The More Things Change…

The More Things Change…The More Things Change The overall economic activity on Anguilla is impressive—not only in the real estate sector (which is usually the most obvious area of change, as it impacts the immediately visible physical environment) but across all lines of economic activity. In addition to real estate, with regard to my areas of personal professional experience, the substantially increased economic activity ranges from financial services (company registrations and incorporations) to office services (document supplies and equipment sales) to courier services (with the number of pieces of outgoing express freight exponentially increasing to the point where that number is beginning to equal the ever increasing number of pieces of incoming express freight, which is truly quite amazing for an island that doesn’t have a manufacturing base). However, from simple daily general observations, the reality of increased economic activity is visible across all business lines—hotels, restaurants, stores, markets, car rentals, car sales, etc.

With reference to real estate in particular, in addition to coastal based growth (growth that primarily includes luxury expatriate villas, hotels and resorts) there has been a substantial amount of inland development recently—with new retail malls being built, a new medical facilities center nearing completion, and centrally located land being cleared on what seems to be a daily basis for the creation of additional office and retail space. Fortuitously, most of this inland development is Anguillian owned, as the special charm of Anguilla is a function (at least in part) of the fact that Anguillians are the backbone of the island’s entrepreneurial and professional sectors—however, what may be even more fortuitous is the fact that (perhaps for the first time) Anguillians are getting actively involved in the development of coastal property…the high end, high profit sector. In fact, I’ve had the good fortune to recently tour a number of Anguillian built luxury villas that rival anything the expatriate sector has developed—which is all to the good, as it shows that the expertise brought to the island by the outside investor is being assimilated, emulated and (in many cases) improved upon.

An interesting issue with regard to all of this increased development is one of absorption, vacancy rates and occupancy rates. Whereas the number of transitory high net worth individuals interested in investing on Anguilla to purchase or construct vacation homes shows no signs of abating as yet (with transitory referencing the fact that those investors only spend a few weeks or months of the year on island), it will be interesting to see if the ever increasing holiday inventory outstrips that demand. Concomitantly, it will be interesting to see if the number of indigenous businesses will increase (or if the existing indigenous business will expand) to the point where they can fill the space that Anguillian owned commercial development is creating—will there be a sufficient number of Anguillian owned businesses to absorb the square footage coming on line, or will Anguillian developers push to have Government approve business licensees for expatriate retailers and service providers so that their buildings hit occupancy levels that allow them to service debt and realize profit…keeping in mind that such retailers and service providers will not be transitory (in that, having businesses here, they will be here).

Whereas Government is (quite correctly, I believe) interested in ensuring Anguilla develops for the benefit of Anguillians, it will be challenging to find that balance point as Anguillians developers put pressure on Government to issue licenses for expatriate businesses to fill the buildings they’ve built. Essentially, this is just another dimension of the many questions surrounding immigration (as, for example, Anguillian contractors are pushing Government to issue work permits for expatriate workers so that those Anguillian contractors can meet their construction obligations), it is an interesting new dimension to that question—as it becomes increasingly difficult to know how to ensure Anguilla develops for Anguillians…does Anguillian policy help the Anguillian developer with vacancy rates that are hurting him today, or does Anguillian policy help the future Anguillian businessman who might never have a chance to emerge if foreign owned business fill current real estate vacancies (keeping in mind businesses are not necessarily transitory the way vacationers are). With the foregoing in mind, these challenges will have to be addressed by a quickly changing group of prominent players, as the Governor, the Deputy Governor, the Attorney General and one of Anguilla’s longest serving and most influential Permanent Secretaries are already (or will soon be) en route to new positions.

Scott Hauser was born in the United States and moved to Anguilla in 1976, having been involved in numerous development and business ventures since his arrival on island. In 1989, Mr. Hauser left Anguilla for two years to pursue and earn a Pre-professional Degree in Architecture from the Harvard Graduate School of Design and a Masters Degree in Real Estate Development from MIT, both universities being in Cambridge, Massachusetts. Since returning to Anguilla in 1991, Mr. Hauser’s primary area of interest has been in the marketing and sale of luxury residential real estate, whereby he has represented Sotheby’s International Realty since 1995—initially as an unaffiliated associate and currently as a fully affiliated associate being the Director and Principal Realtor of “Anguilla Properties – Sotheby’s International Realty”. Mr. Hauser can be reached at shauser@prorealty-anguilla.com.