Caribbean's
pristine Dominican Republic attracts wave of U.S. investors
By Kerry Sanders Correspondent CNBC
Video
The
Caribbean's Dominican Republic is a land of colors with its red,
white and tropical blues. But it's all about the green that has
people buzzing these days.
The island nation may have been an undiscovered
country to Americans just three or four years ago, but today it
is paradise found. Real estate projects in this Spanish-speaking
country are sprouting like palm trees.
“The
United States market is now beginning to identify the values and
the opportunities that lie here in the Dominican Republic,
particularly in a project like Cap Cana, which is aiming to the
highest end of the world market,” said Ellis Perez, president of
Cap Cana.
Cap
Cana, a project hugging the island's southeast coast, will be
the country's largest private community — a mammoth 30,000 acres
— with plans for five hotels, five golf courses and thousands of
homes. It's just beginning to take shape with hundreds of
millions in foreign dollars, 33 percent of which is American.
Real estate in the Dominican Republic is so hot
that even before they broke ground at the project Roko Ki they
had sold $100 million in properties, 90 percent to Americans —
that too, all in one day.
Roko Ki's natural beauty is undeniable.
Investors are banking on another seaside jaw dropper, with
jungle bungalows for the rich and famous, signature golf courses
and fancy villas, signaling even more American interest. The
hotel chain Starwood Resort Worldwide is building a Westin.
“In between 10 and 15 years we expect Roko Ki to
have 8,000 residences and about 6 to 7 high end, five-star
hotels,” said Nick Tawil Fernandez, president of the Roko Ki
Westin.
Factors responsible for the recent Dominican
Republic fever are varied. They range from a series of Dominican
baseball stars, a democratic government encouraging foreign
dollars, a number of new direct flights from the United States
and a lot of recent good press. These reasons coupled with
bargain land prices and cheap labor have helped put the
Dominican on the map like never before.
“It's just very welcoming, very hospitable and
once you've come here you want to come back,” said Tawil
Fernandez of the Roko Ki Westin.
Many Americans fall in love with the Dominican
while on vacation. A record number of tourists visited this past
season after Hurricane Wilma pummeled Cancun, Mexico.
Even Hollywood is taking notice. Recently Brad
Pitt was flying about the island looking for his piece of
paradise. Fellow actor Vin Diesel is planning on building in
Boca Chica and Robert Deniro is also actively looking.
Nestled between Cuba and Puerto Rico on
Hispaniola, the Dominican shares this 29,000-square mile island
with Haiti.
Poverty
remains harsh reality
Islanders like to say Christopher Columbus was
the first tourist here. Historians believe Columbus landed on
Hispaniola before making it to the new world. Today well-paid
tourism-related employees earn between $100 and $140 a month.
Nonetheless, the poverty is undeniable — the poorest being an
estimated 1 million Haitians who work in sugarcane farms or
construction.
Small island, big investment potencial Dominican
Secretary of Tourism Felix Jimenez recognizes that low wages are
part of the draw but also says foreign money is raising the
standard of living.
“My country is a poor country, but we are
working and investing a lot of money in new roads, electrical
supplies, water supply to help build a modern country,” says
Jimenez.
That progress is increasingly visible and is
encouraging investments from around the world.
Recently a German businessman sank $50 million
into a marine adventure park on the north coast, Ocean World,
which has been drawing tourists from all over the country.
Wall Street money manager Boykin Curry and a
group of investors recently took the plunge on the island's
breathtaking north coast and bought up to 2,000 acres to develop
in Playa Grande at a bargain $55 million — golf course included.
“He has seen not only the cooperation of the
government, but also of key individuals and key development
partners in the country that can help us,” said Carl Carlson,
CEO of Playa Grande Holdings.
“We have seen a lot of interest from golfers and
from people in the industry and everybody is expecting a lot
from us,” he added.
Down the road from Playa Grande is picturesque
Cabarete beach —a water sports mecca for world-class wind and
kite surfers — that has made a splash with Americans.
“Valero is 5 years old, and at the beginning we
had a base of international owners, almost 10 percent were
American,” said Mario Magnan, general manager of Valero Beach.
“But recently we're seeing a big flux in
American owners. Today, Valero Beach is 70 percent American-owned,”
he points out.
Retirees drawn to service factor
American retiree Phyllis Berney from Wisconsin
discovered the Dominican Republic was a bargain a long time ago,
but it's the Dominican people that sold her on staying.
“My mom is going to be 98 in November, and she
said, 'Where else could I be that someone could be so kind they
actually help me put on my shoes, that I have someone with me
all the time?'” said Berney. “'I don't need a walker because
when I want to walk someone walks with me.'”
Five years ago Jason and Michelle Matthews from
Philadelphia discovered the Dominican Republic while on vacation.
They now live part-time on a farm on the north coast. They also
own a 15,000 square foot beachfront villa that cost them $2
million dollars and that they rent out to other Americans.
“I think most Americans have discovered what
Columbus discovered a long time ago, particularly on the north
coast, it's still an unspoiled pristine paradise. It's not over-invested,
not over-developed,” said Matthews.
The trick will be keeping it that way.
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