Fairmont revamp and Riddell’s Bay development offer opportunities
by Jonathan Kent
Construction is not work that can be done remotely, so the industry ground to a complete halt in April’s shelter-in-place period. But it has stabilised since then and has reasons for optimism looking ahead to 2021.
With a slew of major projects completed, such as the new passenger terminal at LF Wade International Airport and Belco’s new North Power Station, and another, the new St Regis hotel in St George’s almost finished, some might wonder: what’s next?
However, Alex DeCouto, of Greymane Contracting Ltd, believes there is work in the pipeline coming from several sources.
Mr DeCouto says construction “is what happens when people have enough confi- dence to make substantial investment in physical plant”.
“I don’t need to tell you the reasons why Bermuda might be seeing an uptick in inves- tor confidence at the moment,” Mr DeCouto said. “Our handling of the pandemic has sure- ly caught the eye of some people who value that kind of safety.
“We are also seeing lots of movement
in the reinsurance industry in the form of takeovers and new businesses that could po- tentially fuel an increase in employment and physical presence on island. The ‘why’ might be up for debate, but on the face of things I would say that we have reasons to believe that investor confidence is ticking up.”
On the residential side, confidence also ap- pears to be on the up, Mr DeCouto said, with anecdotal evidence of healthy demand, some of it stemming from the work-from-home phenomenon.
“Whether it be for the digital nomads or people looking to improve their ‘at-home’ experience, the chatter I am hearing from ar- chitects and contractors is that their forward order books are quite busy,” Mr DeCouto said. “I’ve also seen flashy adverts teasing the new development at Riddell’s Bay, which should create a bunch of new-build opportunities.”
Permission to develop homes on 18 lots on 23 acres on the site of the former Riddell’s Bay Golf Course was given under a Special Development Order in June.
There is also one large, commercial project looming, the $100 million refurbishment of the Fairmont Southampton before it reopens in April 2022.
Mr DeCouto said: “All indications seem to be that they intend on pressing ahead with a substantial renovation of the entire property. This is obviously good news and I am keeping my fingers crossed for this one for Bermuda.”
While that is the only “megaproject” the Greymane boss sees on the horizon, he added: “I would almost rather see a ‘rising tide’ of local commercial property investment, as it will be like having more eggs in more bas- kets and will be indicative of rising business confidence.
“While it might be hard to envision a return on investment in a retail store or a restaurant at the moment, there are other businesses that are doing well and might benefit from physical investment.”
The pandemic has thrown the future of the office, as the traditional workplace, into some doubt, as businesses adapt to having staff working from home and physically distanced on site.
Mr DeCouto is not convinced employers will give up altogether on the office. From his own experience with his office-based staff, he said having them together in the office for at least some of the week was “much more efficient and effective than working 100 per cent remotely”.
“I’m not exactly sure at this point what the impact will be on the traditional office layout, but I do know that any change is likely to result in construction work,” he said. “From that perspective I have some optimism that investment in office reconfiguration will see an increase in 2021.”
Another traditional source of construction work is government capital projects. The need for emergency funds to deal with the social impact of the pandemic put the squeeze on public-sector capital spending in the spring. Since then the Government has bolstered available funds through a $1.3 billion bond issuance.
Curtis Dickinson, the finance minister, said last month that some of the proceeds will be used to bring forward some aspects of the Government’s long-term capital plan. “These capital projects will support our economic re-
covery, provide employment for Bermudians, while improving our quality of life,” Mr Dick- inson said. The Government would provide up to $90 million for capital investment focused on construction projects for the fiscal year 2020-21, he added
Mr DeCouto said: “The Government’s position is rather delicate when it comes to capital projects, especially as PPP [public-pri- vate partnership] projects have been heavily politicised. That’s a pity, because I think there may be more opportunities with private finance in the future.
“They maybe have seen potential with this new arbitration centre on Parliament Street which seems to be using a lease-back model. I would have liked to have seen this opportu- nity presented to local developers and am not sure why it wasn’t.”
