Property values and rents in Trinidad and Tobago have been hit by broader economic headwinds

The Trinidad and Tobago real estate market’s fortunes have long been tied to those of the oil sector. Between 1991 and 2006 house prices more than quadrupled as the country’s hydrocarbons and petrochemicals industries grew strongly. This stoked a construction boom that led to the rapid development of grade-A office and residential properties. Following the 2008 financial crisis prices dropped by 20% but recovered strongly up to 2014, with residential properties reaching 8.7% year-on-year growth by the third quarter of 2014.

However, falling oil prices have since led to a slowing economy, and the exit of foreign workers and companies. An oversupply of grade-A residential and office space has depressed rents and valuations. Meanwhile, affordable housing projects have seen cost overruns and industrial estate projects have been slow to get off the ground.


Laws and regulations for T&T’s housing and real estate industries are promulgated by the Ministry of Housing and Urban Development, which oversees a number of agencies in charge of developing real estate projects.

The Urban Development Corporation of T&T (UDeCOTT) was formed in 1994 with four objectives: developing the capital as a centre of business and finance; regenerating the city of San Fernando to create a hub for the energy industry; the promotion of 13 centres identified in the National Physical Development Plan; and construction management for major projects in security and health. The Housing Development Corporation (HDC), created in 2005, has the goal of providing affordable housing to low-to-middle-income first-time buyers. In addition, development of non-energy-related industrial real estate projects is the responsibility of the Evolving Technologies and Enterprise Development Company (e-Teck) which falls under the Ministry of Trade and Industry.

Office Space

The low oil price and the subsequent slowdown in T&T’s economy have had knock-on effects in real estate, with demand for prime office space and expatriate-focused residential rentals falling sharply. “Three or four years ago there was continual and strong demand for grade-A and grade-B office space in Port of Spain, particularly from oil, petrochemical and associated service companies, but in the last year we have seen firms reducing staff and giving up space,” Jean de Meillac, general manager of regional property sales and brokerage practice Terra Caribbean, told OBG. Falling demand is coming at a time of rising supply. Five major office projects reached completion in 2015, adding between 300,000 and 400,000 sq feet of space to the market, according to de Meillac’s estimations. Many of these blocks had low occupancy rates in early 2016. The government does not provide statistics on vacancy rates but Terra’s own real estate survey suggests that there will be a 20% oversupply of premium office space during the second half of 2016.


Typical monthly rents for grade-A office space are at TT$14-20 ($2.16-3.08) per sq foot, with an additional common area maintenance charge of TT$4-6 ($0.62-0.92). Companies then need to pay value-added tax of 12.5% on top of the all-inclusive rent. These prices represent a 30% rise since 2010, according to de Meillac.

At present there has been no reduction in rental rates as the major property firms are prepared to absorb higher vacancy rates. “It is hard to estimate the effect [of low oil prices] on rents because there is simply no market,” Sharon Inglefield, CEO of Massy Realty, a local real estate agent, told OBG. “With no one looking to take office space we can’t judge how far the asking price has come down.”


There is also an oversupply of government buildings at present. The Government Campus Plaza in downtown Port of Spain was completed in 2009, but under the previous administration several of the buildings were left unfurnished and unoccupied. However, under the People’s National Movement (PNM), which originally commissioned the development, efforts to fit and staff the plaza have picked up under the supervision of UDeCOTT using local contractors. For example, a 10-storey tower was fitted for the Customs & Excise Division at a cost of TT$115m ($17.7m).

In mid-2016 work was under way in the outfitting of a 23-storey tower for use by the Ministry of the Attorney General and the Ministry of Legal Affairs at a cost of TT$260m ($40m). The second 10-storey building was being outfitted for the Immigration Division for TT$70m ($10.8m). The final 23-storey tower will be for the Board of Inland Revenue with a budget of TT$233m ($35.9m) and a scheduled completion date of October 2016. “When the government occupies the Campus Plaza offices they will leave their existing grade-C offices, creating a glut in that segment,” said Inglefield.


As rising numbers of expatriate workers leave T&T, new tenants for their properties are in short supply. As a result rental rates have dropped by 30% in the last two years, according to estimates by both Inglefield and de Meillac, and owners are upgrading their properties in an attempt to attract renters.

“The drop in rental rates has been far sharper in the residential sector, as most houses and apartments are owned by individuals. Corporations in office space can hold for longer,” said de Meillac. “An apartment that went for TT$2500 ($385) per month a year ago might not attract tenants at TT$1800 ($277) in the current market.”

