With Costa Rica enjoying significant rising visitor numbers, particularly from North America, and is a growing retirement destination, the country is becoming a target for more international developers.
Costa Rica is the most visited nation in the Central American region, with 2.3million foreign visitors in 2014, capturing a market share of 26.4% of all visitors to Central America. It is estimated that around 100,000 American citizens, live in the country and more than one million visit Costa Rica each year.
The United States is Costa Rica’s largest trading partner, accounting for almost half of Costa Rica’s exports, imports, and tourism, and over half of its foreign direct investment. Costa Rica is also sought out by ‘medical tourists’ wanting to take advantage of its cost-effective health care services.
Around five out of 10 of Costa Rica visitors head for the Guanacaste/Papagayo region, according to the Costa Rican Tourism Board (ICT) with most growth and opportunity concentrated in three beach areas Playas del Coco. Playa Hermosa and Playa Panama.
Among celebrities promoting the region are Matt Damon, George Clooney, Mel Gibson, Gisele Bundchen, Tom Brady, Angelina Jolie and Brad Pitt.
Now, The Papagayo Development Group has unveiled plans to raise around US$67million of initial funding to capitalize its Resort Development and Management operations in the Guanacaste Region and to acquire and develop the first two prime development assets.. Both are fully entitled and designed and are immediately available for development and sales.
The first, Ladera del Mar, is a 561-hectare (1,386 acres) Master Planned Community that is currently under development in Playas del Coco, Guanacaste, Costa Rica.
The second is The Wyndham Papagayo Yu Hotel and Private Residence Club, an upscale, 63 residential unit (151 keys), villa-style project in Playa Panama.
Project promoters and resort development experts, David Disick and Thomas Fulton, tell OPP.Today, “Putting your money into the Papagayo area is about as safe of an investment as you can get. With everything that is happening there we will see strong returns on our money in just a few years.
“What I am seeing is that due to the fear of the stock market in the United States and the stagnant economy and real estate market in the US and Canada, more and more people are moving their money to offshore investments such as real estate here in Costa Rica.
“Real estate values are a relative bargain as compared to Hawaii, Mexico and the Caribbean. With resort home prices in places like Maui, Cabo San Lucas, Playa del Carmen and throughout the Caribbean approaching $1,000/square foot and ocean-view home-sites nearly $1million, the Papagayo Region has become a true bargain!
“This becomes especially true when you compare the extraordinary vacation and lifestyle experience offered by the bio-diversity, year round weather and easy access of the region, ” says Mr Disick.
Ladera del Mar is one of the last large tracts of ocean-view parcels along Costa Rica’s Pacific Gold Coast. It overlooks Playas del Coco, the centrally-located and most populated beach town in the Guanacaste Region, and is a 20-minute drive from the expanding Daniel Oduber International Airport in Liberia.
“As an entertainment center for the surrounding luxury resorts, Ladera del Mar is strategically positioned to capture a dominate market share of the incoming buyers and investors.
“Ladera del Mar commands one of the most convenient and dramatic locations in the area, with easy accessibility to the surrounding communities and beautiful beaches. Ladera del Mar currently has an on-sight sales, marketing and management center located within the already built, 5,000 square foot, Welcome Center which is located at the project’s main entrance.”
Real estate options will include all price ranges of single family lots, single family homes, condominiums and townhouses, Private Residence Club/Fractional Ownership, hotel development sites, hotel managed residences and commercial/retail sites and units.
Other development plans include:
1,800 residential units
A complete Reception & Welcome Center and monument entry with 24/7 manned guard gate
Zoning Approvals and Water Rights for around 1800 Residential Units, 54 Retail/Commercial Units, 200 Hotel Units and a Championship Golf Club
Mar residence or hotel
Two separate boutique hotel sites incorporating European-style pedestrian villages
Private Beach Club just 10 minutes away
Choice of restaurants
Multiple mind, body & soul centers
Saltwater swimming and lap pools
Tennis Center
50’ sport fishing boat
Small fleet of private shuttle vans and SUVs
Equestrian facilities
On-site organic farming and livestock facilities Tennis Center
Nature trails
More than $20million of cash has been invested to date, and the project currently has around $7million liquidatable “non-essential” real estate holdings and there is no third party debt.
The Wyndham Papagayo Yu Hotel and Private Residence Club consists of 10 three and four-storey buildings with a unique design which allows accommodation configurations ranging from spacious hotel rooms to one bedroom condos to a large two bedroom residences.
The project has achieved $699,000 pre-sales in 55 days and its sales and marketing program is supported by the Solidarity Association of Employees of the Costa Rican Department of Social Security (ASECCSS). ASECCSS was founded in 1983 and is effectively Costa Rica’s strongest Credit Union.
Resort amenities will include: swimming pools, a mini golf course, a tennis court, a basketball court and a miniature soccer field, a full-service restaurant, conference and meeting room.
The Wyndham Papagayo Yu on a terraced hillside of 7.5 hectares (18.5 acres) which will be owned as a 32-year concession (land lease) with 20-year renewals included.
The project includes $699,000 pre-sales in 55 days and the project’s sales and marketing program is supported by the Solidarity Association of Employees of the Costa Rican Department of Social Security (ASECCSS). ASECCSS was founded in 1983 and is effectively Costa Rica’s strongest Credit Union.
As of July 2015, ASECCSS had more than 40,000 associates, of which more than 20,000 have a credit profile to qualify to purchase vacation ownership interests.
A marketing and finance agreement between ASECCSS and the Wyndham Papagayo Yu has been signed whereby ASECCSS guarantees, for the first 10 years of the project, to provide up to 100% purchase financing for their qualified Associates who wish to purchase Vacation Ownership Interests from the project.
“Investing in Costa Rica is not like investing in the States or Canada. You can’t just buy anywhere. You have to pick your spots carefully,” advises Mr Disick.
“The government of Costa Rica, compared to other Central American countries, is very well off and politically stable. But they do not have an unlimited supply of money. So when they decide to focus on an area, like they have in the Guanacaste/Papagayo Region, they have to make sure it succeeds.
“The government has decided that the Papagayo Region is where almost all of their tourism and economic development dollars will be going over the next 10 years. Further, they have invested tens of millions into the region upgrading the current infrastructure: roads, municipal water, telephone, internet and cable and satellite TV over the previous decade.
“The government has also supported hundreds of private/foreign investment projects from golf courses to resort hotels to marinas with financial incentives and tax benefits. These incentives continue to be made available for companies providing hotel services, air transport, car rental, gastronomy services, travel agencies, and other tourism related services.
“Most importantly the Costa Rican Government has dramatically expanded the Liberia Airport to handle the rapid growth in incoming traffic.”
In 2014, more than 750,000 passengers arrived at the Daniel Oduber International Airport, which broke all previous records and provided a clear sign that Guanacaste’s tourism industry is continuing to grow.
The Papagayo Region has seen consistent growth in real estate values and tourism of about 20% per year for the last five years., says Mr Disick.
“Things obviously cooled down significantly during the economic downturn in 2008, but in the last 3-5 years the market has been steadily growing and showing signs of making another significant break upwards making this one of the hottest investments going.
“We expect to see this same kind of growth over the next five years as hundreds of millions of dollars will continue to be invested in the region.
“To borrow an analogy from the US Banking Bailout, the Guanacaste/Papagayo Region has become ‘too big to fail’ for the Costa Rican economy.”
David Disick can be contacted on + (1) 321-594-8329 or by email at david.disick@thefractionalconsultant.com and Thomas Fulton on + (1) 480-489-1811 or by emailing thomas.fulton@sothebysrealty.com.
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