The Balmoral’s principal yesterday said he anticipated earning $65-$70 million in total sales revenues from his new luxury condominium project, having sold 28 per cent of available units prior to its launch.
Jason Kinsale told Tribune Business that he expected to have sold 30 of One Cable Beach’s 75 total units by this weekend, hitting his pre-sales target some four months before the projected construction groundbreaking.
Speaking ahead of last night’s official launch for his latest $45 million real estate development, told Tribune Business that the demand - especially from overseas buyers willing to spend up to $1.6 million - had been “pretty incredible to witness”.
Some 17 of the 21 initial buyers, or 81 per cent, were foreign, and Mr Kinsale told this newspaper he wanted to see more local purchasers step forward.
“To be completely honest, I want to see Bahamians in here,” he told Tribune Business. “From my experience, Bahamians are a bit slower to act and foreigners come in with the ability to make decisions quickly.
“There’s really nothing I hate more than Bahamians saying foreigners are taking over our land. We have exactly the same opportunities they do, and we don’t act. It’s amazing. I pass by Baha Mar every day. It’s real, it’s happening.”
Expressing hope that One Cable Beach could act as “a catalyst” for further real estate development projects, especially given Baha Mar’s imminent opening, Mr Kinsale said last night also marked the official launch of his development firm, Aristo Development Company.
He added that it was impossible as a developer to “wait for a solution” to the ongoing Value-Added Tax (VAT) and fiscal reform debate, pointing out that overseas buyers were unlikely to be deterred by it.
Acknowledging that the plans for One Cable Beach had been modified slightly since the project’s announcement, with total construction investment rising from $30 million to $45 million, Mr Kinsale said there had been “incredible buying prior to launch”.
“In the last two weeks we have sold 21 units without even launching, through my own personal contacts and just off my iphone,” he told Tribune Business.
“I anticipate this [last] evening having a strong response, and over the next few weeks we should continue the momentum. I think by this weekend we’ll be one-third of the way.
“Look around; there’s nothing else in the west. We have affordable prices, $595,000 for a two-bedroom and $495,000 to get a one-bedroom, and to get into something brand new for that price is really uncommon.”
Mr Kinsale said early sales had been driven by foreign buyers attracted to One Cable Beach’s location, which is across West Bay Street from the Prime Minister’s residence and just 600 feet west of the Baha Mar development.
With the $2.6 billion project in walking distance for One Cable Beach residents, another attraction is its beachfront characteristics.
“I didn’t realise how important beachfront was,” Mr Kinsale said. “We had someone who bought a unit this morning for $646,000, which is 1,200 square feet, and we have a 3,000 square foot penthouse that is available at Balmoral.
“They chose this, which is one-third of that size, just to be on the beach and near Baha Mar. It’s really my first beachfront project. Before, I didn’t realise how important this is to a lot of people, but now I understand. It’s really opened my eyes.
“The design is unique to the Bahamas, and that’s what’s driving sales. It’s a real departure from what we’ve seen with traditional Bahamian architecture. It has a lot of curves and modern design, and feels like it’s in South Beach in Miami - modern, progressive and real boutiquey stuff.”
Pre-sales have included units purchased for $1.3 million and $1.6 million, and Mr Kinsale told Tribune Business: “It’s surprising to see how much money is out there, and the person who bought for $1.6 million did it like it was $100,000. It was pretty incredible to witness.”
Mr Kinsale said Aristo Development Company, which is owned by himself and the same partners who invested in Balmoral, would act as the project development firm for all their real estate ventures going forward.
He added that groundbreaking on One Cable Beach was scheduled for August 2014, with all necessary permits having been granted ‘in principle’, and construction completion on the eight-storey high rise targeted for the 2016 first quarter.
Projecting that total sales revenues will “be in the range of $65-$70 million”, Mr Kinsale said 30 unit pre-sales would leave the developers “in excellent shape”.
“Emphasising that he was “not worried at all” about reaching that target, he told this newspaper: “We’ll be having a price increase in the next two weeks.
“Once we hit our pre-sales level we can say we have met the target and be more relaxed. If you come in early as a buyer, you get rewarded.”
Estimating that One Cable Beach would create between 150-200 jobs at the construction peak, Mr Kinsale said: “Hopefully we can be a catalyst for other developers to take action and get this economy going.
“Real estate is one of the drivers for the economy. We need this project to happen. I just hope other people come as well.”
A key unknown facing Bahamas-based real estate developers, and all businesses, is how they will be treated under the proposed VAT legislation and regulations.
Currently, with sales of residential real estate treated as VAT ‘exempt’, meaning the tax will not be added to the purchase price, developers will be unable to reclaim the ‘input’ VAT they pay on contractor bills.
This threatens to significantly increase real estate development costs, but Mr Kinsale said he could not afford to sit around worrying about uncertainties.
“Our foreign buyers don’t care about VAT,” he told Tribune Business. “They’re sitting in London, New York and Toronto, already paying 30-50 per cent income tax and freezing cold.
“As a developer, I have to have confidence in the Government to come up with a solution to allow us to move forward. I can’t wait for something to happen. Baha Mar is not waiting.”