Investing in paradise

Nassau, the Bahamas, is attracting investor interest, as new development triggers a real estate spree

baha mar development nassau aerial view
Baha Mar development, Nassau

Most anyone visiting the Bahamas would identify with Theophilus North, the protagonist of Thornton Wilder’s eponymous novel, who alights in ultra-wealthy Newport, Rhode Island, and decides to stay there. Landing at Lynden Pindling international airport, one is greeted by a live Bahamian band and a large banner: ‘Welcome to the Bahamas and if you are lucky enough to live here, welcome home.’

Never has a more apt greeting been coined.

New Providence (widely called by its metonym Nassau, the capital of the Bahamas) is one of 700 or so islands and cays synonymous with wealth, fabulous beaches, and blessed with summer temperatures year-round. The country is one of a handful of tax-free jurisdictions in the world.

Like Theophilus North, a perceptive visitor would swiftly identify the ‘nine cities’ of economic activity and consequent sense of place:

New Providence’s nine cities

Downtown

This is the commercial centre of the island and where the cruise ships disembark. Bay Street is home to the Straw Market, a covered area housing stands of local craft and souvenir vendors, and a vast number of shops selling primarily clothing, jewellery and ‘genuine knock off handbags’ (the latter, courtesy of a street hustler, is an introduction to the very distinct Bahamian humour).

Downtown is also home to Junkanoo Beach, a well-established party destination, and a great number of beach huts serving traditional fare (cracked conch and grouper fingers) and the local Kalik and Sands beers.

The Colonial Hilton has long been an elegant meeting venue in town but may soon be overshadowed by the massive Margaritaville hotel complex developed with a hefty injection of Chinese investment.

China has, over the last years, provided US $3 billion in loans to build a new port and US $54 million in loans to construct a four-lane highway. Chinese capital is also behind Baha Mar, the island’s largest resort development.

At the time of writing, many places either remain closed or are open with a strong COVID-19 prevention protocol in place.

Downtown looks poised to rise, phoenix-like, from the devastation of the pandemic with most cruise lines making Nassau their departure point. Commercial spaces are briskly traded and there is a sense of pent-up anticipation everywhere.

Downtown is also home to a few landmarks such as West Hill Street and its thriving art scene, the Queen’s Staircase and its 66 steps, Fort Fincastle and the National Art Gallery. Up in the heights close to the fort the new US Embassy is being built.

East Bay Side

East of Downtown is a major road skirting the bay, with large colonial villas on each side, some of which have seen better days but are surrounded by lush and mature tropical park-like private gardens.

Montague Beach and the fish market there attract locals and long-term residents who can barter their way to buying freshly caught conch, lobster, crab and the daily catch of snapper, grouper and if you are in luck, the delicious Mahi-Mahi.

If you continue to drive east, you would eventually reach the southern-most part of the island with a number of farms along and, as you turn westwards, the island’s most expensive club resort, Albany.

Albany

Albany is a gated-community development offering ultra-modern residences for the ultra-wealthy flocking to the Bahamas. Jointly owned by Joe Lewis, Tiger Woods, Ernie Els, and Justin Timberlake, it is a high-walled area of some 600 acres that promises and delivers ultimate privacy to those who can afford it.

Restaurants, spas, hotels and numerous sporting facilities service the needs of this community apart from the rest and the site is constantly evolving (we spotted ads for new equestrian properties, ranchettes, in development while on island). Most properties get snapped up pretty quickly and there now exists a secondary market, starting north of US $5m.

Just before you reach Albany, however, you might drive past a pink-walled gate, announcing Adelaide Village.

Adelaide Village

Adelaide Village was one of several communities dedicated to freed slaves after the abolition of the slave trade in 1807.

The village has long been off the radar to tourists – because of its relative distance from Downtown, the shopping areas and casinos and relative inaccessibility. Today, many of the small wooden cottages are being replaced by large villas and beach front lots sold at high prices because of the proximity to both Albany and that other ultra-opulent gated community that is the legendary Lyford Cay.

It is a testament to the strong Bahamian culture and spirit that it remains distinctly Bahamian still, with lovely unspoilt beaches and the sounds of the catchy rake-n-scrape music heard coming from houses and yards at sunset.

