Marina View St. Kitts, Southeast Peninsula, BWI (the “Secret Caribbean”)

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Copyright © 2006, Paradise Properties, unless otherwise noted.

Paradise Properties

Marina ViewSt. Kitts, Southeast Peninsula, BWI

(the “Secret Caribbean”)

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Executive Summary

• St. Kitts, an exotic and nearly unknown island in the Caribbean, is just at the beginning of a major expansion of its tourist market. Real estate prices have climbed quickly in the past five years. The Government of St. Kitts offers an exceptional incentive package, including duty-free imports and extended tax holidays. The offered property has beautiful views, is ideally located, and will border the new, luxury Auberge Resorts project, overlooking its marina.

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Table of Contents• Executive Summary………………………….2• St. Kitts – Overview…………………...……..4• Tourist Market……………………………......8• Tourist Infrastructure………………………..15• Real Estate Market…………………...……..18• Competitive Environment…………………..26• Investment Characteristics………………….28• The Marina View Property….……………....34• Property Views……………………………...41• Asking Price………………………………...49• Contact……………………………………...50

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St. Kitts - Overview

St. Kitts - Overview

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What is St. Kitts?• An undeveloped Caribbean paradise with no tourist market

until five years ago.• A country with only one major hotel (several more are

planned)..• A stable Parliamentary democracy – the court of last resort

is Privy Council in London, UK.

• Dedicated to transitioning its economy to tourism• 65 square miles, with a population of 39,000.• Still inexpensive.• Not a single traffic light in sight.

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St. Kitts is optimally located.

- 2.5 hours from Miami, 3.5 hours from New York, 4.5 hours from Toronto, 9 hours from London

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St. Kitts and Nevis is shaped like a cricket ball and bat.

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Tourist Market

Tourist Market

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The number of tourists has increased sharply.

Visitors to St. Kitts - Growth in Number

0

100,000

200,000

300,000

400,000

500,000

600,000

2002 2003 2004 2005 2006(est.)

# of

Vis

itors

Total Visitors

Overnight

Cruise Ship

Source: St. Kitts Ministry of TourismOvernight CAGR: 18.5%Total CAGR: 24%

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Tourist growth rates have rebounded since early

weakness.

Sources: St. Kitts Ministry of Tourism, www.onecaribbean.org

Visitors to St. Kitts - Growth Rate

-40%

-20%

0%

20%

40%

60%

80%

2002 2003 2004 2005 2006(est.)

Growth (%)

Growth Rate(total)Growth Rate(overnight)

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Overnight Visitors to St. Kitts - Country of Origin

USA63%

Caribbean 17%

Canada8%

UK7%

Other / Not Stated

3%

Other Europe2%

Overnight visitors come mostly from the USA.

Source: St. Kitts Ministry of Tourism

Note: this is expected to change as the Auberge, Mandarin Oriental, and Ritz-Carlton will attract a more international clientele.

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There is demand for lengthy stays in hotels and residences .

Hotels vs. Private Accommodations

45% stay in private

residences, and stay for an average of 12.5 days

55% stay in hotels, and stay for an

average of 7 days

Source: St. Kitts Ministry of Tourism

Note: the average tourist spends US$104 per day (tourists staying in private residences spend an average of $36/day; tourists staying in hotels spend an average of US$161 per day).

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Tourism is a centrally important segment of the economy.

Tourism Revenues as a % of GDP (Purchasing Power Parity)

0%

5%

10%

15%

20%

25%

30%

35%

2001 2002 2003 2004 2005 2006(est.)

Source: Caribbean Development Bank

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The tourism industry is young and enjoys governmental

support.• “St. Kitts is currently a popular destination for those seeking to

establish a business foothold in an accelerating economy. All sectors of business are needed: retail, restaurants, marina/diving services, general business services, light manufacturing, medical services, construction, and quality hospitality management services.” www.resortconsultants.com

• The government has sponsored booths at major trade shows in New York and London

• “Our goal is to build a tourism industry that won't suffer too badly from economic and political shocks” – Ricky Skerritt, Minister of Tourism, Sports and Culture 02/10/05, The Globe and Mail

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Tourist Infrastructure

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The airport has been expanded for the 2006/07 season.

