Summer 2010 Update

While we were giving thought to this Project Update, we decided to call a short “Time Out” to review and reminisce a bit about the world in general, changes in our area of the Gulf Coast, and in our emerging community, since we began to create Santillana del Mar & Sea Ranch a bit more than three years ago. A few years ago, Campeche was finally getting noticed as one of the few unspoiled, friendly, safe, traditional and historic areas left in the Yucatan Peninsula and specifically along the Gulf Coast. Unknown to us when we purchased the property where our project is located, a major European development group was purchasing a large section of land nearby for the first megaproject along the coast, including condo towers, a golf course, a marina, hotels, shopping centers etc. Many visitors from North America, Europe and elsewhere were showing up, with an appreciation of the quality of life here.

As the financial events of 2008 and 2009 unfolded, we were curious about how progress and development in our area would be affected. While traveling here and there during this period, we were able to talk with friends and clients in many places, including most of Europe, Dubai, Singapore and the U. S. As market uncertainty hit most of the world, we began to realize that the Yucatan had remained a relative oasis of tranquility in the middle of it all. Yes, there were fewer visitors for a couple of years, yes, the real estate market was a bit quiet, but there was no significant downturn in real estate values either in land or in houses. Why not? Perhaps for several reasons. Ironically, since Mexican banks have historically not lent much money, and when they do it is with plenty of collateral and guarantees, there wasn’t much in the way of bank foreclosures, mortgage “investment packages” gone sour, etc. It also appears that wealthy Mexicans from larger Mexican cities are moving here more and more, to get away from the unfortunate lack of security that is a real problem in the North and the capital.

So what did we do while this was taking place? Nothing dramatically different. Since we had finally obtained all the permits now required under some new local and state real estate development laws, plus our Environmental Impact Study on very favorable terms, we were able to get on with basic infrastructure work, bringing in large amounts of solid rock fill in our beachfront section, putting in wells and planning the electric and water systems, etc. We were able to go about this in a careful and meticulous way, as many of our owners were re-scheduling construction of homes until they figured out what their new portfolios looked like. And, as we can now appreciate since things have gotten so much busier this year, we had a chance to enjoy life and pursue some other business opportunities. We were able to enlarge our beachfront holdings with several new parcels, where at some point in the future there will be some opportunities for homes, perhaps some condos, and even a nice boutique hotel.

So what’s happening now? Well, from all accounts, the world seems to be getting back to normal, if there is to be such a thing in the short term. There has been a marked upturn in terms of interest, visitors and sales since early this year. As we talk with folks who come down to see us, trying to understand what brings them here and what they are looking for, several themes repeat themselves. Many face the realization that even if they took a hit in their net asset position, they still have to get on with trying to make the most of what they have, looking for solid values in property, and anticipating the future when they want to have a home in a beautiful, tropical climate. Others have done their homework, and found out that our area still offers a superior product for less money than elsewhere. And, nothing new here, we still have a relatively low cost of living, a very low cost of labor with abundant availability, extremely low property taxes, and a relatively easy trip back to the U. S. With hundreds of flights into Cancun from most major European cities, often with round trip fares well under $500, it’s cost effective to come over and rent or buy something to use part of the year. In summary, Campeche and its coast still stack up quite well in the contest for attracting future residents and investors.

What’s new in Campeche? We often laugh about how when we arrived seven years ago, the best supermarkets were rather sad looking local ones, that obviously had never even heard of competition. Luckily, Sam’s Club opened in that same year, and now we have a Walmart Super Center, a huge Mexican version of the same thing, “MegaComercial”, and the local chains have had to upgrade their offering or close down, as several did. A couple of years later the fast food chains moved in, with Big Macs, Burger King, KFC and others doing well. It should be noted that all these modern and convenient services were located in the new section of the oceanfront avenue entering the city, keeping the historic center of Campeche, a UNESCO World Heritage Site, as beautifully preserved as ever. This year there is an Applebees restaurant going up, next to a Casino, also in this new section of the city. A Casino you ask, isn’t gambling illegal in Mexico? Well yes, however we have Casinos in major cities, with lots of slot machines and some table games and entertainment, don’t ask me how they get away with it, but what a country!!

