The Tribune

• $40m project’s construction to start in two weeks

• Developer: No impact, but prices, supply ‘a concern’

• Reiterates call for faster permanent residency process

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian developer yesterday said “the high end real estate market is the busiest I have ever seen it” as he prepares to break ground on a $40m project within the next two weeks.

Jason Kinsale, Aristo Development’s principal, told Tribune Business more than 30 percent of the units in his 11-storey Aqualina development have already been pre-sold as market demand for Bahamian real estate valued between $1m-$10m continues to soar amid the post-COVID surge.

Disclosing that there is “nothing left” in the $4m price bracket in high-end communities such as Lyford Cay and Old Fort Bay, he voiced optimism that the recent hike in construction material prices - coupled with supply chain bottlenecks - will not impede Aqualina’s progress as it has done other projects such as Sandals Royal Bahamian’s $37m upgrades.

“Obviously it’s a concern for all of us,” Mr Kinsale told this newspaper of the construction materials situation. “I was up in Toronto recently, and from what I was seeing up there, there was a lot of price gouging on concrete and steel.

“I understand there was a cement shortage here as well but, as these things start to calm down in the US and Canada, hopefully over the next six months, then we will start to get back to some semblance of normalcy. My understanding is that it’s not a long-term problem.”

Aqualina is presently mobilising its contractors and construction workforce to start installing its foundation, and related pilings, within the next two weeks and Mr Kinsale said the project had yet to feel the supply chain shortages and price hikes that have impacted others.

“We had to order some steel and didn’t have any issues,” he added. “We have always looked at a two-week lead time, and were still able to buy in that period. Plywood has increased substantially, but we don’t have one sheet of plywood in the project. It’s mostly concrete.

“I believe this is hurting the middle market, especially the $500,000 condominium, as you can’t increase prices to offset costs. The buyers don’t have the budget. It’s having an impact on everybody, but some are able to weather the storm better than others. We’re hoping that by the time we’re ready for major materials construction costs will have come down by then.”

Mr Kinsale said Aqualina has pre-sold ten of its high-end condos to existing buyers, with units ranging in price from $2.6m up to a peak of $11m for the penthouse residence. “Considering that we’ve not broken ground and just got the project started, we’re pretty happy with that,” he added. “It wasn’t something we really expected. It makes you realise there’s a lot of money out there.

“I think that the high-end real estate market without a doubt is the busiest I have ever seen it. If you try and find anything in Old Fort Bay, Lyford Cay, in the $4m range, nothing is left. Everything is getting into the $5m-$6m range. Every day I’m getting e-mails saying ‘sold’, ‘full’, and ‘nothing available’. It’s all the high-end communities.”

Defining the high-end market as between $1m-$10m, Mr Kinsale disclosed that The Bahamas was attracting American real estate purchasers in numbers “we’ve never really seen before” because the benefits of permanent residency were more than offset by the global reach of the US tax system.

He added that this interest was “being driven by lifestyle decisions” in the aftermath of COVID-19, as persons with wealth and means sought to escape colder home climates and pandemic lockdowns/health restrictions via properties in other countries.

“I didn’t really understand it until I was up in Toronto and sitting there for six weeks,” Mr Kinsale told Tribune Business. “You’re sitting in the house; you’re cold and bored, with nothing to do. People with money don’t like to be locked up and told what to do. “I said: ‘I understand why they’re coming to The Bahamas and other parts of the world.”

Aqualina will employ around 175 workers at the construction peak, with units starting at 2,6900 square feet for a three-bedroom. “The developments that have done well historically, Bayroc, Albany and Caves, all had larger condo units in their development,” the Aristo chief explained.

“We don’t try and fool ourselves into believing there’s unlimited demand, and we’ve learned over the years to be conservative in our forecasting. If we can, we’d like to sell one unit a month, but if it sells out sooner then great.”

Mr Kinsale, though, said he had yet to see any improvement in the pace at which economic permanent residency applications are processed on behalf of high-end expatriate buyers. “It’s very frustrating, and it’s something that in my opinion is a major revenue source for the country,” he added.

“I’ve said it before and sound like a broken record, but if we make it easy and people tell their friends and family they got permanent residency in a month, it will attract more persons to come here. Affluent people hang out with affluent people. We need to expedite those quickly.

“I don’t understand why it has to go through Cabinet approvals. It boggles my mind. Make them easy. It’s not that hard, especially if we have financial concerns and need money. Fifteen thousand dollars for an economic permanent residency application can add up pretty quickly, and I’m sure there’s plenty of them out there,” Mr Kinsale said.

“I’ve seen the kind of growth they’re having in Toronto, and it’s all driven by Immigration - responsible Immigration. That’s something we should really be pushing.”