Lyford Cay

Lyford Cay hardly needs an introduction. Developed in the 1950s by Canadian industrialist E. P. Taylor on land he had purchased from Sir Harold Christie, this is a community that epitomises old money and the ultimate exclusivity it can purchase.

As is the case with all gated developments in Nassau, you cannot access it unless you are a resident, the guest of a resident or you work there. Similarities end there, however.

While Albany embraces contemporary aesthetic at its best, Lyford Cay makes a virtue of individuality. While both are eminently opulent, the former is more sports and entertainment personalities and newly minted entrepreneurs; the latter more 3rd and 4th generation industrialists, shipping, media and finance magnates.

Houses at Lyford Cay tend to be private domains with gardens to die for and for the most privileged/original residents, breath-taking water frontage.

Lyford Cay is also a club and although one doesn’t need to join it in order to buy property, there are numerous advantages associated with being a member, not least having priority when booking a mooring at the marina.

Just outside of the Lyford Cay’s security gate are the Island shopping centre, the Island Brothers restaurant and The Island House hotel, all of which can be accessed by non-LC members/residents.

Island Brothers & Cie is an elegant if low key establishment with an outdoor terrace, primarily frequented by the residents of Lyford Cay, Old Fort Bay and surrounding areas: well-heeled Americans, a sprinkling of Europeans, and Central/South Americans (the wealthy Cuban expat community is well represented in the Bahamas, its most prominent family being the Bacardis).

As elsewhere in Nassau, this is a social hub rather than a foodie haven.

The high end food market is served by Solomon’s/The Fresh Food supermarket in Old Fort Bay, however, in addition to prices being very steep indeed as everywhere in the Bahamas, provisions are mostly imported from the United States, with some fruit and vegetable arriving from Central and South America.

That coconut water, for example, should be imported from as far as Thailand makes little sense on an island covered with palm trees.

(More about agriculture, or the absence of it, in the investment opportunities section of this travelogue.)

The Island Boutique stocks a mixture of Bahamian and generally tropical merchandise: clothing, interior decoration items, some art and a small selection of island life coffee table books. It is well curated, but perhaps more Cape Cod style than Bahamas.

Mark Holowesko has a short Wikipedia page stating, simply, that he is a Bahamian competitive sailor. He is of course much more than that. One of the czars of Nassau, Holowesko used to run the Templeton Fund until he set up his own eponymous hedge fund. He is a major land owner and wields a very significant influence in the Bahamas.

Lauren Holowesko owns and manages The Island House, a concept boutique hotel that hosts weekly Thursday night jazz nights and has its own art gallery on the grounds (more of which later). She is also mother of 4 sons, even if her very youthful looks belie it, and an active member of the cultural philanthropic set of Nassau.

The Island House has just 32 rooms and suites and is not on the waterfront. It is, however, extremely well-frequented, with the likes of Jay-Z and Beyoncé paying the occasional visit alongside the chic crowd.

This is perhaps as good a place as any to mention that social and wealth distinction aside, racial tension is not a thing in the Bahamas. For starters, local Bahamians are primarily black, but with a fair proportion of 3rd and 4th generation white Bahamians of which Lauren is one.

Then, Bahamians are confident and assertive (without being in the least bit arrogant), totally unphased by fame or wealth, irreverent and irrepressible in their philosophical and wit-tinged take on life. Servility and obsequiousness associated with ultra-high-end resorts is simply not a part of Bahamian culture.

Instead, people are friendly but do not suffer pretentiousness gladly. Famous or infamous; loaded or a once in a lifetime visitor, you’d get the same home-spun wisdom delivered with a twinkle in the eye, delivered in a broad Caribbean Creole dialect.

Just east of Lyford Cay is Old Fort Bay, another gated community developed around and along the myriad of canals flanking the sea.

Old Fort Bay

Old Fort Bay is a picture postcard community of large residential properties, many fronting the canals. Some estates exude colonial splendour; others are more contemporary in style, but both have a price tag that excludes all but the ultra-wealthy (and we say this in the full knowledge that wealth is an elastic notion).

