Dubai Property Weekly

Mubadala venture sets sights on St Lucia

Ginetta Vedrickas

Freelance Writer

One of Abu Dhabi’s leading investment companies has found a choice spot for itself under the Caribbean sun. This comes in the wake of Mubadala Development Company picking up a 50 per cent stake in Los Angeles-based Viceroy Hotel Group, and together they will be focusing on an aggressive rollout of newproperties bearing The Tides and Viceroy brands.

First up will be a hotel on the sunkissed island of St Lucia. A sizeable sum of $100 million is being invested to turn the world-renowned and much-loved Jalousie Plantation into a world-class five-star hotel and residential development.

The Viceroy Hotel Group was “specially selected from a beauty parade of hotel operators,” says Naomi Cambridge, sales director of Sugar Beach villas, who believes this would give potential buyers confidence in the product. “We believe that we have found the perfect combination of partners to provide the expertise necessary to create one of the best resort developments in the world.”

That the developer is not reliant on ban finance to complete the development may also add to investors’ sense of security at a time when many prestige projects are faltering across the world.
Wide reach

The Viceroy Hotel Group is one of the fastest growing deluxe hotel brands, currently opening hotels across the Middle East as well as flagships in London and New York, while continuing to manage existing properties in Miami, Los Angeles, Mexico and St Lucia.

With the World Bank placing St Lucia in the Top 30 countries to invest, 37 of the 85 privately-owned, buy-to-let villas have already been snapped up. Completion is expected by the end of 2011.

The Sugar Beach villas’ selling agents, Cardea Property Consultants, believe buyers won’t just be attracted by lifestyle opportunities but also by the investment potential. The villas form part of the hotel’s rental pool, affording owners four weeks free usage and a revenue split of the rental return, guaranteed at a minimum five per cent net until the end of the first year of operation. St Lucia may not yet have the profile of other Caribbean destinations such as Barbados, but Sugar Beach’s sales director Naomi Cambridge says: “Over the last few years property in St Lucia has experienced a 15 to 20 per cent annual appreciation, which is set to continue.

Buying would be 30 to 40 per cent more expensive in Barbados, in comparable terms of beachfront location and the five star hotel management company.”

Safe haven

Cost aside, few other developments in the world have a protected Unesco World Heritage status. Naomi predicts that returns on rental villas will be around seven per cent by the end of third year and adds the island is a safe haven for investors. There is no VAT, capital gains, inheritance or estate taxes in St Lucia, and a stamp duty of two per cent is payable only on the land if construction has not started on your particular villa.

The St Lucian government has also granted buyers at Sugar Beach a 15-year holiday on income tax and a 50 per cent waiver on annual property tax for five years.

The villas start from $610,000 up to $2,100,000 for buyers opting to use the rental pool model, but totally private villas are also being offered for $2.30 to $9 million. Private residence buyers can still rent their properties with full management from the Tides brand. Resort facilities include a luxury spa, three restaurants, four bars and beach club, while no other building permission will be granted on the 192 acres of rainforest and pristine beaches surrounding the development.

Naomi believes UAE-based investors will be tempted to followin Mubadala’s footsteps, “The Abu Dhabi Sovereign Wealth Fund has a lot of cache with UAE investors, the fact that they have chosen to invest in the Viceroy Hotel Group highlights that it is a solid investment.”