Major Improvements- Additional runway to accommodate six 767-300s- Night landing facilities- New capacity: 400 passengers/hour

Scheduled Service• American Airlines (Miami) • American Eagle (San Juan) • US Airways (Philadelphia, Charlotte, Richmond - seasonal) • Skyservice (Toronto - seasonal) • Excel Airways (London-Gatwick) • Multiple carriers throughout the Caribbean

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The port has been transformed into a world-class facility.

• The port has recently been refurbished.• One of only two ports in the Caribbean that can

accommodate the largest cruise ships in the world. • New features include a high-end duty-free shopping plaza &

casino • Handles ships with a maximum draught of up to 30 feet; port has a 400-foot sheet pile marginal wharf, roll-on-roll-off facility, transit sheds, high mast light, a moving buoy to facilitate berthing vessels between 400 and 750 feet long, and a 75-boat marina

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Real Estate Market

Real Estate Market

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The real estate market is still in an emergent phase.

• Demand far outstrips supply, especially in US$200,000-$500,000 market.

• No luxury inventory to speak of, but changing rapidly.

• Land is still relatively inexpensive.

• Few transactions = no standardized pricing.

• Economic citizenship has driven investment.

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The most attractive area for development

is the Southeast Peninsula (SEP)…

…which is still waiting for its first hotel.

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However, several large developments on the SEP have

recently been announced.• Auberge Resorts - www.stkittspeninsula.com

– Two hotels (Auberge and Mandarin Oriental), multi-unit and villa residences, marina, Rees Jones Designed Golf Course

• Estates on Sundance Ridge - www.sundanceridgestkitts.com – Villas, starring at US$2.2 million

• Heritage Plantations– Villas, starting at US$3 million

• Marine World St. Kitts- Family destination centre

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Auberge

Rees Jones designed golf course

Hotel (Mandarin Oriental?)

Marina

Marine World

Sundance Ridge(US$2.2MM+ residences)

The largest development is scheduled

to open in 2008.

Heritage Plantations (US$3MM+ residences)

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The price of undeveloped land on the SEP has appreciated

significantly.Average Raw Land Prices on the Southeast

Peninsula

0

2

4

6

8

10

12

14

2002 2003 2004 2005 2006

US$/

Sq. F

t.

Source: Author’s conversations with local realtors.CAGR: 16.4%

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Developers have also started projects on other parts of the

island.• Ritz-Carlton – As yet unannounced, but confirmed

• Rawlins Plantation Inn - www.rawlinsplantation.com– Expansion of existing hotel, addition of spa, villas

• Ocean’s Edge Resort - http://www.newfoundproperty.com/oceans-edge.asp– 124 apartments, 48 townhouses, 23 villas

• Marriott St. Kitts Beach Club – www.marriott-stkitts.com– 88 villas, renting from US$16,400-$69,500 per week

• Kittitian Heights Resort - www.kittitianheights.com– Hotel, retail area, multi-unit residences, villas, golf course designed by Ian

Woosnan, recording studio, racetrack, spa

• La Vallée Golf Course and Development – Links-style golf course designed by Charles Howard, hotel, villas, marina, sports complex

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New development is concentrated in two areas, one bordering the

SEPRawlins

Ocean’s Edge

La Vallée

Kittitian Heights

Royal St. Kitts Golf Course (recently refurbished by Tom McBroom)

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Competitive Environment

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The Marriott Resort and Royal Beach Casino currently operates in

a competition-free environment

- The only major resort on the island.- The largest casino in the Eastern Caribbean- The Marriott has done exceptionally well and has recently announced an addition of 88 2 & 3 bedroom villas, renting for US$16,400-$69,500 per week.

