Cuba attracts foreign interest in building golf courses


Xinhua: Cuba was making progress in attracting foreign investment in 16 planned golf courses, Cuban Tourism Minister Manuel Marrero said here Tuesday at opening of the International Tourism Fair Cuba 2011.www.cubaluxury.travel

Marrero said negotiations were progressing with foreign companies interested in forming joint ventures to build the courses.

Cuba last year adopted a strategy to attract foreign investment and develop the tourism of marinas and golf courses with international capital.

The island now has only one golf course in Havana and another in Varadero.

Mexican Secretary of Tourism Gloria Guevara said her country was very interested in the program and several companies were “exploring the possibility of investing”.

Tourism is the second biggest source of Cuban revenue, contributing more than 2.2 billion U.S. dollars to the country in 2010, according to National Statistics Office data.

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British firms could be first foreigners to buy land in Cuba since revolution


Guardian:

British companies could be among the first foreigners to buy land in Cuba since Fidel Castro’s revolution in 1959, following a delegation to the communist state next weekend.

Up to 25 British companies are aiming to strike deals that could allow them to develop hotels, golf courses and renewable energy projects.

Law firm Eversheds, Esencia Hotels and Havana Energy are among the firms that will meet Cuban government officials, who are trying to attract foreign capital to boost the country’s shrinking economy.

“Cuba is open and prepared to receive foreign capital and to develop mixed projects along with the Cuban government,” said Igor Caballero, a Cuban embassy spokesman in London.

The present government, led by Raúl Castro, has promised economic reforms and last month approved a law allowing foreign investors 99-year land leases. Cuba already has commercial relationships with Russia and China, although their distance makes tourism and other trade deals expensive.

The British trip, organised by the independent Cuba Initiative, takes place between 26 September and 3 October and may lead to the first purchase of Cuban land by a foreign investor since 1959.

“We are optimistic of a positive outcome to the visit in terms of UK investment. There are significant opportunities in a limited number of sectors,” said David Jessop, director of Cuba Initiative. The organisation is co-chaired by Cuba’s foreign trade minister Rodrigo Malmierca Díaz.

Some projects, such as Esencia Hotels’ luxury resorts, could be worth up to $400m (£256m). The government could be prepared to sell 10 golf course sites, and other projects include a $40m development using a sugar-cane by-product to produce renewable energy, to be sold to the Cuban grid.

More than 170,000 Britons visit Cuba every year, a number beaten only by Canada, but Spanish companies such as the Sol Meliá hotel chain have bigger investments there.

Investing in Cuba is a challenge, because of the US embargo on the island, which limits banks’ ability to lend funds directed to Cuban projects. Cuba, which still has miles of virgin coast, does not have the resources to develop its own tourism infrastructure. The country’s economy is worth $60bn and its total electricity capacity is only slightly more than that produced by Britain’s Drax power station alone.

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Cuba’s golf future, promising but still far off


Reuters:

If Cuba plays it right, thousands of tourists could eventually be swinging their clubs at an 18-hole golf course overlooking the turquoise waters and golden beaches just east of Havana.

They will moor their yachts at a swank marina and drive electric carts to luxury villas built around the course’s scenic artificial lake.

The project, one of at least a dozen awaiting a thumbs-up from the island’s communist authorities, appears closer than ever to becoming reality after Tourism Minister Manuel Marrero said last month that Cuba will go ahead with the construction of golf courses and marinas.

www.cubaluxuryrent.comLetters of intent have already been signed between Cuba’s state-owned tourism company Palmares and several investors from countries such as Spain, Canada, Britain and even communist ally Vietnam, said a source close to one of the deals.

Cuba currently only has two courses. But sitting just 90 miles off the coast of the United States — the world’s biggest golf market with 27 million fans — its potential as a golf tourism destination is huge and so are the potential revenues.

“Cuba can be one of the strongest golf destinations in the Caribbean,” said Peter Walton, chief executive of the London-based International Association of Golf Tour Operators.

In the half century since Fidel Castro’s revolution turned Cuba into a communist state and its golf courses into art schools or military camps, the only well-publicized golf match has been between two guerrillas who hardly knew how to play.www.cubaluxuryrent.com

Castro and Che Guevara, who was a caddy in his boyhood days in Argentina, played golf in their military fatigues and boots in 1961 to thumb their noses at the U.S. government.

