At a time when so much real estate news is bad, tourism officials in the Dominican Republic are having good things to talk about.

This summer, then-tourism minister Felix Jimenez announced a billion-dollar government infrastructure investment that includes a new cruise ship marina and road upgrades for his island nation. Then, last month, his successor, Francisco Javier García, announced that private investors have begun an additional $9 billion in developments.

The announcements included especially good news for visitors headed to the hot spot of Punta Cana, a peninsula on the easternmost coast of the Dominican Republic that has long been the home of all-inclusive resorts and, more recently, several large residential developments.

An international airport already serves the area, but the new infrastructure investment will add high-speed ferry service between Punta Cana and Samaná, another popular tourism peninsula on the northeast coast. It also will build a new highway that will reduce travel time to the capital of Santo Domingo from four hours to about an hour and a half. Both projects are scheduled for completion before 2012.

Punta Cana’s main attraction is more than 20 miles of powdery white beaches. About 30 beach resorts, casinos and second-home options occupy this stretch. Several of the larger residential developments, including Roco Ki and the Punta Cana Resort & Club, offer complimentary mini-vacations for prospective buyers.

Housing prices in the upscale developments generally begin in the $400,000-$600,000 range and go upward into the millions. For buyers willing to look outside those developments and forgo resort-style amenities, prices can be much lower. Three-bedroom houses start at $250,000. One-bedroom condos begin at under $120,000, and many one- and two-bedroom condos are in the $150,000-$200,000 range.

Affordability, however, is not the Dominican Republic’s sole appeal. For second-home buyers, the nation also offers a stable democratic government, ease of doing business in a region otherwise infamous for red tape, easy air access, a vibrant community of other foreign home buyers and a top-notch portfolio of golf courses with layouts by the likes of Tom Fazio, Jack Nicklaus, Pete Dye and Nick Faldo.

A look at three Punta Cana neighborhoods:

•Cap Cana. This huge development (capcana.com) spans 29,000 acres and includes nearly 3½ miles of beach. The master plan calls for 5,000 residences, as well as hotels, golf courses, shops and restaurants, some of which are already open. There are 26 residential communities now, ranging from six to 474 units. Home sites begin in the $400,000 range, bungalows start at $480,000, and single-family houses start at $895,000.

•Punta Cana Resort & Club. The latest phase of this upscale resort (puntacana.com), built on a stretch of beach and around a golf course, is The Estate, which encompasses three enclaves of single-family houses. Lots in the Arrecife and Hacienda enclaves start at $450,000, and the gated Corales enclave commands $1.8 million and up. The Estates are being co-developed by singer Julio Iglesias and designer Oscar de la Renta, both of whom have built homes in Corales.

•Roco Ki. This new development includes more than 3 miles of beaches and coastal cliffs, atop which sits a Nick Faldo golf course. For housing, choose from several residential communities and two resort hotels: the Westin and the Fairmont. The Fairmont, expected to be ready in 2010, will offer fractional ownership in a residence club. The Westin, scheduled for next spring, already is selling options that include high-rise condos, single-family houses and bungalows. Prices range from $475,000 for a condo to $2.75 million for a beachfront home.

Source: http://www.usatoday.com

Popularity: 42% [?]

Property outlook is great and real estate tourism is booming in the Dominican Republic, says the forecast from the Dominican Association of Real Estate Tourism Companies (ADETI).

U.S. $1.5 billion is invested in real estate property developments in Dominican Republic, says the ADETI President, Juan Bancalari. The real estate tourism prospective is even more upbeat considering the fact that it is expected to attract US$3.0 billion per year within three years.

Marinas, beaches and golf courses are the leading factors that make  real estate tourism and investment in the Dominican Republic so attractive. However, the country has competitors such as the wonderful beaches of Mexico and Central America. For this reason Bancalari, the president of Dominican Association of Real Estate Tourism Companies, says that the country needs to project an image of security for real estate and other types of investments to develop tourism and properties for European and American holiday vacationers.

It seems that the projection of a secure investment environment is working. As real estate development is experiencing a slump in Florida, a local engineering company is looking not only outside of the box, but also outside of the U.S. borders. “Bonita Springs-based Stafford Engineering will open the doors of a new office in downtown Santo Domingo, the capital of the Dominican Republic, on Tuesday and begin offering architectural, engineering, real estate, construction management and business relocation services in the Caribbean Island country.” – reports Naplesnews.com in its July 31, 2007 issue.

The newspaper says that “Other Southwest Florida businesses also are moving into Caribbean markets, Garcia added: Cape Coral-based Bellagio Homes and SJR Development are developing a residential community in the Dominican Republic, and The Jack Parker Corp., a Fort Myers-based real estate development company, is building a mixed-use community in Costa Rica.”

