Cameron Fraser, General Manager of Nonsuch Bay Resort, is passionate about the development of Antigua and Barbuda for the benefit of international visitors and locals alike. A key figure in Antigua and Barbuda’s tourism industry, his latest project is called the Marina Residences. These one-bedroom suites, each with a private plunge pool, are located within a resort with all the necessary amenities and optimized for investment under Antigua and Barbuda’s Citizenship-by-Investment Programme (CIP). Here, he discusses the many positive repercussions of the country’s CIP and how investors can obtain a convenient second-home in the sun, a new passport and promising financial returns all at once.
You started developing Nonsuch Bay in 2003, and it opened its doors in 2010. What is the story and philosophy behind this resort?
Nonsuch Bay was bought to develop residential property that we would manage on behalf of homeowners. So, from day one, we constructed properties for sale to individuals seeking a second home in the sun. More recently, we’ve been able to take advantage of Citizenship-by-Investment Programme (CIP) in Antigua and Barbuda. Currently, the split between homeowners and CIP purchases is 60/40 in favour of second homes in the sun. Those individuals tend to use their private homes here between eight and 12 weeks a year, and the majority of them then choose to have us manage it in their absence as part of the hotel programme. That helps them to derive an income, which they can use to offset their community charges, insurance and other carrying costs. So if you’re a homeowner and you sign the rental pool agreement, you let us know which dates you want to use your house one year in advance. We then sell every other room night to a hotel guest, and that allows us to drive revenue for the owner.
What would you like to say to potential homeowners looking for a home away from home and interested in buying property?
This is a convenient, beautiful and peaceful environment. Plus, the accommodation is stunning. The convenience doesn’t just relate to landing on the beautiful island of Antigua’s new airport and transferring easily to the eastern end of the island – it’s really about being part of a community. Having a second home in a country that isn’t your primary residence can be very stressful, and when you go on holiday you don’t want to spend your first four days sorting out all the maintenance issues. If you buy a home on one acre of land overlooking a beautiful bay, you’re on your own and you will have to take care of your own water and power, etc. But if you buy property somewhere like Nonsuch Bay, it is all done for you. You benefit from some scale and it removes the worries.
A lot of countries are seeing a shift towards closing borders, but we’re going in the opposite direction and there are all sorts of benefits it brings back to Antigua and Barbuda.
In 2013 Nonsuch Bay started working with the CIP. Could you elaborate on the incentives that entails for homeowners?
Under the Antiguan legislation, there are three choices for individuals looking to get a second citizenship: the National Development Fund, which is a one-time gift payment to the treasury, a major investment, or to buy real estate and hold it for five years. If choosing the latter, you need to make several assessments because the primary idea is that at the end of the five years investors should be able to sell the real estate as a good investment. In the end, it puts you in a better position than the person who opted for the one-time grant. When you’re deciding where to buy, you need to find a property that’s going to be functioning over the next five years, so you can resell it. That’s why it’s important to have a well-managed property. There are a lot of people building units who may not be sure of how to manage and link everything together. It’s a lot more than just buying land. So, the Citizenship by Investment real estate investors should be clear that are they buying into something with all the components necessary to: a) enjoy it themselves and b) have it appreciate in value. We are succeeding because of our experience and existing success. We are selling around two to three units per month.
Some nationalities are compelled to look for new citizenship for a variety of political reasons, but what do British citizens have to gain through the CIP?
Many British individuals are looking to secure a second residency for issues relating to their personal tax arrangements and for estate-planning purposes. It is not uncommon to have people from Britain, the EU, the USA and Canada investing here. These are people who are making arrangements within the law. There are also individuals looking to secure the freedom to travel for their business or family.
But for other investors, freedom of movement is key. A lot of countries are seeing a shift towards closing borders, but we’re going in the opposite direction and there are all sorts of benefits it brings back to Antigua and Barbuda. For example, there are more people in the country, which helps pay for government services. People who move also tend to be the best, brightest and most economically active. I think that is something that’s not talked about enough – the secondary opportunities that come from citizenship by investment. Some people come here, fall in love with the country and then they are motivated to make an additional investment or encourage other people to come and make an investment beyond real estate. That’s happening already and my business is a direct beneficiary of that. I believe this is a legitimate and commendable to raise revenue, diversify and introduce our country to wealthy individuals who can further elevate the economy, their lives and the lives of locals.
Another secondary effect is the employment it creates, which clearly benefits local communities. In our case, we have 75 full-time workers onsite, and when we open the new suites there will be another 80 to 90 full-time positions. More employment creates a larger tax base, and as we sell suites, the government benefits from VAT on them. The agricultural sector is also benefiting, as we try to buy our fruit, vegetables and fish locally as much as possible. The local transportation sector also benefits.
Citizenship by Investment is a legitimate and commendable way to raise revenue, diversify and introduce our country to wealthy individuals who can further elevate the economy, their lives and the lives of locals
What returns have investors seen so far in Nonsuch Bay properties, and what are your projections for a five-year investment?
At the moment we cannot speak to CIP investors because five years have not passed. However, we have been able to evaluate previous investments. One case study saw an investor make returns of just under six percent per annum. For owners of large apartments, the best they can expect is a return of about three percent because they’re using them so much themselves and because the units are so large. Not only does this cover the initial cost, but they also get 12 weeks free vacation time in their homes. That’s a good value proposition and investors have been happy.
For CIP real estate, we’re developing one-bedroom hotel suites with private plunge pools, which are 600 square feet, suitable for couples, the biggest market segment. They’re smaller but far more efficient to run as a hotel space. These properties have been optimised for investment, and a conservative estimate is that they should expect four to five percent per annum returns.
Political stability is a key concern for any investor. How would you describe the political situation in Antigua and Barbuda?
Of course, it’s one of the primary drivers of their decision. We are a parliamentary democracy and we should be proud that we hold elections regularly and there have always been peaceful transitions. There is stability because the democratic process works, and the courts are independent and render judgments that are fair and free from interference. As a businessman, I’ve grown my business under both political parties’ tenure, and both have provided opportunities for growth.
How would you describe Antigua and Barbuda as a brand?
If you look at visitors’ comments, you can see that people are made to feel extremely welcome. The built environment can be changed by architects or planners, but what will continue to drive tourism is the character and personality of the Antiguan people. In reviews, guests are consistent in their praise of the staff or my colleagues at other hotels. There are many countries in the world where they would be really happy to have such a level of positive attention. People here are unique in the region. Each island has a different character and Antigua is very welcoming and friendly.
What will continue to drive tourism is the character and personality of the Antiguan people.