Caribbean Property & Investment Review — June 2010: T&T’s First Female PM and Hurricane Season

Publication Date: 3 June 2010  |  Coverage Period: 3 May – 2 June 2010

Morning Briefing

• Trinidad and Tobago general election result (May 24) delivers historic victory: Kamla Persad-Bissessar and People’s Partnership coalition win 21 of 41 seats; Persad-Bissessar becomes T&T’s first female Prime Minister
• T&T property market uncertainty resolves with coalition victory; post-election clarity expected to support commercial real estate and energy-sector property commitments by late June
• Atlantic hurricane season opens June 1, 2010; property and tourism investors begin seasonal risk monitoring; early forecasts call for active storm season
• BP Deepwater Horizon well continues gushing crude; spill expected to be capped mid-July; Caribbean tourism perception risk gradually receding as investors distinguish physical vs. reputational exposure
• Jamaica IMF programme on track; North Coast property market shows resilience to BP perception noise and maintains appreciation trajectory into summer 2010
• Dominican Republic FDI pipeline accelerates into early hurricane season; Punta Cana resort and residential development continuing strong momentum

T&T Election Earthquake: Persad-Bissessar’s Historic Victory

The May 24 general election delivered a shock result that reshapes Trinidad and Tobago’s political landscape and has profound implications for Caribbean governance and property investment. The United National Congress (UNC)-led People’s Partnership coalition, led by Kamla Persad-Bissessar, won 21 of 41 parliamentary seats, defeating incumbent Prime Minister Patrick Manning’s People’s National Movement (PNM), which won 12 seats. The coalition’s victory, with a comfortable majority, represents a decisive mandate for change. Persad-Bissessar, a woman of Indo-Trinidadian descent, becomes Trinidad and Tobago’s first female Prime Minister and only the third female head of government in the Caribbean region (after Dominica’s Roosevelt Skerrit being male, but previous Caribbean female leaders exist). The result sends strong signals about political change across the Caribbean and Caribbean diaspora communities globally. For property investors, the election outcome removes uncertainty that paralysed T&T real estate transactions through May. The new coalition government has signalled commitment to maintaining energy sector investment while reorienting fiscal priorities toward social programmes. Property developers and investors are recalibrating commitments with clearer policy expectations under Persad-Bissessar’s leadership.

Persad-Bissessar Government: Early Agenda and Property Market Signals

Kamla Persad-Bissessar was sworn in as Prime Minister on May 26, 2010, just two days after election night. Her new government enters office with a clear mandate to reform fiscal priorities, combat crime and corruption, and maintain T&T’s energy sector competitiveness. Early coalition signals indicate that energy policy will not undergo radical realignment; rather, the government intends to streamline energy operations and redirect public revenues toward social spending and infrastructure. This positioning, while potentially constraining government property development spending relative to Manning’s era, provides clarity that energy sector real estate investment—refinery expansions, LNG facilities, petrochemical infrastructure—will continue. Private commercial property in Port-of-Spain and San Fernando is expected to benefit from resumed business confidence now that political clarity has arrived. The new government’s focus on anti-corruption and transparency may slow government property auctions and divestments in early June, but by mid-June, investors expect the Persad-Bissessar administration to move forward with major capital projects and property transactions that Manning’s lame-duck period had deferred.

Hurricane Season: Early Caution, Property Risk Monitoring

The Atlantic hurricane season opened June 1, 2010, and early meteorological forecasts from the National Hurricane Center and international agencies predict an active season with above-average storm activity. Climate patterns, including warmer-than-normal Atlantic waters and favourable upper-level wind conditions, support early forecasts of 14-18 named storms, with 7-10 hurricanes and 3-4 major hurricanes expected through November 30. Caribbean property and tourism investors are now entering six months of seasonal risk monitoring. For insurance purposes, property owners are recalibrating hurricane deductibles and coverage; development financing is beginning to price higher hurricane risk premiums. The June-October peak season is when most Atlantic hurricanes form and track toward the Caribbean. Investors are closely monitoring early-season storm tracks to assess whether the 2010 hurricane season proves as active as forecasts suggest. Early June typically sees initial tropical activity; any significant storms tracking into the Caribbean would immediately impact real estate valuations and development timelines.

Jamaica, Dominican Republic, and Barbados: Summer 2010 Property Outlook

Jamaica’s property market enters summer 2010 with continued momentum from IMF programme credibility and currency stability. The North Coast tourism and residential segments are showing strong inquiry and deal activity; early June bookings suggest tourism perception risk from the BP spill has been largely absorbed, with summer 2010 reservation levels tracking close to year-ago. Kingston commercial real estate continues to post steady leasing and sales activity. The Dominican Republic is experiencing perhaps the strongest Caribbean property market in June 2010, with Punta Cana resort developers reporting record hotel booking pipelines and residential property sales volumes. FDI commitments from international hospitality operators and European residential investors remain elevated. The DR’s geographic positioning relative to typical hurricane tracks, and its economic diversification, are supporting investor confidence despite hurricane season opening. Barbados, with tighter fiscal constraints but steady tourism recovery, is showing resilience; property valuations are stabilising, and financial services real estate in Bridgetown remains active. All three major Caribbean markets are entering summer 2010 with intact recovery momentum, supported by global accommodative monetary policy and emerging market capital seeking higher yields.

