CUBA: Mixed Property Business Moving Forward

By Dalia Acosta Reprint | | Print |

Dalia Acosta

HAVANA, Aug 2 1996 (IPS) - The government of Cuba has reaffirmed its liberalisation policy with a new wave of foreign investment in property, though the obstacles are also getting bigger.

In an act which appeared to mock the Helms-Burton bill’s attempts to scare off foreign entrepreneurs, President Fidel Castro inaugurated the first property business opened on the island in the last 30 years.

“This type of company will have a good future outlook in this country,” Castro told the press during a tour of the old trade exchange in the heart of old Havana.

This buiding, first built in 1909 was restored in less than a year by the mixed company Aurea, an association of the Spanish banking concern Argentaria and the City Historian’s Office of Havana.

The trade exchange refurbishment cost a total of 13 million dollars, and will be let out as offices to foreign companies interested in investments or trade in the island.

The complex offers all the modern services this type of company could require.

The company also restored another nearby building, dating from 1906, which was converted into a five floor car park with room for 166 vehicles.

This project allowed two important buildings of Old Havana, declared as human heritage sites by the United Nations Education, Science and Culture Organisation (UNESCO), to be recovered, forming a new source of hard currency for Cuba.

The conditions of business of the new investment law mean Aurea will be able to administer the building for the next 25 years, after which they can extent the contract for a further 25 if they are still interested in doing so.

Cuba’s vice-president Carlos Lage, first announced the nation would be opening up to foreign business in October 1994, during the inauguration of hte 10th Havana International Festival.

However, the new Foreign Investment Law was only approved last September, providing a legal framework for foreign citizens to acquire property.

Aurea was created under this law, and the Historian’s Office founded its own property company under the name of Fenix, along with the co-operative known as Real Inmobiliaria S.A..

“There’s too many properties, too little money,” said a specialist from the Habaguanex company, associated with the Historian’s Office, but he recognised that for the moment, projects in the human heritage area had been restricted to the restoration of attractive buildings for their exploitation.

Meanwhile, the Real Inmobiliaria S.A., a Cuban association with the Property Societies of the Pricipate of Monaco which, with 200 millions from Spain and Italy, will build 600 luxury apartments in a residential area of Havana.

These will be the first buildings of the type built in Cuba in the last 36 years, at a cost of around 1,000 dollars per square metre, a project aimed specifically at foreigners based on the island.

“We are thinking in everything and of everyone,” one official told IPS, assuring that the company may seek clients amongst Cubans on the island, and those resident abroad.

Business sources stated that the real estate sector in Cuba could attract investment of more than 1.2 billion dollars in the next five years.

However, the backlash of the Helms-Burton bill could take its toll, starting with the restoration project of a building to be occupied by the Bakardi rum company.

“We must not underestimate the obstacles,” said Castro, recognising that the US bill has already started to damage the nation even before it was approved.

However, Lage confirmed that even after the Helms-Burton bill was approved, another 25 new associations were formed with foreign capital and another 140 projects are in the planning stages.