By virtue of being more recent than its illustrious neighbour, Old Fort Bay, the development, is considered ‘more hip’ in the sense that many residents are of a younger generation. You can see them zipping up and down the canals in speed boats or engaging in various social and sporting activities. Houses along the canals are built closer together than in Lyford Cay and the community spirit is more palpable.

The word ‘canal’ may conjure up images of stagnant murky waters inlets. The canals of Old Fort Bay are anything but – they look like an extension of the ocean from which they spring, with the clear blue water as inviting as the beaches off Ocean Drive.

The larger estates are every bit as opulent as those in Lyford Cay and the club house conjures up the atmosphere of a grand classic country estate, tastefully decorated by Amanda Lindroth. The club house is, in fact, steeped in history, remnants and reminders of which are dotted around, whether in the shape of original murals and Moroccan tiles or framed maps, prints, letters and photographs tracking the history of the island and the estate. ‘Old Fort Bay’ acquires a new meaning in this context.

Love Beach

If you are circumnavigating the island from east to west, you would leave the Old Fort Bay and guess, rather than see the villa-fringed coastline of Love Beach which stretches all the way to Cable Beach.

Love Beach is remarkable for the absence of large condominium developments or hotels and its mostly private beaches, accessible through public and deeded paths.

It is to the credit of the Bahamian government that it has repeatedly turned down planning applications to develop vast tracts of Love Beach. The area is secure, private and fairly low key; the main attraction being the unspoilt stretch of beach and turquoise waters, fringed by palm trees and wild bougainvillea.

Cable Beach

This is the longest and most aggressively developed part of Nassau, stretching from the ill-defined end of Love Beach to the new Goldwynn development on Goodman’s Bay.

Cable Beach is a succession of separate ‘villages’ and gated developments along the waterfront and the main artery of Nassau, West Bay Street. While not as blue-blooded as Lyford Cay or celebrity-inhabited as Albany, it is eminently well-heeled and affluent and home to some of the most beautiful gated developments on the island. Each has its own identity and USP, with high ranking executives, investors, wealthy retirees and second home owners being the primary buyers there.

Cable Beach is also home to a great number of restaurants, bars, cafes, supermarkets of which SuperValue is the largest and Liquid Courage the most frequented liquor store chains (you cannot purchase alcohol in a food market in the Bahamas).

Most people renting a vacation home would opt for a Cable Beach property for reasons of safety and familiarity if not for Bahamian flavour or culture.

In the end, choice of location is a question of balance and compromise.

Baha Mar, the mega resort development at the far end of Cable Beach, signals its petering out and giving way to Goodman’s Bay and the home run to Downtown.

Baha Mar is interesting in that it hosts its own curated art exhibition, probably to mitigate the distinctly Las Vegas feel of its endless hotel lobbies, bars, restaurants, shops and above all, casinos. If you feel you need to be entertained – or fed – Western style, you could probably spend a week exploring its grounds without, for all that, discovering everything in this vast complex.

Over-the-Hill

Traditionally, this includes all areas south of Shirley Street, i.e. inland of Bay Street and the entire southern part of the island. Home of the original settlers, mostly of African Caribbean descent, this is Nassau’s hub of rich Bahamian culture, but also an area associated with highest incidence of crime.

Parts of it are getting gentrified and the area of West Hill Street, Delancy Street and Dunmore Street now boast a number of small art studios and galleries, with homes and buildings being renovated by enterprising new generation Bahamians and fast becoming the cultural heartbeat of the island.

We visited Tasty Teas and Aunt Hilda’s – respectively a shop selling local artisanal products and a small restaurant – both owned by a retired teacher, Hilda and her son, a published photographer. A short walk from the National Art Gallery, the historic Graycliff Hotel and the John Watling’s Distillery and Museum, these are some 15 minutes on foot from Bay Street and the Esplanade, but well worth the visit.

The Orange Economy: a signal for private investors?

A significant proportion of cultural life in the Bahamas is philanthropy-led and philanthropy-funded.