BP Oil Spill: Ongoing and Expected July Resolution

As of June 3, 2010, the BP Deepwater Horizon wellhead continues to gush crude oil into the Gulf of Mexico, with no end in sight yet. The estimated daily spill rate remains around 53,000+ barrels per day, and oil accumulation in the Gulf has become visible on satellite imagery and reports. However, Caribbean waters remain uncontaminated, and Caribbean tourism perception risk appears to be declining as summer 2010 approaches. Tourism boards across the Caribbean have successfully marketed the message that Caribbean beaches are unaffected, and summer bookings are tracking near year-ago levels. For property investors, the BP spill’s Caribbean impact has effectively priced into sentiment and expectations; further downside to tourism bookings appears limited unless unforeseen circumstances (e.g., well rupture, major current shift) dramatically alter physical exposure. International media attention on the spill will persist through June and July, but property markets are treating it as a Gulf Coast and operator-liability issue rather than a Caribbean real estate fundamental disruptor.

Caribbean Leaders This Month

Prime Minister Kamla Persad-Bissessar, Trinidad and Tobago: New PM takes office following historic election victory; coalition government enters June with mandate to reform fiscal priorities while maintaining energy sector investment; Persad-Bissessar’s leadership brings first female PM to Caribbean and signals political realignment across region.

Prime Minister Bruce Golding, Jamaica: Continues to manage Jamaica’s IMF Standby Arrangement with strong June performance on fiscal compliance; Jamaica’s property market momentum and North Coast tourism recovery remain robust entering summer 2010.

President Leonel Fernández, Dominican Republic: Presides over strongest Caribbean economy in June 2010; DR’s FDI inflows and property market performance continue to lead region; hurricane season opening does not dampen Punta Cana development pipeline or residential investor activity.

National Hurricane Center & Meteorological Agencies: Issue active 2010 Atlantic hurricane season forecast; early-June monitoring and tracking begins; seasonal risk assessment critical for Caribbean property insurance and development financing through November.

International Hotel & Tourism Operators: June 2010 marks peak summer booking season for Caribbean resorts; BP spill perception risk has largely cleared; Marriott, Hilton, Sandals, and others report sustained guest reservations and development commitments across Caribbean islands.

Caribbean Development Bankers & Finance Professionals: June 2010 shows renewed commercial real estate lending activity in Jamaica, DR, and T&T; Persad-Bissessar government clarity in Trinidad supports resumed financing commitments; IMF support for Jamaica underpins credit availability across region.

Caribbean Property Market Participants: June 2010 represents transition from spring recovery narrative to summer opportunity focus; external shocks (BP spill, hurricane season) have not materially derailed property valuations or investment flows; investors are entering peak summer buying season with confidence in underlying Caribbean market recovery.

Looking Ahead

July 2010 brings expected resolution to the BP oil spill (current projections call for well capping by July 15 or sooner), which will clear final perception clouds hanging over Caribbean tourism and property perception. T&T’s new Persad-Bissessar government will announce detailed fiscal and energy policy priorities by July; property and investment community will recalibrate T&T commitments based on coalition policy specifics. Hurricane season will enter its most active phase (July through September); investors will be closely monitoring storm tracks and any major landfalls affecting the Caribbean. Jamaica’s IMF programme will demonstrate sustained compliance through Q2 2010 reporting (expected July); continued fiscal discipline validation should support North Coast property appreciation and North American buyer activity through late summer.

The broader Caribbean property market outlook for mid-summer 2010 is constructive: global monetary conditions remain accommodative, emerging market capital flows are strong, commodity prices (energy) are supportive of Caribbean revenues, and political clarity has been restored in Trinidad and Tobago. The main downside risks are hurricane activity that affects major Caribbean tourism and real estate hubs, or a global equity market shock that reverses emerging market capital flows. Current consensus is that Caribbean property valuations are entering a sustainable appreciation phase that will persist through Q3 2010, supported by fundamentals and policy clarity.

June 2010 marks a turning point in Caribbean property recovery. The external shocks of Q1-Q2 2010 (Haiti earthquake January, BP spill April-June, T&T election uncertainty through May) have been largely absorbed or resolved. Investors entering June are positioning for sustained summer 2010 activity, supported by intact recovery narratives, policy clarity in major Caribbean nations, and global macro support. The test of this optimism will be whether Caribbean property transactions and valuations remain stable if hurricane season proves active or if global markets face unexpected disruptions.