Cuba invites foreign investors into beach resort

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By Daniel Thomas in London

Overseas private investors and homebuyers are to be given a rare chance to buy Cuban real estate in a move that marks a further loosening of the economic constraints imposed on the island since Fidel Castro seized power 50 years ago.

Cuba is set to offer investors the chance to buy an apartment in an exclusive beach resort on the north coast. The leasehold will initially be for 75 years, although the resort's developer hopes to be able to convert it into a freehold.

Andrew MacDonald, chief executive of Esencia, said Cuba's only previous foray into overseas property sales is believed to have involved a handful of leaseholds in the capital Havana eight years ago. "We are in the final stages of the project with the government, and hope to be started before the end of the year," he said. "The Cuban tourism market is growing strongly, so we anticipate significant interest in this."

The Carbonera Club will be a luxurious beachfront resort an hour's drive from Havana, near the tourist destination of Varadero. It will include a hotel, spa, 18-hole golf course and yacht club.

The resort, which is being marketed by Savills, the estate agency, is expected to ask for a minimum of $1,500 (€1,107, £992) a square metre for the most basic apartments. The designer is Sir Terence Conran and the architect is Rafael De La Hoz. Construction will be completed in 2011.

Savills said there was likely to be little or no sales or capital gains tax, which would make it attractive to investors. The government says it is planning to open a series of hotels and resorts to improve tourism, one of its top-earning industries, over the next few years.

The Caribbean island attracted more than 2m tourists last year, many from the UK and Spain. The resort will also be marketed in Canada, which unlike the US is not subject to travel and trade restrictions.

Mr Castro nationalised private property when he seized power in the late 1950s, but Cuba has been moving towards a freer market economy in the past few years. He transferred leadership to his brother, Raúl Castro, in 2008.