One of Trinidad’s most popular expatriate-focused developments is Westmoorings, an area of large houses and high rises located near international schools to the west of the capital. Until mid-2015 the Westmoorings tower blocks were fully occupied. However, in recent months prospective tenants have been able to negotiate rents down by as much as 30%, according to Inglefield.


There is a strong preference for gated communities and high-rise apartments among upper middle-class Trinbagonians and expatriates, mainly due to security concerns and the difficulty of finding reliable contractors to provide maintenance to residential properties. “Most people want to live in a gated community with 24-hour security,” said de Meillac. In March 2016 there was one ongoing gated-community project of 16 units being built in the Maraval district of Port of Spain. “In the coming year we may see small-scale projects, but I don’t think we’ll see major blocks built, no one wants to take that risk,” said Inglefield.

Low To Mid-Range

At the other end of the scale the HDC is responsible for providing affordable housing for low- and middle-income first-time buyers. Of the houses built by the HDC, 75% are for public sale, 15% are reserved for special cases such as senior citizens and individuals with physical disabilities, and 10% are for members of the police, fire and prison services. In September 2014 it was announced that there were 160,000 applications for housing outstanding with the HDC.

In recent years the unit cost of affordable housing has increased markedly. In February 2016 the former minister of housing and urban development, Marlene McDonald, said that between 2002 and 2010 the PNM government built 26,000 homes at a cost of TT$6bn ($924m) for an average unit cost of TT$230,000 ($35,400). According to McDonald, under the People’s Partnership government of 2010-15, 4178 homes were built for TT$5.3bn ($816.2m), with unit prices in the range of TT$700,000-1.2m ($108,000-185,000).

McDonald reiterated the commitment to finish affordable housing projects started under the previous PNM mandate and not yet completed. These include Vieux Fort, in south Port of Spain, Real Spring on the east-west corridor and the Towers in Chaguanas. In total 2200 units are set to be completed in 2016, with another 2184 to be distributed in 2017. These will be constructed at a lower cost because there will be less corruption in the contracting process, according to McDonald.

However, with a TT$2.6bn ($400.4m) liability to be paid off in the HDC, the organisation has been forced to move over to a public-private partnership (PPP) model. In March 2016 the newly appointed minister of housing and urban development, Randall Mitchell, said details of the PPP scheme would be announced in the coming months and should result in a new boom in construction. In May he said 6000 new homes would be delivered by 2018.

Prime Minister Keith Rowley has also signalled the end of high-end units once provided by the HDC. Speaking at the inauguration of 120 units of the Chaconia Crescent development in Diego Martin, he said, “Is that what you expect of the national housing programme? Is it your dream house of TT$4m [$616,000] if you are a professional? The taxpayers of Trinidad and Tobago cannot afford to provide to people who are looking for affordable housing, multi-million dollar homes.”

According to Rowley, the Victoria Keys development, which is also in Diego Martin, had unit valuations of TT$1.6m-4.5m ($246,000-693,000). In late 2015 the government took the decision to reduce the household income limit required for subsidised housing from TT$48,000 ($7390) a month to TT$25,000 ($3850). By refocusing the efforts of the HDC on lower-income Trinbagonians the government will save money by not passing on subsidies to relatively well-off middle class citizens.

Buying Property

Any local or foreign buyer can purchase up to one acre (0.4 ha) of land for residential use in Trinidad. Businesses can acquire up to five acres (2 ha). Purchases larger than that require additional procedures. Since 2007 foreigners have faced much stronger restrictions buying land in Tobago without a special licence. However, the exact requirements of the licence are ill-defined and only a handful of foreigners have bought property on the island. “That law destroyed the Tobago real estate market,” de Meillac told OBG. “A number of foreigners who already owned properties pulled out and went to countries such as Barbados and Jamaica,” he added.

“It’s very difficult to get a licence as a foreigner. We can’t sell properties with this licence,” Inglefield told OBG. De Meillac and Inglefield estimate that property prices on Tobago have fallen by 40-60% as a result of this licence.


The development and maintenance of the country’s non-energy-focused industrial parks fall under the mandate of e-Teck. There are 19 industrial estates in T&T, of which 17 were established decades ago. Around 300 businesses are resident in the parks, with e-Teck acting as landlord to this tenant population. The two newer parks are Point Fortin Industrial Park in the southwest of the country, an 8-ha project with 11 tenants. It was intended to be far larger, over 23 ha for 30 tenants, but the government decided to develop a hospital on a portion of the land.

