The Tribune

• Aqualina eyes three more rises before completion

• Developer: 60% of units sold; 40 workers on-site

• Bahamas boosted by costs 30% below Florida

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian developer yesterday disclosed he has increased prices on the multi-million dollar units in his latest project by 5 percent in response to soaring construction materials costs.

Jason Kinsale, Aristo Development’s principal, told Tribune Business that not even high-end real estate is immune from surging global inflation as he predicted that his 11-storey Aqualina development will likely implement “three more price increases of 5 percent” before construction is completed by December 2023.

But, with 40 construction workers already on-site and work having reached to the first floor, he said the Cable Beach-based development is benefiting from favourable market forces as 60 percent of the 28 units have already been sold.

Top among these trends, Mr Kinsale said, is that beachfront real estate in The Bahamas is around 30 percent less expensive than competitor sites in Florida. With buyers struggling “to find anything desirable” in the so-called ‘Sunshine State’, the Aristo chief said they were being attracted to take a closer look at this nation.

“We’ve finished the foundation and are just starting the first floor,” Mr Kinsale said of his $40m project, which lies on the northern New Providence coast in close proximity to both Baha Mar and former prime minister, Perry Christie’s, residence. “The first floor is scheduled to be completed over the next 30 days. It’s moving along quite nicely.

“This is the beginning, so we’ve got a ways to go. There’s 10 storeys left. But we’ve got some momentum now, and here we go. We’re pretty on track. We lost a bit of time due to COVID-19, but are moving well.

“We have 40 guys on site now, and will ramp up to 150 in the next few months as we get more into the final stages of the project. The end of next year, December, is the finish target. If this world of ours can stay calm I don’t see what we will not make it. There’s always something that keeps you on your toes. Just when you think you can relax... there’s not a moment’s peace.”

High-end Bahamian real estate was one of the sectors that rebounded fastest when the economy re-opened following the 2020 lockdowns and border closures. Aqualina is among the developments to benefit, with Mr Kinsale saying: “We’re easily 60 percent sold now, so we’re pretty happy with that.

“We’re seeing a nice mix of buyers from Europe, Canada and the US. We’re seeing people seeking residency. The hotels have been really busy for the last two months, which is helpful in getting people here” to look at and purchase real estate.

Aqualina’s units are all three, four or five bedrooms, and have been sized at 2,600 square feet and up. Prices range from $2.6m to “over $10m” for the penthouse. “The main thing is we don’t have so many units to sell,” Mr Kinsale added, drawing comparisons with his adjacent One Cable Beach project that was completed previously.

“One Cable Beach had 73 units. These are larger and more expensive. You learn as you go. Some at One Cable Beach were less desirable because of the shape of the building. At Aqualina, all look out over the water so we don’t have a bad unit in the building.”

Mr Kinsale, who has also developed communities such as The Balmoral and THIRTY|SIX on Paradise Island, said Aqualina had not totally escaped the global supply chain disruption and inflation that continues to impact virtually all segments of the Bahamian economy.

“We’ve been fortunate because most of our requirement was concrete, and that is produced on-island,” he told this newspaper. “We didn’t see any major delays. We can plan for it, whereas people who were finishing their projects hit a major delay.” Drywall, which was previously taking five months to arrive, is now down to a six-week lead time.

“From a pricing perspective we’ve definitely seen an increase for sure on construction materials,” Mr Kinsale confirmed, “so we’ve had to increase prices on the units a bit as well. I’d say we’ve increased them by around 5 percent. We will have probably three more price increases of 5 percent throughout construction as well.”

Mr Kinsale said this was a common practice where prices were raised as a development progresses so that early buyers gain the reward of a lower acquisition cost. “We try and reward those who buy early and take a bit more risk,” he explained.

And favourable real estate market trends are helping to somewhat offset inflation’s impact. “What’s helping us is that a lot of our buyers are going to Florida and shopping around, and they cannot find beachfront property in desirable areas,” Mr Kinsale told Tribune Business.

“Florida is at $1,800-$2,000 per square foot for beachfront, and we’re at $1,200-$1,400 a foot. It’s a significant difference. The issue you’re having in Florida is that it’s very hard to find anything desirable, so buyers are saying: ‘Let’s go to The Bahamas’.

“I’m recognising there’s going to be a housing shortage here as well in the $1m to $5m bracket. There’s very limited inventory. It’s definitely an issue. It’s not just us; it’s worldwide. But we don’t have as much inventory compared to other countries. We have to figure out how to build faster I guess.”

While nothing has crystallised, Mr Kinsale indicated that the growing lack of suitable locations in New Providence may lead him to islands such as Eleuthera or Exuma for his next real estate project.

“We’re always looking,” he added. “The issue we’re seeing now is it’s very hard to find land. That’s the challenge we’re having, but that’s the business we’re in; developing. We’ll continue to do new projects in the future and a lot of people are talking about Eleuthera and Exuma as well. But it’s hard to find beachfront property for sale there, too.

“We are thinking about it, but are not doing anything yet. You’re going to be forced into it. That’s the reality. Nothing is certain right now by any means, but the prices they are asking in Harbour Island right now are over $2,000 a square foot for a lot of beachfront property over there. It’s very expensive.”