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Investment Characteristics

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There is a very attractive incentive package for

developers.

Source: Office of the Deputy Prime Minister

Standard Incentives:- 15 year corporate tax holiday, with subsequent graduated rates- Total exemption on import duties on parts, raw materials, and machinery- Total exemption on hotel furnishings and equipment- Repatriation of profits & capital- Casino license if 200 rooms are built- No alien landholding license (ordinarily 10% of property value)

Negotiated Incentives:- Total exemption on all supplies, including food, liquor, goods for resale- Expanded tax exemptions- Use your imagination…the government is highly motivated to attract investment

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Labour is inexpensive, and the literacy rate is 98%.

Construction WagesMason: US$2.78 - $4.44/hr.Carpenter: US$2.60 - $4.44/hr.Painter: US$2.22 - $3.33/hr.Electrician: US$2.78 - $4.44/hr.Plumber: US$2.69 - $4.44/hr.

Hotel Employee Wages Entry Level: US$1.40/hr.Semi-Skilled: US$1.85/hr.Casino Workers: US$1.40/hr.Security Guards: US$2.22/hr.

Other TermsOvertime: 1.5x for work in excess of 40 hours/wk.14 days paid vacation after one year of serviceSocial Security: 5% Social Services: 5%Worker’s Injury Benefit: 1%Severance Fund: 1%

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St. Kitts is tax-advantaged for employees and investors.

• No capital gains tax if assets are held for one year.

• No personal income tax.

• Strong bank secrecy laws (Confidential Relationship Act, 1985, mandates prison time for disclosure of financial information to foreign governments).

• No net worth tax, gift tax, sales tax, turnover tax, or estate duty.

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Economic citizenship is a powerful draw for investors.

• Upon purchasing real estate with a value equal to or greater than US$250,000, the buyer and his or her family are eligible for citizenship.

• The St. Kitts and Nevis economic citizenship programme is the oldest of its kind, and internationally respected.

• A fee of $35,000 per adult ($15,000 per child) is required in addition to the real estate investment.

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Construction costs are competitive.

• Around $120 per sq. ft. for a single-floor structure

• Less for multi-floor structures

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The Marina View Property

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Driving on the Southeast Peninsula…

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...Look left, the Atlantic Ocean…

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…Look right, the Caribbean Sea.

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Marina View is in a great location on the island...

Marina View

- 15 minutes from the airport

- Overlooking the Great Salt Pond, future site of the Auberge Resort Marina

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Auberge

Rees Jones designed golf course

Hotel (Mandarin Oriental?)

Marina

Marine World

Sundance Ridge(US$2.2MM+ residences)

…and will soon be surrounded by high-end development.

Heritage Plantations (US$3MM+ residences)

Marina View

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Sloped terrain provides for striking views from the entire

parcel.

Marina View

Marina entranceParadise Properties

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Property Views

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Southwest view just after sunset.

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Southern view from property - future marina site.

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Current view of marina entrance

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North vista from Marina View.

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The natural, rugged beauty of the SEP.

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Infrastructure & Zoning

• Water and electrical are nearby and readily available.

• The developer will have to put in septic and/or sewage treatment.

• There are no zoning regulations.

• Environmental regulations are very lax.

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Seller has ability to assist.

• The seller is extremely well-connected politically and in the local business community.

• The seller can provide assistance on a variety of traditional and non-traditional issues.

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US $1,050,000

or, US $210,000 per acre

or, US $4.82 per square foot

Asking Price

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Contact

Noah Billick (869) 764-7458 or (514) 667-2039

[email protected]

David Kawaja (869) 762-6459 or (869) 466-6822

[email protected]

RE/MAX Paradise Properties

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Marina View St. Kitts, Southeast Peninsula, BWI (the “Secret Caribbean”)