Lyfordians, Old Fort Bay-ans and Albany-ans frequently sponsor young Bahamians to study at exalted institutions such as Juilliard’s and stage events raising funds for gifted artists.

Given that the major revenue on the islands remains tourism (hotels, casinos, cruise ships), art and culture are not an economic priority and are largely left to wealthy private patrons to invest in, promote and endow.

The Bahamas Development Bank has defined economic sectors for strategic development, including the ‘Orange Economy’ for cultural and artistic activities – a sign that the government is at least aware – but notes that ‘greater investment is needed to develop the sectors [sic] full potential.’

The culture scene is, nonetheless, thriving, and if one took the trouble to investigate a bit, they would be quickly plugged into a closely-knit community that’s kept in the loop through art and music newsletters and enthusiastic supporters such as some of the individuals named in this article.

Investing in Bahamian and broadly Caribbean contemporary art is likely a smart idea as it is both underrepresented and undervalued compared to ‘grown-up’ markets such as Cuban or African art, for example.

Nassau’s real estate isn’t just about bricks and mortar

This has got be the easiest topic at the time of writing, the short advice being: buy on the day a property comes on the market to the best of your financial capabilities!

The Bahamas and Caribbean islands are hot, quite literally and figuratively. Everyone who has been on lockdown on different continents in the world and who can afford to be on the islands already is.

Those late to catch on are contemplating premium prices and having to jostle with other prospective buyers with ready cash who make offers at asking price without a blink. I am not talking hundreds of thousands here – the fastest selling properties are in the US $5–15m range.

We were able to visit a number of properties, courtesy of Cara Christie of HGChristies, and many were sold as we were visiting, literally on the hoof. Lyford Cay and Old Fort Bay lead the desirability league, with Albany trumping both in terms of price if not pedigree.

Three quarters of a million in US dollars would give you a permanent residence in the Bahamas. Most people buy in the name of a company, which has its own tax advantages when it comes to selling, as well as privacy.

Opening a bank account is a fairly daunting task, with various stringent rules in place to deter money launderers.

For most purchasers, according to Lauren Holowesko, this is a lifestyle, as well as a brick and mortar investment.

A charmed lifestyle, at a price

Tax-free regime aside, the Bahamas are blessed with a great climate – the odd hurricane notwithstanding. The country’s building codes are stringent and expensive properties come with hurricane-proof everything.

Bahamians are easy-going, have a great sense of humour and are generally very hospitable in the old sense of the word (it is not uncommon to be treated as a long-lost friend in parts of New Providence). Crime is concentrated ‘over the hills’ and limited to local gang warfare, although pick pocketing exists in tourist areas. The island of Nassau is heavily policed, however, and Covid rules enforced, with regular testing in place.

All that said, Nassau is not a place for foodies – unless they have their own cook to buy fish directly from fishermen and fresh produce from the allotments’ farmers in the southern-most part of the island. Another alternative is to fly supplies in from Florida or bring them in by yacht.

Supermarkets, even the Old Fort Bay Fresh Food market, sell primarily food imported from the US, frozen and not the best quality either. Super Value, the main supermarket franchise on the island, stocks average to poor quality produce from the US and South America (import taxes would make anything else prohibitively expensive for the locals).

Agriculture is simply not a thing in the Bahamas at the moment.

The island most suited to agricultural activities, both because of size and existing infrastructure (there already exists a Menonite farm there), is Andros. An organic movement has started in the north part of the island, with a number of farming enthusiasts starting their own projects (Nicholls Town is home to the Chiccharney Farms, for example).

Demand exceeds supply, however, and particularly so in Nassau. Farming is labour and capital intensive; the hospitality sector is vastly more lucrative and attracts most of the workforce, while flat and deep-water fishing is as much a way of life as it is a well-trodden career path. For the Bahamas to develop its own food security both a long-term, sustainable development plan and a cultural shift are required.

As it is, the Bahamas must import most of what it consumes – but the vast majority of imported goods, cars in particular, are heavily taxed. The fact is that the cost of living in Nassau is sky high. It is a charmed lifestyle that comes at a price and a paradise geared to the super-wealthy.

Even so, we know of no other destination that ticks as many boxes as the Bahamas.