SAN JUAN DEL SUR – As confidence is slowly restored in Nicaragua following the uncertainty of President Daniel Ortega’s return to power, tourism investment continues flowing into this epicenter for Pacific beach development, despite ripple effects from the U.S. real estate slump.
When the former Marxist leader took office in 2007, the tourism industry crossed its fingers in hopes that investors wouldn’t get cold feet. Many did, anyway, and the industry reported a dramatic slowdown in business and appreciation rates.
The Iguana Surf & Golf Resort north of San Juan, for instance, saw a 50% decline in sales, according to sales manager Ferdie Prado. Others reported similar difficulties.
A year later, however, savvy investors are beginning to realize that Ortega’s occasional fiery rhetoric hasn’t materialized into actions against property investors. And even moments of uncertainty involving property rights at ArenasBay ended satisfactorily for investors when the Ortega administration stepped in to sort out the problem last year.
Now developers are hoping the slow rebound continues.
Alex Wilson, co-founder of the luxurious Pelican Eyes Resort overlooking San Juan del Sur, said that sales were affected during the first six months of Ortega’s return, but now investors have “done a little more homework.”
He says educated investors understand that Ortega’s sometimes frightening discourse doesn’t translate into “policies that will preclude people from investing.”
Wilson has also done his homework and says that the conditions are favorable for him to move forward on investing in the luxurious Marea Alta development south of San Juan del Sur – a project that will include Nicaragua’s first tramway to bring residents from the oceanfront boardwalk up to the heights of an exclusive clubhouse overlooking the bay.
The plush development is one example of how San Juan del Sur’s real estate and tourism has continued to mature, even with Ortega back in power.
“It’s been a year, (Ortega) hasn’t confiscated any land here,” said Javier Hugentobler, broker and manager of Nicaragua Travel and Living (nicatl.com).
The quality of beachfront restaurants – now an array of seafood and international cuisine, including the new San Juan favorite, El Pozo restaurant – have taken off in the last couple years, an indication of how tourism is growing up and improving in quality.
“We’ve eaten at a dozen great places,” said Ben Korenberg, a smiling and suntanned Vancouver native visiting San Juan del Sur.
Those who have witnessed the transformation of San Juan del Sur note that the real estate market here has entered a new phase.
“Tourism came here by accident in the ’90s – with backpackers and surfers. And we decided we gotta sell this country for its exoticness, its newness,” said Hugentobler, a Swiss national.
Since 2000, developers have bought large swaths of land that are now being developed with villas and condos dotting the bay’s rocky cliffs. Hugentobler is a partner in Bahia delSol, which sells upscale villas with sweeping bay views starting at $289,000. It’s one of several condo projects breaking ground in this once-sleepy fishing village that has since become an international tourism destination.
Farther north, phase one will soon begin on 25 townhouses and 12 Spanish-style condos at the lavish “village resort” development Cala Azul. Future phases will bring 100 more homes. On the development’s Web site, co-founder Josh Taylor has a photo posted of himself posing with his arm around Ortega.
“We are planning on breaking ground during the first half of 2008. Phase one is 50% sold out, and new inquiries come in nearly daily,” Taylor told The Nica Times in an e-mail.
The Pacific coast doesn’t just mean the area around San Juan del Sur. As the country’s pristine coastline becomes more famous, it has also grown to fill in the dots between the Costa Rican border in the south to León and Chinandega to the north.
Closer to Managua, in the central Pacific, the landmark Gran Pacifica development reports that it’s moving forward with construction, while nearby the luxurious Seaside Mariana project, which will boast Central America’s first Jack Nicklaus-designed golf course, is also reporting an increase in investor interest.
“From our vantage point, every indication is that the investment climate in the country is outstanding and continuing to trend upward,” said Kevin Fleming, the chairman of Nicaragua Developments, the group behind Seaside Mariana, which is reporting “excellent” sales and increased investor interest as word gets out about the project.
Flemming added, “The presence of a project of the size and scope of Seaside Mariana is proof to the investment community here and abroad that the time is right for investment and development in the new Nicaragua.”
Even the public sector has been investing in the tourism industry here. Plans for the coastal highway are underway (see story on Page 3); workers are toiling under the sun to improve the infamously potholed road from La Virgen to San Juan; roads and sidewalks are being built in town; and the finishing touches are being put on shower facilities at a new public beach boardwalk expected to be complete by April.
The government projects are part of the Ortega government’s commitment to tourism,which plays a key role in the administration’s poverty relief efforts.
Tourism Minister Mario Salinas, during a recent event with Ortega, said that the government thinks tourism could nearly double in the coming years, up to 1.2 or 1.4 million tourists a year.
“Tourism is one of the few activities where we have a comparative advantage over developed countries,” Salinas said. “In tourism, we can compete with the United States because we have an authentic culture that has disappeared from many other countries.”
Real estate agents, too, think Nicaragua is in a position to compete in a global market. Hugentobler said the slumping U.S. market could even benefit Nicaragua.
“It’s a warring world out there and Central America is North America’s backyard garden. This is an undervalued market,” he said.