OK, now what about property for sale? Good news here, there is still some good stuff around. And, even though we haven’t lowered any prices, just to accelerate our sales a bit more this year, we haven’t raised any prices since 2008, although this will probably be the last year we can say that. In our Santillana del Mar beachfront section, where we have deposited and packed more than 60,000 square meters of solid, rock fill during the last year to create an outstanding building foundation for homes, we still have a couple of front line lots next to the beach priced at $150,000. Just behind them, in the second row, there are several excellent lots available at either $100,000 or $125,000, depending on size. Our Sea Ranch section will be underway later this year with the main entrance and street. Here you can establish a wonderful estate with lots that are roughly ½ to one full acre in size, or around 2000-4000 square meters. Starting at $85,000, this is a lot of land for the money, and you can accommodate a large garden, tennis court, swimming pool, or all of the above.

Beachfront Condos: Due to a very strong demand for a high quality and reasonably priced Condo product in our area, we have decided to build a few small, two story, four unit Condo buildings in one corner of Santillana del Mar. We expect to offer units of around 1750 and 2250 square feet (150 and 200 square meters), starting under $200,000. The first of these units will be under construction this Summer.

Our section of the Gulf Coast will be developing rapidly in the next several years. We have written before about the large project just one-half mile down the road from us, Campeche Playa (www.campecheplaya.com). This project has not been immune from the market conditions in the last couple of years as you might imagine. About one year ago the developers secured an agreement with Mexico’s largest construction company, ICA, to handle the construction of most of the project, including the 7-8 condo towers that are now either completely finished or within a few weeks of being so. They are also making progress on getting the golf course construction back on track, as well as the Marina and other interior streets and infrastructure. This huge project is firmly beyond the critical mass stage, and guarantees that we will have a vibrant community around us in the very near future, with shopping, entertainment and all the services that one might wish to have nearby.

We hope you find this information helpful, and we invite you to use the Contact Page if you would like to further discuss property opportunities at our project or if you have any questions. We are proud to have an outstanding group of property owners at Santillana del Mar already, from Mexico, the United States, England, Spain, Germany, Greece, Dubai, China and Hong Kong. Most are business owners or executives who look forward to living here and to possibly start businesses in the future. We would be delighted to have you as a part of this group!

Management Announcements….  Malcolm Topping Named Project Manager

After first visiting Campeche and the Gulf of Mexico coastline several years ago, Malcolm could see an area with huge potential that was just starting to take off. Now, after having purchased property in several locations along the coast and also with us, Malcolm has decided to make Campeche his base and headquarters. And we are quite pleased that he has agreed to take on the responsibility of being our on-site Project Manager for Santillana del Mar, and for Santillana Sea Ranch.

Malcolm has been investing in property for a long time, including rental properties in England and Hungary, as well as his Mexican holdings. He has been involved with construction, remodeling and property management. However, these activities have taken a back seat for many years to his main area of expertise, security.

Following a stint in the British Royal Marines, Malcolm began a very successful career that has taken him around the globe, attending to the security needs of high profile and high net worth individuals, corporations, and other institutions. This has recently included several years in Iraq handling the protection of telecoms and other projects, during some of the most troublesome years following the war. Several times in the last year he would send us a message that he was “going on a cruise”, meaning that he was in charge of security for a mega-yacht or commercial vessel passing through the pirate infested coastal waters of Africa. Looking after off-shore petroleum operations in Angola, supervising the installation of petroleum pipelines off the coast of Iraq, and other such tasks have just been part of his yearly routine.

Now, although he may be occasionally enticed to head out for an especially challenging temporary assignment, Malcolm will be making Campeche his home, and will make Santillana del Mar his main responsibility. As many of you know, the safe and peaceful atmosphere of Campeche is one of the best things we have going in our area. But, when it comes time to plan and execute our security system for the project, we are delighted to have a true international expert available to take charge.

You’ll enjoy meeting Malcolm the next time you come down to visit!

Until Next Time, Best from Steve and Emelia