There is a change in tourism and holiday vacationers’ trends. According to Frank Rainieri, the vice president of ADETI, tourism is changing toward real estate tourism. “Before hotels were simply pure hotels. All the large chains of the world (…) are already entering the tourism real estate component. I believe that that already creates the new dynamics of investment in the tourism sector.” - Dominicantoday.com.

Tourism, and particularly real estate property tourism, has been among the top five currency generating factors for Dominican Republic. It was this type of tourism that created the boom in the coastal areas of Southern Spain in 1970s and 1980s, which used to be Spain’s most economically depressed areas. Today, due to the real estate tourism and boom in properties, these have become some of Spain’s most developed and attractive areas. The Dominican Republic intends to do just the same by attracting more real estate tourism and emphasising  that investing in the Dominican Republic’s real estate and property market is safe and secure.

Source: http://www.westindies-realestate.com

Popularity: 27% [?]

The Dominican Republic is quite possibly the perfect embodiment of a Caribbean paradise nation – with its palm-fringed, white sandy beaches which are lapped by warm azure seas and caressed by almost endless summer days, this holiday hotspot is booming on the back of intelligent government policy designed to maintain macroeconomic balance and enable and encourage investment.

The government and private sector are united in nurturing the tourism and real estate industries in the Dominican Republic as these are fundamental drivers of the overall economy, which is why the destination is becoming a more and more enticing place for a holiday or even a holiday home investment. With consistent effort and policy planning in place to promote the delights and undeniable appeal of the nation, combined with significant investment into everything from road infrastructure to the enhancement of amenities and facilities for lifestyle tourism, the overall attraction of the Dominican Republic is improving annually.

This level of sustained and focused investment has already led to a significant rise in tourism numbers and it is also supporting far greater investment interest in the Dominican Republic’s affordable yet high-end property market. According to the nation’s Tourism Minister there has been an 8% increase in tourism arrivals in 2008 already, this is backed up by statistics from the Central Bank released earlier this year suggesting that in the first four months of 2008 alone, 1.6 million visitors arrived to soak up the Dom Rep’s stunning sunshine, an increase of almost 6% year on year from 2007.

To further enhance the appeal of the nation, its accessibility and economic success, Tourism Minister Felix Jimenez has just announced the details of the Dominican Republic’s 2008 - 2012 Tourism Plan. The plan is an outline for investment and it is designed to enable an increase in international arrivals of around 170,000 visitors per year, generating 200 million dollars in annual revenue and reaching 5 million annual arrivals by 2012. Supporting this plan is significant dual investment into increasing hotel bed capacity and also increasing the amount of residential resort style real estate in the Dominican Republic. The World Travel and Tourism Council predicts that this period of intensive advancement in tourism will result in at least a 3.7% annual increase in real GDP growth for the nation’s travel and tourism economy over the next decade.

According to Steve Worboys, MD of Experience International, the overseas property investment experts: “for those seeking the ultimate property investment opportunity now could be the perfect time to invest into the undeniable potential that the Dominican Republic represents. Not only is the nation affordable and committed to maintaining its accessible status as one of the most reasonably priced Caribbean destinations, but millions of dollars of investment are going into everything from golf courses to marinas, from boutique style shopping malls to spas and sports facilities. Already ‘the Caribbean’s Number One Destination’ according to the World Tourism Organization, the Dominican Republic could soon be the number one destination for luxurious yet affordable resort style real estate offering exceptional rental yields in the region too.”

The increase in demand for properties for rent from the growing tourism base is allowing developers of the best resorts in the nation to offer fantastic rental guarantees to would-be purchasers, and to even offer these rental guarantees on top of allowing owners access to their properties for their own Caribbean paradise vacation. One such development, Swaying Palms, offers investors 7% annual rental guarantees, and currently the gated and private luxurious community of apartments and penthouses is for sale at 30% below market value with 20% capital growth per annum predicted and overall the ‘Projected Capital Growth’ for the next 5 years is 220%. The properties are within a resort offering the best range of high-grade amenity - from tennis clubs to beach clubs and with owners benefitting from membership facilities to 5 of the areas top golf courses including the new Jack Nicklaus course at Cap Cana for example. Properties are available for sale with 50% mortgages from just $140,000.
Source: www.easier.com

Popularity: 24% [?]

Dominican Republic - Project Fever - A Huge Number Of Construction Projects Are Under Way As The Dominican Republic Focuses On Improving Its Infrastructure Across The Board.

Source: The Banker

The Dominican Republic is undergoing a dramatic makeover through a programme of construction projects, of which the most ambitious is the Santo Domingo metro.

The Caribbean’s second underground mass transit system responds to the need to reduce the heavy road traffic congestion and air pollution of the country’s capital city. The 15.5-kilometre metro now under construction will have one line and 16 stations, with 92.6m of rolling stock supplied by France’s Alstom from its factories in Belgium, France and Spain. The government expects to have the line open early next year, with capacity for 200,000 passengers.

