Property • Interiors • Architecture • Gardens House^Home Anyone for a terrace? Forget Babylon Ana Alban Wimbledon: Where was the Ecuador’s ambassador village versus town Hanging Garden? on Julian Assange UK property Page 3 Robin Lane Fox Page 16 At home Page 2 FTWEEKEND | Saturday June 22 / Sunday June 23 2013 A five­storey illumination of Che Guevara in An estate agent, identity concealed at her Havana’s Plaza de la Revolución request, advertises a property in Havana Cuba’s real estate rumba The country is finally allowing its people to buy and sell homes – but property agents and lawyers are still illegal. By John Arlidge Andrew Macdonald of Esencia, who wants to build Cuba’s first golf course since the revolution Photographs: Mark Read t’s only 9am but it’s already 33C “deposit the rest in an account in property assets that have been frozen on the Malecón, Havana’s cor- Spain, please”. I must not talk about in place and time, unvalued or under- niche, and my brain feels like a the true price because, under new valued, are now up for grabs. conch fritter. I’ve come to meet laws, anyone caught lying about the Raúl Castro’s move is the latest – a man who we will call Rafael – price of property goes to prison. Also, and boldest – step in a slow economic Ibecause that’s his name. But that’s I must not reveal the name of the liberalisation programme designed to the only part of his name he is pre- lawyer who does the paperwork generate economic growth. Cuba pared to reveal. Rafael is an estate because working as a private property desperately needs new sources of agent but he does not want anyone to lawyer is illegal. revenue. It is only kept afloat thanks know it. “Being an estate agent is ille- Undercover estate agents? A legal to cheap oil, and other subsidies worth gal here,” he says. system that is illegal? Jail for lying $5bn a year from its ideological ally, Rafael, 44, wants to show me a pent- about house prices – which everyone Venezuela. The subsidy deal was house for sale. He says it is worth the world over does? Welcome to the agreed by Fidel Castro and former $2.5m but no one, not even he, really oddest property market in the world. Venezuelan president Hugo Chávez, knows the right price because no one Welcome to Cuba. who died in March. If Venezuela’s new has bought or sold houses here for 54 Half a century after Fidel Castro’s president, Nicolás Maduro, renegoti- years. “The market changes wildly government expropriated all private ates the agreement – and many ana- every day. It’s emotional,” he smiles. property, the sunshine socialist state lysts say that, with Venezuela’s econ- If we do agree a price, Rafael will is up for sale – in part. Raúl Castro, omy slumping, he has no choice – advise me not to buy the penthouse in who took over as president from his Cuba will grind to a halt. the normal way. Instead, to avoid ailing brother in 2008, has introduced After half a century in which they tax, I should pay him a nominal new laws that allow Cubans to buy could only swap houses in a creaky, amount locally, say 20 per cent, and and sell homes. Billions of dollars in bureaucratic and often corrupt state- I must not talk about the true price because anyone caught lying about the price of property goes to prison run process known as permuta (exchange), which involved finding two properties of roughly equal value and then getting state approval to transfer the title, Cubans are relishing their new-found economic freedom. First-in-a-lifetime buyer Guillermo Rey stands next to the scruffy portico of a four-bedroom, three-bathroom house in Vedado, Havana’s most high- end, fashionable district. The price, says the owner Rosa Marin, is 350,000 CUC, or convertible pesos, Cuba’s hard currency, which is roughly equivalent in value to the US dollar. She is selling because she wants to move into a smaller property “and buy my daugh- ter a car, a good one, a Lada”. It is a scene repeated all over Havana. The market is growing so fast that queues form outside the tum- bledown offices of Cubisima, a Havana-based property sales website. “Every day we get more people look- ing to sell and more people looking to buy,” Mayelin Aguilar tells me as she keys the latest listings into her bulky Cine Yara, a Havana cinema built in the 1940s Continued on page 14 JUNE 22 2013 Section:Weekend Time: 19/6/2013 - 17:30 User: woodwardj Page Name: RES1, Part,Page,Edition: RES, 1, 1 14 ★ FINANCIAL TIMES JUNE 22/JUNE 23 2013 House^Home Cuba’s real