KSPP > Overview > Cuba property

cuba propertyWe are currently expanding our business towards the exciting emerging property market in Cuba, with a satellite office established in Havana as of February 2009.
Considered the “Pearl of the Caribbean” for its breathtaking beauty and cultural and exotic charm, Cuba is the most populous and largest island in the Caribbean, located only 90 miles from the US mainland. The country’s 12 million people constitute the largest potential market in the region.

Though still under communist regime, Cuba is showing signs of change, with 82-year old Fidel Castro currently in retirement and speculation that the country’s relationship with the US and the 48-year old embargo are becoming more relaxed under the current US administration but face challenges ahead.

Property is extremely cheap in Cuba, mainly because, under communism, the laws on private property ownership are complicated. Cubans are allowed to own their own property but they are not allowed to buy or sell property, they can only swap, although money usually unofficially changes hands in these deals. This makes access to real estate there difficult for investors.

A major step forward in the country’s current evolution is the recent adoption of laws that permit foreigners to buy Cuban property. This comes in light of the Government’s determination to expand Cuba’s $1.5bn-a-year tourist industry by building nine golf resorts with residential property for sale at each of them. Another project backed by the Cuban Government calls for construction of 2000 luxury units over the next 10 years, with apartments ranging from simple studio units to luxurious penthouses, villas and condominiums.

Foreign investors are allowed to buy property in these new developments, but as yet only 75-year leases will be sold, rather than freeholds. This ambitious project is aimed to attract European tourists, Canadians and Britons, who do not face restrictions on visiting the country and have become a mainstay of its tourist industry. At least in the short term, American citizens won’t be among those buying into the new resorts, however that is expected to change once Cuba and the US normalize relations, hopefully in the not too distant future.

Cuba remains a special case especially because there is no guarantee that the country will experience the gentle transition from communism to capitalism enjoyed by the Soviet Union’s erstwhile Eastern Europe satellites.

Whether the country will develop into an attractive and secure business environment, that will determine the flow of foreign investments towards it, remains to be seen. In the meantime Cuba’s tremendous potential makes it a promising market worth keeping an eye on for future developments. As a forward thinking company, KSPP constantly strives to target new developing markets. Therefore we see opportunities in Cuba, especially in the medium to long term. For more information regarding the possibility of investing in Cuba feel free to contact us at info@kohsamuipropertyportfolio.com.