OPRET, the public authority in charge of the reorganisation of public transport in the Dominican Republic, says the project is part of the government’s development programme to meet the increasing demand for public transport and reduce road traffic congestion in Santo Domingo.

The metro is one of the largest of the infrastructure programmes in the planning or execution stage, as the country’s economy regains the momentum it lost in the 2003-04 financial crisis.

Santo Domingo is also the home of the country’s first cyber park, a public- private partnership providing IT and related industries, including information services exports, software development and computer design, as well as of manufacturing technology products. Parque Cibernetico Santo Domingo is established in Andres, Boca Chica, less than five minutes from Las Americas International Airport. The cyber park is designed for industrial and office users. Planned infrastructure includes a state-of-the-art digit park, designed to host software and telecom-based operations, and an industrial area for high tech manufacturing.

Project go-ahead

Since president Leonel Fernandez came into office three years ago, the government has given the green light to nearly 1000 projects, representing an outlay of about $3.5bn. The construction industry is benefiting from a huge increase in public spending following successful sovereign bond issues in the international markets since Mr Fernandez took office. Public spending in this sector has increased 16.8%, which also stimulated a 27% rise in private sector investment in construction.

“Low interest rates, which have come down from 50% or more to 11%, have fuelled a construction boom,” says Ivelisse Mieses, an associate at PricewaterhouseCoopers in the Dominican Republic. “Hence investors are taking a renewed interest in the country as an attractive market, thanks in a large degree to a low interest rate environment and a massive programme of investment in infrastructure.”

These projects range from urban renewal, housing and power infrastructure, to roads and seaports. Much of the work is focused on modernising the country’s tourism facilities, the major foreign exchange earner.

IFC commitment

The International Finance Corporation (IFC), the private sector arm of the World Bank, has provided a long-term financing package to Sans Souci Ports to expand and operate the Sans Souci and Don Diego cruise ship terminals in Santo Domingo. The IFC’s $21m financing will help to reintroduce the cruise industry to the city and support tourism.

Sans Souci Ports is carrying out a 40-year build-operate-transfer concession that will renovate the existing infrastructure at the terminals, manage pollution issues that affect the Ozama River basin, and upgrade the navigational channel. Expanding the Sans Souci and Don Diego ports is part of a larger urban revamp, which includes a marina and a real estate development, to create a multipurpose attraction on the Santo Domingo waterfront.

Salem Rohana, IFC country manager for the Dominican Republic, says: “IFC’s involvement will encourage international investors to extend private financing to local companies like Sans Souci Ports.”

The government has invested more than $120m in infrastructure renewal in the Puerto Plata region in the past three years, as part of a $275m outlay on projects in the city. “This investment in the province of Puerto Plata represents more than what has been spent in the area in 25 years,” says the government’s tourism secretary Felix Jimenez. The work includes a new sewerage system, roads connecting various towns in the province and public housing, as well as new tourism facilities offering snorkelling and other water sports.

Wealth of projects

The government’s infrastructure programme is spread across the country, focusing on schools, hospitals, roads and sanitary facilities in rural areas, as part of the 2004-2008 Provincial Development Council. In the region around Santo Domingo, 76 projects are under way, ranging from the refurbishment of the university to swamp drainage.

The bulk of the work is being carried out with state funds. There has been a rising level of foreign participation in some of the larger projects, however. Some examples are the Caucedo megaport, and the $100m in foreign investment going into infrastructure projects of several international airports, such as Samana, Puerto Plata and Las Americas in Santo Domingo.

Foreign participation in government contracts is not allowed to exceed 50%, except in certain cases when 70% control may be granted to a foreign investor depending on the complexity or sophistication of the project. Investors point out that the negotiating process can be arduous and unnecessarily time- consuming, particularly when it involves regional or local authorities.

The big stumbling block for any infrastructure project is a reliable and sufficient supply of electricity. High levels of energy loss are a result of technical failures due to deficiencies in substations and transmission lines, fraud committed in connection services and direct theft of power supply. Energy losses until last year amounted to 40% of total generation.

“We have managed to reduce the amount of loss to 30%,” says Ricardo Arrese, general manager of Edesur, one of the country’s three electricity distributors. “We have installed 3000 new transformers in the past two years to improve our distribution network, reduce theft and improve the quality of service.”

The company has spent $5m to install new meters that register consumption levels directly to a central computer, and which can automatically cut off electricity supplies if a customer fails to pay. “Thanks to our new tamper- proof systems, electricity bill payments in Santo Domingo are expected to increase by 15% to 20% this year,” says Mr Arrese.

Nevertheless, the three electricity distributors are still costing the government about $600m a year in subsidies. There is talk of privatisation once the companies are operating on a profitable basis, but no move in this direction is expected until after next year’s general election at the earliest.

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