Caribbean Property & Investment Review — 2011 Investment Opening, Haiti One Year On, T&T Energy & Carnival Approaching

Publication Date: 3 February 2011  |  Coverage Period: 3 January–2 February 2011

Morning Briefing

• Haiti earthquake anniversary: January 12 marked one year since the catastrophic earthquake; international attention refocuses on the pace of reconstruction and the property title resolution backlog.
• T&T energy economy robust: Oil hovering around $90 per barrel sustains Trinidad & Tobago’s fiscal position; PM Persad-Bissessar announces new housing and infrastructure allocations.
• Jamaica IMF targets: PM Bruce Golding’s government confirms it remains on track with Extended Fund Facility benchmarks; tax reform consultations open with business sector.
• DR tourism milestone: President Fernández reports record January visitor arrivals, driven by North American winter-sun demand and competitive all-inclusive pricing.
• Carnival countdown: Trinidad Carnival falls on March 7–8 this year; hotel bookings across Port of Spain and the Carnival corridor are reported at near-capacity levels.
• Barbados steady: PM Freundel Stuart’s first full budget cycle delivers modest stimulus without breaching fiscal guidelines; Platinum Coast villa inquiries strengthening.

Haiti: The Reconstruction Story One Year On

The first anniversary of the January 12, 2010 earthquake passed this month with a mixture of solemn reflection and urgent stocktaking. Official estimates now place the death toll at more than 220,000, with some independent assessments ranging considerably higher. The physical reconstruction challenge is staggering: the Inter-American Development Bank’s damage assessment found that Haiti lost an estimated $7.8 billion in assets — a sum equivalent to more than 120% of the country’s pre-earthquake GDP. Against that backdrop, the $13 billion pledged by international donors at the March 2010 New York conference represents a resource base of considerable potential, but disbursement mechanisms and land-tenure complications have conspired to slow the pace of transformation.

For investors monitoring Haiti, the most consequential development in the coverage period has been progress on the Caracol Industrial Park project in the north of the country. This large-scale industrial zone, developed with US and Inter-American Development Bank support, is designed to attract garment and light manufacturing employers and thereby create the wage-earning workforce that could sustain demand for affordable housing, retail and services. The northern development corridor has the further advantage of lower earthquake risk than the capital region, making it an area of genuine medium-term commercial interest for patient investors willing to work within Haiti’s challenging regulatory environment.

Property title resolution remains the single most significant structural barrier to investment. An estimated 60–70% of pre-earthquake land parcels in Port-au-Prince lacked formal title documentation, and the destruction of registry records in the earthquake compounded the problem enormously. USAID and the World Bank are supporting cadastral reconstruction efforts, but the process is expected to span several years. Investors considering Haiti exposure are strongly advised to engage specialist legal counsel with experience in Haitian property law before committing resources.

T&T: Energy Economy and the Construction Boom

Trinidad & Tobago’s economy continues to benefit from strong hydrocarbon prices, with crude oil trading in the $85–$95 range through January. The Persad-Bissessar government’s first full budget, delivered in late 2010, committed substantial spending to social housing, road infrastructure and the expansion of the University of Trinidad & Tobago campus network. These investments have a direct and measurable impact on the construction sector, which reported firm order books into the first quarter of 2011. Cement imports at Port of Spain reflect the activity: volumes are running approximately 12% ahead of the same period in 2010.

The commercial property market in Port of Spain has absorbed a wave of new office supply completed in 2009–2010, and rental rates have stabilised after a period of mild softening. Prime retail space in the Capital Plaza and Long Circular Mall corridors remains fully let, with international brands maintaining interest in the T&T market as the wealthiest per-capita economy in the English-speaking Caribbean. For residential investors, the Diego Martin and Santa Cruz corridors are attracting buyers seeking proximity to Port of Spain amenities while avoiding inner-city land costs.

Jamaica: Fiscal Reform and the Investment Climate

Prime Minister Bruce Golding’s administration opened 2011 with a renewed push on fiscal consolidation, the cornerstone of Jamaica’s engagement with the International Monetary Fund. The Extended Fund Facility arrangement, signed in 2010, requires the government to hold the primary fiscal surplus at a level sufficient to begin reducing Jamaica’s debt-to-GDP ratio — one of the highest in the world at approximately 130%. The discipline this imposes constrains public spending and has a knock-on effect on sentiment in the construction sector, where government contract awards have been tighter than in previous years.