estate rumba Continued from page 1 Russian-built desktop computer – so old it still runs Windows 95. The tree-lined Prado is polka-dotted with estate agents, their listings writ- ten in longhand in school exercise books. Their commission? A whop- ping 5 per cent – if, that is, the buyer An artist’s impression of Esencia’s $350m Carbonera, which will offer Conran­designed homes pays up. With estate agency not on the approved list of private businesses Cubans can now set up, buyers know agents have no recourse to law, so many simply refuse to pay. “I’m lucky if I get commission for one deal in five,” says one agent. Some 45,000 homes were sold in 2012, according to Cuba’s National Statistics Office. Observers say infor- mal deals take that number to almost 100,000. Prices range from $10,000 for a small, run-down flat in Old Havana to $500,000 for villas in sought-after dis- tricts, such as Siboney and Miramar, and more than $2m for penthouses in modern blocks. The average price last year was just $16,000. The Cuban on the calle is still desperately poor. This being Cuba, the conditions sur- rounding home sales are complicated and, occasionally, bonkers. The law says that only Cubans and permanent residents can buy and sell property and they must limit themselves to one main residence and, if they have the money, one holiday home. Raúl Cas- tro does not want Cubans to become property barons. Nor does he want to encourage armies of foreign investors, especially An estate agent’s listings on the Prado Foreigners can buy property in the Atlantic Building on the Malecón Photographs: Mark Read the many arch-critics of the regime, to descend on Havana and buy it up, Other overseas investors get around But he might have an ace up his block by block. But, thanks to an the restrictions by giving money to a linen guayabera shirt – or, rather, early flirtation with capitalism 20 Cuban friend, or more often, girlfriend, 130km down the cracked highway years ago, there are a few apartment to buy a property – although, when from Havana in Varadero. It is Cuba’s buildings in Havana where foreigners the deal is completed, some swiftly dis- “touristic zone”, a ghetto of white can buy. The best are in the Atlantic cover that their girlfriend is no longer sand and whiter westerners, who sip Building, a 25-storey tower on the their girlfriend. “I took a risk and it mojitos and snap up Che Guevara Malecón, where Rafael shows me the failed,” sighs one Dutch-born investor, T-shirts without bothering to wonder penthouse he says is worth $2.5m. whose $400,000 “home” in the fashiona- what Che would make of them splurg- Few want to say so publicly but some ble Kholy western suburbs is now ing their Yankee dollars on a swanky are being snapped up by Miami-based home to his former girlfriend and her beach holiday. Cubans, via local relatives, making it extended family who cannot believe “This is where the £1.5m villas will difficult to divine whether the émigré their luck – and his naivety. be. And, over here, right next to an Cuban or the relative is the real Tax is troublesome, too. Both sellers 18-hole golf course, is where the coun- buyer. President Barack Obama and buyers must pay 4 per cent but try club will be,” says Andrew Mac- recently relaxed the restrictions on most disguise the value of deals to donald, striding across the scrub in foreign remittances from Cubans liv- reduce the liability. Raúl Castro’s canary yellow shorts. The Scots-born ing in the US. Up to $5bn a year now dream of generating much-needed entrepreneur runs Esencia, an Anglo- flows into Havana and much of it tax revenue from home sales is, so far, Cuban firm, that wants to build ends up in bricks and mortar. A couple dance the salsa in a doorway in Old Havana a forlorn hope. Part of the Tarara Villa complex Cuba’s first new golf course since the JUNE 22 2013 Section:Weekend Time: 19/6/2013 - 17:32 User: woodwardj Page Name: RES14, Part,Page,Edition: RES, 14, 1 FINANCIAL TIMES JUNE 22/JUNE 23 2013 ★ 15 House^Home Macdonald wants to build 150 coloni- al-style ocean-front villas and 670 apartments. Prices for the apartments Design will start from $2,700 per sq metre and range from 75-140 sq metres. The villas will cost $3,750 per sq metre and range from 350-600 sq metres. Six-hundred The Wassily investors have registered an interest, Macdonald says. Buyers will have what passes for freehold title under chair Cuba’s nascent property laws, and will be able to rent out their property.