Four weeks use, high rental yield, why life is sweet on Sugar Beach
By Zoe Dare Hall
Simon Cowell puffing out his chest on the Sandy Lane beach, the Rooneys’ frolicking in the sea … Barbados is, seemingly, never far from the headlines.
But, out of the limelight, the smaller, more mountainous St Lucia has discreetly been stealing a march on its high-profile neighbour.
St Lucia is one of the few places in the world to see an increase in flights, with BA upping its Gatwick departures from three to five a week from November, in response to UK traveller numbers to the island going up by nearly six per cent this year.
The World Bank has also placed St Lucia above anywhere else in the Caribbean, ranked in its Top 30 countries in the world to invest, based on overall growth expectations, its strong tourist industry and low crime rate.
And although prices on many Barbados developments have been slashed by 20 per cent this year, reducing the price gap between the two islands, villas on St Lucia’s new five-star resorts, such as Sugar Beach in the secluded, rugged south of the island, are still 40 per cent cheaper than Barbados equivalents.
‘Barbados has become what Marbella was in the Eighties, with beachfront villas squeezed between apartment blocks, so a lot of people are now discovering St Lucia instead,’ says Roger Myers, who sold his Café Rouge chain in the UK and bought the Sugar Beach resort in St Lucia’s prime location: on the World Heritage Site between the two iconic Pitons mountains.
Dotted around the 175 acres of lushly palmed terraces, the 85 now faded cottages on this historic sugar-producing Jalousie estate, whose guests have included Nelson Mandela, Denzel Washington and Oprah Winfrey, are being replaced by new villas decorated in a colonial-style minimalism, with huge ceiling fans, all-white interiors and exteriors, private pools and spectacular sea views.
The villas cost from $700,000 (£425,000 at today’s rate), but prices were fixed last year at a more favourable $1.72 to the pound for British buyers, which means one-bedroom villas actually cost from £406,000.
To drive year-round business and avoid empty holiday homes, there is a limit of four weeks’ annual usage for property owners, who can then rent out their villa through the hotel, run by the Kor Group’s trendy Tides brand, for remaining weeks and receive 37.5 per cent of the revenue.
Until the resort is complete in 2011, buyers – most of whom, so far, are British – get a guaranteed rental return of five per cent a year. They are also exempt from paying income tax for 15 years. Mark Petersen, a building surveyor for Tesco stores, says:
‘We’ve been holidaying in St Lucia for the past three years but the investment aspect at Sugar Beach was the most important factor as we can get good rental returns without having to manage the property – and we get four weeks’ holiday every year.’
Mark, 53, and his wife Karen, 42, a facilities manager for Sainsbury’s, were one of the first buyers, fixing the price of their one-bedroom villa at £343,000. ‘We love the laidback attitude, the setting between the Pitons and the sports facilities,’ says Mark.
‘We looked at other St Lucian developments on paper, but they all seemed too commercial. Sugar Beach is close to nature. You’re in a tropical rainforest where you see possums and hummingbirds and beautiful flowers when you step outside your cottage.
‘We’ll probably hold on to this property for five years, then buy a villa nearer Soufriere to semi-retire to for six months a year. Buying in St Lucia feels like owning a piece of paradise.’
In the flatter, more developed north, Rodney Bay can feel more Costa Blanca than Caribbean around its busy bar strip and long beachfront of big brand hotels that cater to the honeymooning masses.
But there are pockets of exclusivity such as The Landings, a marina development on reclaimed land that offers some of the island’s only freehold beachfront properties, with one bedroom apartments from £365,000.
While some of St Lucia’s high-end projects, including Raffles and Le Paradis, have hit the buffers during the downturn, The Landings recently reported £5million sales in six weeks, with buyers including Carol Vorderman, who owns a three-bedroom marina-front home there, and DJ Trevor Nelson, who visited his two bedroom beachfront apartment four times last year.
‘The Landings is effectively my pension and the best thing I have done investment-wise,’ says Nelson, whose family are from St Lucia. ‘I love it there. It’s like coming home each time I visit.’ Singer Amy Winehouse is also reportedly house-hunting on the island.
With the island’s mountainous topography limiting the number of new developments, St Lucia’s properties have held their value, says The Landings’ sales director Oliver Gobat.
‘Buyers with cash can still push to get good deals but there haven’t been price drops across the board. St Lucia has not gone through huge growth like Barbados, so there is no big pricing bubble to burst,’ he says.
One example is the seafront Cap Maison, on the Cap Estate on the island’s northern tip overlooking Martinique, where the remaining three out of 22 apartments cost from £667,000 for two bedrooms through Caribbean specialist Prestigious Properties.
‘The smart money is looking away from Barbados now,’ says Marco Bonini, director of Prestigious Properties.
‘St Lucia is becoming a lifestyle choice for many and it now has its first five-star resorts in Sugar Beach and The Landings.
‘But it also offers good investment potential, with tax incentives and mortgages available for the first time for overseas buyers, and properties at Sugar Beach increasing in value by 15-20 per cent a year.’
And with property prices still trailing behind the more developed Caribbean islands, it’s not just those with Amy Winehouse’s bank account that can afford to be part of it.
Sugar Beach, www.sugarbeach.com, 020 8812 4773;
The Landings, www.thelandingsstlucia.com, 0845 217 7851;
Prestigious Properties, www.prestigious-properties.co.uk, 020 8812 4734.