The largest recent development is Tamana InTech Park, the biggest science and technology eco-business park in the Caribbean with an area of over 445 ha. Located 38 km east of Port of Spain and 18 km east of Piarco International Airport, the park was formally opened for business in June 2015 and its development is a work in progress. Whereas T&T’s previous parks have focused on traditional heavy industry, Tamana seeks to attract investments in industries requiring high levels of technology and innovation, such as ICT, clean technologies, agro-processing and business services industries. The park has robust ICT connections and a dedicated natural gas supply, and by early 2016 had some key tenants. iQor established a call centre with 240 work stations and 69 training stations in the main building, which also houses the e-Teck offices.

The University of T&T is also building its headquarters in the park, with phase one of infrastructure development expected to be completed by September 2016, according to Robert Salandy, president of e-Teck. By the end of September 2016 a further 21 plots varying in size from 0.4 ha to 8 ha will be ready for tenants, with agency InvesTT tasked with finding suitable clients.

However, the agency is likely to take its time in recruiting new businesses to ensure that it gets best-fit clients. “We are at an important juncture in the park’s development,” Salandy told OBG. “The park was designed and built for specific industries, and it is important that we focus on attracting these types of clients, otherwise the benefits of the park may be diminished or lost. Though purpose built, there is a level of flexibility which allows services to be tweaked to meet the needs of the market environment and the clients.”

As the park moves into its second phase of development, it could face financing challenges. The government has not revealed figures for the total investment in the park to date, but the project is behind schedule. “Given the current economic climate, we have to be less reliant on the state and find new and innovative ways to finance the park’s development,” Salandy told OBG. “The park will play an increasingly important role in the development of T&T. As the government focuses on economic diversification, we build the physical infrastructure to cater to the needs of new businesses in the non-energy sectors.”

Property Tax

Property tax for T&T homeowners has been a controversial issue in recent years. Under the previous PNM government, a tax of 3% on residential properties and 5% on commercial properties was proposed in 2010. The measure was met with popular opposition and was a factor in the PNM’s defeat in elections that year.

However, under the Rowley administration, the topic is back on the table as the government looks to boost revenues in the face of falling oil income. In his April 2016 mid-year budget review speech, minister of finance Colm Imbert said that a property tax would be introduced for the 2017 financial year at rates paid in 2009. He said that a team of assessors was gathering land and property valuations for the 40% of properties that have no existing valuation, with a complete land registry expected to be in place in time for the scheduled implementation of the tax.

However, details are scarce about how the tax will be implemented. “The introduction of a property tax is a necessary move for the T&T economy,” said de Meillac, “but the previously mentioned 3% rate would be expensive, especially if applied immediately. We would like to see the tax introduced incrementally and that the system have some sort of flexibility, whereby the tax rate falls in the event of falling property prices. Barbados uses such a system of scaled tax based on prices.”

According to de Meillac the policy would be more popular with Trinbagonians if the tax revenues were to be spent locally on improving road infrastructure and green spaces, rather than going to the general budget. Stamp duty is on a sliding scale, with homes worth over TT$700,000 ($108,000) paying 6% stamp duty on the price.


For low-income Trinbagonians, the key source of mortgage finance is the T&T Mortgage Finance Company (TTMF), owned 51:49 by the National Insurance Board of T&T and the government. TTMF provides lending rates of between 2% and 5%, depending on family income and property values. However, private banks are also active in the mortgage finance sector, deriving their interest rate policy from the mortgage market reference rate (MMRR) – a central bank benchmark which dictates commercial banks’ cost of funds. In March 2016 the MMRR was increased by 25 basis points from 2.75% to 3%, consistently with the overall central bank’s strategy to boost policy rates since September 2014. In December 2014 the MMRR stood at 2.25%. Although commercial banks are not obliged to pass on these costs to the consumer, most prefer to keep their margins intact and increase the rate they charge their customers. If rates continue to rise it could stifle property sales, according to Ingrid Lashley, CEO of TTMF. She told local press: “As the pricing of mortgages increases, affordability is compromised, delinquency increases and ultimately real estate prices would fall in order to ensure sale of properties.” However, in 2015 real estate mortgage loans still increased at a robust 8.9%. This was slightly slower than the 13.4% and 10.8% growth of 2013 and 2014 and mortgage growth is expected to slow moderately in 2016.


Real estate companies in T&T face several challenges inherent in an unregulated market. Consolidated information and statistics are difficult to source and there is a perceived lack of transparency in public housing transactions.

In a country as small as T&T the loss of a few international companies as a result of the depressed oil market can have substantial repercussions in terms of demand for both office and high-end residential properties. For excess capacity to be bought up will require either a positive turnaround for the oil industry or the successful diversification of the economy to create more demand for office space. Should the government be successful in its efforts to expand the scope of HDC’s PPP arrangements, the low-end residential market could become a private sector investment destination in the short to medium term.


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The Report: Trinidad & Tobago 2016

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