Tourism remains Jamaica’s most resilient economic pillar. Montego Bay and Ocho Rios resorts are reporting solid forward bookings for the winter-spring season, and the Jamaica Tourist Board’s campaign targeting the UK and North American markets appears to be yielding results. For property investors, the most active market segments are resort-adjacent villas in the Montego Bay corridor and upscale residential developments in the New Kingston and Cherry Gardens areas serving the professional and diplomatic community.

Carnival Season: The Economic Case

With Trinidad Carnival set for March 7–8, the economic machinery of the festival is already in motion. Hotel occupancy across Port of Spain and the western corridor is approaching capacity, and airline seat availability on Caribbean routes through early March is tightening noticeably. The economic multiplier of Carnival — covering mas camp expenditure, costume production, catering, entertainment, ground transport and short-term accommodation rentals — is estimated by the T&T Chamber of Industry and Commerce to contribute in excess of TT$1 billion to the national economy in the weeks surrounding the festival. For property investors, Carnival has an underappreciated impact on the short-term rental market, with premium apartments in Woodbrook and St Clair commanding nightly rates three to five times their off-season levels during the peak Carnival weekend.

Caribbean Leaders This Month

Jamaica — PM Bruce Golding (JLP): Golding opens 2011 with fiscal consolidation firmly on the agenda, balancing IMF commitments against the social spending pressures that accompany high unemployment. The property market watches the tax reform process carefully for any changes to stamp duty or transfer tax.

Trinidad & Tobago — PM Kamla Persad-Bissessar (PP): Strong oil revenues give Persad-Bissessar unusual fiscal flexibility by regional standards. Her government’s housing programme is boosting construction sector employment and providing indirect support to land values across the residential belt.

Barbados — PM Freundel Stuart (DLP): Stuart maintains the cautious, investment-grade posture that has been Barbados’s hallmark. The Platinum Coast luxury market is his most important foreign exchange earner, and his government is attentive to any regulatory changes that might affect high-end buyer sentiment.

Dominican Republic — President Leonel Fernández (PLD): Record January arrivals validate Fernández’s sustained infrastructure push. The north coast from Puerto Plata to Cabañete is the development frontier, with new hotel and residential projects advancing.

Haiti — President René Préval: Préval’s administration marks the earthquake anniversary with pledges of accelerated reconstruction, though his term ends in February 2011, creating a period of political transition that adds uncertainty for investors.

St Kitts & Nevis — PM Denzil Douglas (SKN-LP): Douglas’s government is actively marketing the Citizenship by Investment programme, which continues to attract interest from Middle Eastern, Chinese and Eastern European applicants seeking Caribbean nationality and its attendant visa-free travel benefits.

Cayman Islands — Premier McKeeva Bush: Bush is shepherding a revised financial services regulatory framework through the Legislative Assembly, aimed at reinforcing Cayman’s position as the region’s premier offshore investment hub in the face of increased international scrutiny.

Overall performer this month: Trinidad & Tobago again leads the regional performance table, combining strong fiscal fundamentals with active construction and the approaching economic boost of Carnival season.

Looking Ahead

The next edition will publish just four days before Trinidad Carnival, and the mood across the twin-island republic is already celebratory. Beyond Carnival, the region’s attention will be on how elevated global oil prices — driven partly by unrest across North Africa and the Middle East — affect both T&T revenues and the import cost of petroleum products in oil-importing islands such as Jamaica and Barbados.

Jamaica’s IMF programme review, expected in the first quarter, will be a significant market signal. A clean bill of health from the Fund would reinforce investor confidence and could catalyse activity in both the commercial and residential property sectors as credit conditions ease marginally.

For Haiti watchers, the presidential election process — following the disputed first-round results of late 2010 — is expected to resolve in the coming weeks, potentially providing the political clarity that international investors and development financiers need before committing to larger reconstruction projects.

The Caribbean Property & Investment Review is published on the first business day of each month. Edition 186 covers the period 3 January to 2 February 2011. All market data reflects conditions as at close of the coverage period. This publication is for informational purposes only and does not constitute investment advice.

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