But even if today’s Cuban leadership has overcome its long-time ideological prejudices against the most capitalist of sports, the fine print regulating future joint ventures and real estate ownership remains a mystery.

Golf courses are generally financed by surrounding real estate developments, so the first thing investors will be looking at is Cuba’s willingness to sell or lease land to foreigners. To justify the investment, leases will have to extend for at least 50 years.

“They seem ready to accept the real estate developments. But at this point nobody knows the terms of the leases or the conditions Cuba may attach to the contracts,” said a foreign businessman involved in one of the projects.

PERCEPTION OF RISK

Over the years, several projects have been pitched to the Cuban government, including proposals by British architectural firm Foster + Partners, French construction company Bouygues Batiment International and, more recently, the Vietnamese Housing and Urban Development Corporation.

Most of the developments are planned along Cuba’s northern coast, including Havana and up-market resorts such as Varadero and Cayo Coco.

Besides villas and apartments, some of these projects worth hundreds of millions of dollars include full-scale, Western-style restaurants, supermarkets and shopping malls so far non-existent on the communist-run island.

But to see the rough hillsides of a suburb in Havana turned into smooth greens filled with foreign putters will probably take more than just reasonably long lease terms, says KPMG analyst Andrea Sartori.

“You need to have certain stability and guarantees to property ownership that I think the country currently doesn’t have,” said Sartori, the head of Golf Advisory Practice, a Budapest-based division of KPMG specialized in the industry.

“It is very much an issue of the perception and risk that an international investor will have in leasing a property in Cuba today.”

Although Cuba’s 1995 foreign investment law foresees the sale of real estate to foreigners, the experiment in the late 1990s was soon halted after limited sales of apartments.

Business sources say Cuba would seek to create joint ventures in which it would provide land in exchange for 51 percent equity, Foreign partners would then be responsible for a huge cash injection, a model similar to the one used two decades ago to develop the island’s hotel industry.

“That tends to bring down the returns (on assets) to foreign investors below the 15 to 20 percent they will be looking for,” said a businessman with experience in Cuba.

To break into the regional golf circuit Cuba would need to develop a cluster of at least 10 courses, foreign experts say.

YANKEE INVASION

Even if nobody says it, the investors behind these projects are betting on a future opening of American tourism currently prohibited by a Cold War-era U.S. ban.

President Barack Obama has lifted restrictions on the visits of Cuban exiles to the island but a Congressional bid to end the travel ban affecting other Americans seems stalled amid renewed political tensions.

“These golf projects will take time to develop and the relationship with the U.S can improve a lot in the next two or three years,” said Tony Zamora, a Miami-based Cuban American lawyer familiar with some of the deals.

But the challenges facing Cuba’s future golf tourism industry may also derive from the island’s own domestic problems.

Before building thousands of luxury villas for foreigners, a businessman says, Cuba will have to address its overwhelming housing deficit to deflate potential social tensions.

“The key ingredients of a successful golf destination are there — The climate, the proximity to a major market, the flavor,” said KPMG’s Sartori. “However there are key issues that need to be resolved.”

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Chinese Companies Invest In Cuba Hotel Projects


Bizchina:

A Chinese hotel investment project is underway in western Havana, the capital of Cuba. The luxury hotel, named the Hemingway Hotel, will have 600 en-suite rooms and “will be built this year in a Cuban-Chinese initiative involving the state-run Suntine International-Economic Trading Company of China and the Cuban Tourist group Cubanacan,” according to E-Hotelier.com.

Suntine will own a 49 per cent stake and Cubanacan will own 51 per cent of the venture. Citic Construction, the principal building company for the 2008 Beijing Olympic Games, and the Cuban Ministry of Construction are also involved in the project. Reuters adds that “Qatar and Cuba signed an agreement in May to build a USD75m luxury hotel on Cuba’s Cayo Largo.”

The targeted market is reported as future U.S. tourists, given that the U.S. government seems likely to loosen its restriction on travel to the Caribbean island located just 90 miles offshore from Miami, and Cuban-Americans, who now have no restrictions to travel to Cuba.

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