PADDY'S OF THE CARIBBEAN

Entrepreneurs behind the launch of The Residences at The Ritz-Carlton, Half Moon Bay in St Lucia, from left to right, Brian F Kennedy, Managing Partner/Director, Neal Sweeney, CEO & President, Brendan Lynskey, Managing Partner/Director.

Oprah Winfrey; Virgin; The Ritz-Carlton; Damien Duff; Arnold Palmer and Christie O’Connor, not a bad line up to have in your corner when going into a business venture. Add in a sun kissed Caribbean island with great potential and the deal gets even sweeter. Shane McGinley talks exclusively to some Irish developers behind a new development making waves in St Lucia.

Survey after survey has trumpeted the fact that the Irish are well known for their love of overseas property investments. Each week the newspapers are packed with features on Belize, Bulgaria or the latest emerging market, on new sunny second homes in the Costas or the States and sure-fire investment packages to tempt SSIA holders and bargain hunters hoping to get rich quick in far flung shores.

Developers Are Snaping Up Sun Kissed Stretches

In recent years the Irish have begun to move up the evolutionary chain and are now not just buyers and investors but also pioneering agents and developers snapping up sun kissed stretches of land and turning them into world class resorts with big investment returns. On the 20th of June, at a signing on the Caribbean island of St Lucia, it was announced that The Ritz-Carlton Hotel Group LLC, one of the world’s leading hotel groups and Roebuck International, an Irish property development company, had signed an agreement to develop a new luxury resort.

Despite recent reports, another Irish development called Sapphire Cove, which was launched last year amide much hype has since come under fire from the Irish property press and appears, according to reports, to have stalled. However Roebuck International has strived to put their elements into place much more successfully and is keen to stress that Sapphire Cove and its problems have no connection to them or their project. “It is an enormous achievement to be working with one of the leading brands in the world. The unparalleled level of service of The Ritz-Carlton combined with first-rate accommodations and the stunning beauty of St. Lucia will make this a premier destination,” said Neal Sweeney, CEO of Roebuck International. But how did three Irish businessmen, including two former GAA stars, end up going into business with one of the top international hotel brands in the world?

Where It All Began

With his other colleagues in Roebuck International, Brendan Lynskey, who’s background is in the construction industry and Brian F Kennedy, who previously worked in publishing and real estate, Sweeney began to develop a string of developments around the world in diverse locations such as Ireland, England, Spain, Monaco and the United States.

At the time the Ritz Carlton group had been looking to expand their ventures further into the Caribbean in areas such as the Bahamas and St Lucia. Believing the timing was right Sweeney went out to St Lucia in July and by the Autumn of last year had contracts on two potential sites, however while one fell through their other option, located at Half Moon Bay, came good.

In order to test the Irish market’s appetite for St Lucia and see what the response would be they decided to release the first phase of the development. “We went to market and expected 30 or 40 sales,” says Sweeney, “and were overwhelmed to get 78 sales in 11 days, which was impressive for something that wasn’t that well known, so that gave us a lot of confidence.” Boosted by the confidence shown by Irish buyers in the resort the developers then decided to upscale the plans and increase the size of the resort. “We went ahead and acquired more land and the project grew from 25/26 acres to now 192 acres,” Sweeney outlines. While selling the development to initial investors Roebuck International promised that the resort would include a five-star hotel chain. In order to make this promise a reality, Brian Kennedy began negotiations with three of the biggest hotel chains in the world, The Ritz Carlton, St Regis and the Four Seasons.

The Four Seasons was initially eliminated as they were more interested in Barbados and did not want to build a competing hotel resort so close. By December they had received a letter of intent from The Ritz Carlton, which was a commitment that they were interested in looking at the Irish company’s development and plans.

Pushy With Style

“Then we went through six to seven months of due diligence,” says Kennedy and while he admits that it was long and protracted it was also one of the fastest agreements ever finalised by the hotel chain, who normally take up to two years to come to an agreement on committing to a resort. “They said they had never had such as pushier group but that they kind of liked that,” says Kennedy of the negotiations with the international brand.

To add extra credence to their plans Neal Sweeney reports that five days after they received the letter of intent from The Ritz-Carlton they received one from the St Regis group. This meant that they also had a backup option, they weren’t dependent on just one agreement and also meant that had a big bargaining tool in their negotiations with The Ritz- Carlton, although Sweeney does admit that they were their first choice so they were happy when everything was finalised and signed.

