “is looking forward and has not been burdened by the bureaucracy of the US or UK. It’s a great place to do business, massively organic. That is also true of the property market: here you can go out for dinner and you come back and you have either sold a house or bought a house.”