(Island of Grand Cayman) — Despite being labeled as a "safe haven for tax dodging wealthy politicians" during the recent US presidential election (as some attempted to paint Mitt Romney in 2012), the Cayman Islands' hedge fund eco-system is flourishing today. apartments
The financial industry on the Cayman Islands is a legitimate, open, and legal tax haven for wealthy individuals around the world looking to implement more efficient tax strategies for their income. The days of drug dealers and dictators laundering suitcases full of cash from more than three decades ago are long gone.
The banking and financial industry on the Cayman Islands is now one of the most controlled and scrutinized in the world. Due to the lengthy background checks conducted by the government, it is much more difficult to obtain Government approval to open a bank account in the Cayman Islands than it is in any other US bank.
The Hedge Fund Governance industry has grown dramatically since 2000. There is a highly experienced hedge fund industry support infrastructure (law firms, CPAs, tax advisors, bankers, recruiters, and administrators) in place in addition to the approximate 9,500 registered hedge funds in the Cayman Islands today.
Many top-tier law firms help fund managers set up and organize their funds on the island, and top accounting firms and seasoned fund administrators make it simple to set up funds here. The Cayman Islands has a competitive advantage over other fund domiciles around the world due to its fast time to market and well-developed support services industry.
With the growing Hedge Fund and support services industries, Ken Dart, founder of Dart Realty, has quietly built and successfully leased a $700 million mixed-use project on Grand Cayman island called Camana Bay over the last 5 years.
Camana Bay is a thriving new town center in Grand Cayman Island's core. The 500-acre mixed-use project extends from the world-famous Seven Mile Beach to the peaceful North Sound; it was one of the first examples of New Urbanism in the Caribbean when it opened in December 2007.
The first phase of Camana Bay, consisting of 544,000 square feet of mixed-use space, has been completed. The plant, which includes 312,000 square feet of class A office space, is currently 93% leased. A total of 63 high-end terrace apartments totaling 94,000 square feet are fully rented, with a waiting list of potential tenants. The project's final portion is retail space. The 138,000 square feet of space is currently rented to the tune of 80 percent.
Ernst & Young, BNY Mellon, Citco, Aon, Grant Thornton, State Street, London & Amsterdam Trust Company, and many others are among Camana Bay's top-tier commercial tenants.
Camana Bay's phase II construction would place a greater emphasis on residential units. The master plan calls for a diverse mix of condominiums, courtyard town homes, cottages, and single family homes characterized by walkability, neighborhood, and Caribbean living on and near the water. New Urbanism appeals to both Caymanians and North American vacation home owners, and it provides an alternative to the island's sprawling canal developments. Phase II's first project would include nearly 115,000 square feet of condo-style apartments. Consumer demand is the most important factor in timing.
Unlike other Caribbean ventures that have struggled in the five years since the global financial crisis of 2008, Camana Bay appears to have two major advantages: first, a current and growing internal marketplace from which to source potential commercial tenants and residences. Camana Bay does not need to hire "off-Island" tenants to lease commercial space since several hedge fund support and services companies are relocating from nearby Georgetown.
Second, Camana Bay has a very deep-pocketed developer with a reported net worth in the billions of dollars who has the financial'staying power' to invest, build, lease, sell, and manage its real estate assets internally over a long period of time. For commercial tenants considering relocating their office operations, this adds to their trust in the local market.
The residential portion of Camana Bay is also benefiting from the rise in local real estate home sales activity in the second half of 2012.
Michael Joseph of Remax Cayman Islands, a local real estate expert, says, "Cayman has seen a genuine rise in activity in the last three months relative to the previous three years, which is largely due to increased confidence returning to the market from not only local residents, but also North Americans who see value. This, I believe, is due in large part to the revised and ongoing immigration policies, as well as several major projects in the works, such as a new larger port berthing facility for cruise ships, an airport runway extension for larger plane service, a new medical tourism hospital, the establishment of a special economic trade zone, and, finally, new highway infrastructure works."
"Housing inventory has begun to decrease, and the average sales price (currently USD $550,000) and number of sales transactions are on the increase, signaling a demand shift!" Joseph continues.
Bottom line, Camana Bay's business model is inextricably linked to and growing in tandem with the support services sector development of the local hedge fund industry. Camana Bay also benefits from the growing tourism industry in the Cayman Islands. In 2012, the tourism industry in the Cayman Islands employed over 1,300 people, with an increase of 8% in air travel tourists (321,650 passengers in the full year 2012) and a 7% increase in cruise visitors (1,507,370 cruse passenger visits in 2012).
Jackie Doak, Dart Realty's COO, tells World Property Channel, "Camana Bay's vision is to develop a well-planned, lively, and long-lasting town in the heart of Grand Cayman, extending from Seven Mile Beach to the North Sound. We first concentrated on the school and Town Centre's core community-building developments, which helped create Camana Bay as the island's civic and social hub. Every day, more than 1,000 people live and work in Camana Bay, and we're planning our next phase of residential growth carefully. We're optimistic that Camana Bay will prosper as the Caribbean's premier New Urbanism development if we stay true to Ken Dart's vision of a world-class waterfront town characterized by walkability, ample open spaces, and a lasting sense of community. We believe that the exclusive Camana Bay experience that draws tourists to the Town Center will eventually entice them to call Camana Bay home."