The Tribune

By NEIL HARTNELL Tribune Business Editor AN eastern New Providence real estate development is set to take its full capital investment to $60 million by year-end, after its weekend 'open house' produced a "phenomenal turnout" of 400 visitors and five property sales. Richard Browning, Palm Cay's chief executive, told Tribune Business that the strategy of giving away an $80,000 boat slip in Palm Cay's 194-slip marina to every buyer that closed a deal on Saturday had reaped rewards, giving potential purchasers an "urgency" currently lacking in the overall Bahamian real estate market. Palm Cay's UK-based investors and Board of Directors were in Nassau for the 'open house', and Mr Browning said the results sent them home "fully committed" to invest in further "construction and open new areas" at the 350-400 unit development. He suggested the capital investment for 2012 would "probably get up to $20 million with or without" that financing being generated by real estate sales at Palm Cay. When added to the $40 million already invested prior to Mr Browning's appointment in October 2011, this will take the total spend at the project - sandwiched between Treasure Cove and Port New Providence - to $60 million. Describing Palm Cay's current condition, its chief executive told Tribune Business: "The skeleton is here, the heart is in and we now need to get the heart pumping. With the investors in the UK committed 100 per cent for us to do more, it's hard to the pedal." Recalling the relative success of Saturday's 'open house', Mr Browning said: "When you do something like this, it's a big unknown.... It was an event where the night before we were saying: 'Are we going to get someone to respond to this?' "We got a phenomenal turnout, probably 400 people. We made four sales on the promotional offer we had on the townhomes, and sold one lot and a boat slip at the same time. "It was a great response from people who had the ability to purchase. From the moment we put the last flag up, at 9.59am, cars started rolling in, and they did not stop rolling in until 5pm-5.30pm. I even had a call at 9-9.30pm that night from someone who said they had missed it, and asked if they could come and take a look then." Mr Browning told Tribune Business that Palm Cay had strategically opted for a promotion where anyone closing the purchase of a $499,000 townhome on the 'open house' say would receive a free $80,000 boat slip, rather than simply discounting the value of real estate. This had the advantage of both creating "urgency" in the minds of potential Bahamas-based real estate buyers, getting them "off the fence" and to make a decision, and avoiding any devaluation of Palm Cay's worth. Once prices were discounted, it was hard to get them back up. "It created an urgency which I think is something that is lacking in the real estate market at the moment. There's no urgency for anyone to purchase," Mr Browning told Tribune Business. "There's a lot of follow on from this. The open house is not the be all and end all. We've put ourselves out there and now want to deliver. This is one very small part of where we want to get to. The brand is now out there in the market, and we have to deliver what the market wants." Including the five 'open house' sales, Mr Browning told Tribune Business that in the last four months, Palm Cay had closed sales on six lots, five townhomes and two oceanfront townhomes. "In the boom times that would have been considered very disappointing. In the current economic conditions, that's very good," he added. "The investors are very committed. They were here themselves. My Board was here for the 'open house'. They saw the results, were very pleased, and went back fully committed to do the investment, not only to keep us operating but to do new construction and open new areas. "We will probably get up to $20 million," Mr Browning said of Palm Cay's capital investment plans for 2012. "That's the sort of number taken through the Board, and that the UK is aware of. That will be done with or without sales, but it would be nice to do it without asking investors for a cheque." Among the projects that Palm Cay is targeting is completion of the 60-unit block of oceanfront townhomes, split into two sections of 30, by the end of June. The 194-slip marina is also scheduled for completion, with a fuel station installed by May 2012, along with the introduction of more townhomes to supplement the current "limited stock" due to recent sales. Mr Browning told Tribune Business that Palm Cay was also seeking to launch its marina townhomes by end-2011/early 2012, and introduce a smaller housing stock option for potential buyers. This construction activity, he suggested, would likely see the number of building workers on site ramp up "from the tens into the hundreds". Palm Cay already employs 20 staff directly.