“We liked the island as a developer and we thought it would work but to take the risk out of it we wanted to have a five star brand.” He also believes that the association with such a high profile international brand will rubber stamp their development with a seal of quality and also demonstrate to potential investors that the project is a safe option. “It is important to them that it succeeds and they don’t want to be involved in something that won’t work.” Looking back at the how the company had gotten to where it was there were a number of factors involved in its success. Like many successful entrepreneurs Sweeney and his colleagues took a different route than their competitors. Instead of looking directly at destinations they looked at where the hotel chains were expressing an interest, as they are usually the best indicators.

Rising Price Of Land

Securing the hotel brand also has an immediate effect on prices, which is then good for investors. “We have looked at The Ritz-Carlton’s profile over the years and when they come into a place you can buy land for maybe $100 a acre but within a month of that announcement prices rise seven or eight times.” Sweeney gives the example of the Cayman Islands, where land was previously $600 per sq foot but is now more than $1,750 per sq foot since the The Ritz-Carlton entered four years ago. When it came to launching the initial phase into the Irish market Sweeney says it was a success because they organised a good PR launch, were honest with investors in what we wanted to do and made a solid commitment that they would bring in a top class hotel brand.

Challenges

One of the biggest challenges of developing the project, admits Sweeney, was acquiring the land. As St Lucia has a multi ownership system it meant tracking down all those who were named on the official paperwork. This meant treks to locations to places such as Syria, Lebanon, Barbados and other locations or dealing with estates if the people were deceased. “Some didn’t even know they owned land but was very circumspect as they may be an illegitimate child and doesn’t want to talk about it.”

The Canny Irish

On the international scene the Irish have always been prolific buyers. “The Irish are very canny in their purchases and a reason we are looking at St Lucia is because of Irish interest in the region,” says Marco Bonini, director of Prestigious Properties (UK) Limited, who have been appointed the UK agents for The Residences at The Ritz-Carlton and also have a number of developments both in St Lucia and the Caribbean. Bonini represents a number of developers from Canada to Turkey and reports that they all now want to break into the Irish market, even though some couldn’t even point it out on the map! Introduced to Roebuck International through a mutual contact Bonini believes St Lucia will be successful as there is currently a lack of top end properties. “Barbados lost the Concorde factor and those who have million priced villas were getting annoyed about the three star market invading Barbados so started going to St Lucia,” he says believing that recently launched luxury developments will capitalise on this, especially with Virgin planning to fly daily direct to St Lucia from London from next year. Sweeney, an engineering graduate from Trinity College Dublin, had previously worked for Philips and Siemens and had also worked in insurance for AIB and Canada Life. However after setting up a financial and property company and operating in the domestic market he established Roebuck International in 2005 to develop property developments abroad.

The Entrepreneur

Sweeney believes his background in engineering has given him a solid foundation as an entrepreneur entering the competitive world of international property development. “An engineering background makes you very analytical in your outlook and you look at things very coldly.” The inte rnat ional prope rty development game is often like the monopoly board. You can be dealt a good roll of the dice or a bad card and there are always winners and losers at the end depending on how well you play the game.

Secret Of Sucess

When Sweeney played GAA for Meath he says he believes that any of their successes were because the team as a whole was greater than the sum of the individuals, a philosophy he has carried with him successfully into the property game.

SWEENEY REVEALS…

Doing Business With The Ritz-Carlton They were very corporate American in what we could and couldn’t say or do. Investors In St Lucia Half had been to island on holiday and others were investors. It was a good profile mix. Difference Between Irish And US Buyers The Irish are comfortable to buy off plan but the Americans aren’t, which for phases two and three will mean more sales in US and North America. (Pictured centre, Neal Sweeney, President and CEO of Roebuck International) Doing Business In The Caribbean They are very laid back and it can be hard to get across the urgency of things. On St Lucia We believe from the research we have done it is about 4 years behind Barbados and in 10 years time it will be on a par with it. Other Emerging Markets Czech Republic, Poland and Hungary will be good and Greece is unexploited and Bulgaria will get there but will take a few years. The Property Market The domestic market I can’t see how it is going to sustain itself, which would worry me a bit. The US market has hit rock bottom a few months ago and is on the way back up. People He Admired Sean Mulryan from Ballymore, but internationally, it may be controversial, but Charlie Haughey and Albert Reynolds. The Future We are looking at another island that we can announce by the end of the year.

THE RESIDENCES AT THE RITZ- CARLTON

Ezzat Coutry, Senior Vice President of The Ritz- Carlton Hotel Company, Florida, Caribbean and Mexico region, Honour Philip Pierre, Minster for Tourism and Acting Prime Minster and Neal Sweeney, President and CEO of Roebuck International at the signing in June of the agreement to build The Residences at The Ritz- Carlton resort in St Lucia.