The fractional unit model simply does not work here

Easy access to nearby quality golf courses? Yup.

Easy access to good nearby restaurant facilities? Yup.

In a generally safe environment? Yup. Despite the reports of gun crime, Bermuda is still generically safer than many other destinations and offers an easy ability to mingle with local residents. This is a unique factor of the Bermuda setting.

Easy access to a beach? No. Tucker’s Point Club golf cart transport must be called for both going to and coming from (but it is free). If on foot, the hilly area means strenuous walking.

Easy access to the ocean for fishing or sailing? No. There is no marina. Castle Harbour is about the size of Harrington Sound with worse access. Access to the nearby open ocean is always dangerous and possible only in ideal weather conditions for any craft - power or sail.

General ambience? In the Ship’s Hill area, visual ambience is high. The cottages are well set out and individually attractive. In the Castle Harbour side, the residences are close-packed and unattractively arranged.

Car availability? No. Bermuda laws prevent car ownership.  There are no car rental facilities. Reliance is on relatively dangerous cycle transport, and on public transport that is a considerable walking distance from any residential unit. Local taxi service is not good by day, bad in the evening, and worse at night. Buses do not run late at night. If residents/buyers can have personal cars, then the necessary on-site parking facilities will significantly damage the visual ambience.

Price? TPC units cost several times as much as similar units currently available in similar concept settings in the Caribbean and elsewhere. These units usually have excellent access to beaches and marinas with easy access to the open ocean. Good golf courses and rental cars are available. General ambience ranges from good to high. 

Is Tucker’s Point worth the price asked? Not in my view. Proof? Since 2008, TPC units have not sold in quantities sufficient to make the project profitable.

Conclusion? TPC cannot be resurrected or made profitable by building and then trying to sell even more units. TPC needs to go the way of all failed business projects. Let it fail. Let it drop back into the financial market where another risk-taker will step forward and snap it up. That new buyer will then sell the existing units at the price at which the market WILL pay. Probably 30/40 or 50 per cent lower than currently asked.

TPC’s investors have been swimming naked and the tide is running out. Mistakes do happen and businesses and projects do fail. Pan American Airlines, Pink Beach, Lehman Bros, British Motor Corp, Trimingham Brothers, AIG, British-American Insurance, Belmont Newstead…

The factors that apply to Tucker’s Point, also apply, in one degree or another, to units at Belmont Newstead, Pink Beach, the Reefs, Ariel Sands; and to units proposed at Lantana, Southampton Princess, Sonesta Beach, Coral Beach/Horizons, and Park Hyatt.

It is entirely possible — I believe probable — that the ‘fractional ownership’ concept that works well elsewhere is unworkable in Bermuda’s unique social, geographic, tax, and economic setting. The inconveniences that Bermudians and the Bermuda Government expect reasonable multi-millionaires to accept are not compatible with the far higher price premium that Bermuda demands — and real estate developers hope to get — as payment.

Substantive support for my belief is shown in the persisting failing of Tucker’s Point; the actual failures of Pink Beach and Belmont Newstead; the difficulties of the Reefs and Ariel Sands; delays in the starting of Coral Beach/Horizons; and the non-starting of similar units at Lantana, Park Hyatt, Southampton Princess, Sonesta.

Astute and dispassionate investors and developers see the developer reality. Across and throughout all Bermuda, astute and dispassionate potential buyers — from overseas — have not bought sufficient units in any of Bermuda’s newly built stock of over 200 fractional properties to return a profit in even one of those developments. 

Morgan’s Point has a far better chance of success. It lacks a beach but can have everything else and the car problem is easy to fix.