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‘Land Disputes is One of the Main Problems for Investors in Vanuatu’

‘Land Disputes is One of the Main Problems for Investors in Vanuatu’
‘Land Disputes is One of the Main Problems for Investors in Vanuatu’
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C&K Director on land disputes in Vanuatu, real estate, Air Vanuatu and infrastructure development

Loic Bernier, the Managing Director of Vanuatu’s Caillard & Kaddour Group, in this exclusive interview for Vila Times shares his experience of doing business in Vanuatu for almost three decades, talks about big development projects, Air Vanuatu, and says the new airport should put Vanuatu on the world map of popular tourist destinations.

 

– Hi Loic. Could you tell me a little bit about yourself? What year have you arrived in Vanuatu?

I first arrived in Vanuatu in 1989. I used to be a primary teacher, so I started as a teacher in Port Vila’s French school. At that time in France we had to do a compulsory military service, so I did the military service in Vanuatu as a volunteer teacher. For two years. And after that in 1990 we started the Caillard & Kaddour firm. And since then we have been developing Caillard & Kaddour.

 

‘Port Vila in 1989 was very different from the way it is now’

 

– How was it here at that time – end of 80s–90s?

It was very different from what you see here now. Port Vila was much smaller. When I first arrived on Saturday morning the Port Vila’s main street was empty. It was late morning I think, and the main street was completely empty – no traffic, very quiet. And on Saturday lunchtime everything was closed for the rest of the weekend. The city was much more quiet than nowadays. Today it’s busy, a lot of traffic and many people. At that time there were no cruise ships here, only one was coming once a month. So not many tourists.

 

‘Today you see a lot of investors coming for short term deals. I think in 1990s people were looking for long term investments more’

 

– It seems to me that new foreign investors coming here in late 80s – early 90s actually were smarter and more “professional” than the ones coming to Vanuatu these days. Or not?

It’s hard to tell, but the difference is that in 1990s there was a lot of interest in Vanuatu coming from New Caledonia. In early 90s we had Maxime Carlot as the first Vanuatu francophone Prime Minister after independence. So they had a lot of interest from people in New Caledonia to come and invest in Vanuatu. The investors came here, established themselves and brought a number of companies that are still in Vanuatu now. Those investors back then were long term investors. Today you see a lot of investors coming for short term – come, make a deal and go. I think at that time people were looking for long term investments more. Like Caillard & Kaddour – established in 1990, and in 2018 we are still here. There are a lot of businesses around Caillard & Kaddour nowadays.

 

– What are the assets that are part of the C&K Group nowadays?

C&K Group was originally a real estate agent doing property management and sales. Over the years we have done some property development ourselves and assisted some of our clients in their property developments. Our latest project is the Ramada Hotel, which is a part of C&K Group. This is probably our biggest investment in Vanuatu today. We have also invested in Chantilly’s on the Bay, Banyan bar is also a part of our group. Some of our shareholders also have some other businesses in Vanuatu, that are not a part of C&K Group, in a number of different sectors.

 

‘There is a way to deal with land in Vanuatu and there is a way not to deal with land here’

 

– Vanuatu’s real estate market. A lot of people complain about the lack of proper rules and regulations there.

I think the market is actually regulated. There are land laws, there is the Land Leases act. There is a way to deal with land in Vanuatu and there is a way not to deal with land here. We as a real estate agency always make sure that people who come to our office are getting the right deal, and have their land registered.

Yes, with private deals sometimes people are missing the right track, and they usually end up with problems. Contacting a real estate agent is normally the way to go. When investing in a house or land and spending a big amount of money you should make sure you follow the right rules. We know what is going on, and we always try to make sure we do the right thing for our client.

 

– There are lots of crazy stories around the real estate and land sales here.

There are stories, always. About some land sold twice or three times by the same people. Or people having a lease and other people selling the same land. That happens still, today. It is not supposed to happen. The only way to make sure this does not happen is if you have someone to check the title first. But it’s not only in Vanuatu, it happens everywhere. Everywhere you can have a deal not going through because of dishonest people.

 

– The Ramada resort is C&K’s biggest investment in Vanuatu? What was the total size of investments in that project?

Over 2 billion vatu – around AUD$30 million.

 

‘In our group we think tourism is the most important in Vanuatu, and in the future it will be the key for development of the country’

 

– So what would be the expected time frame for the return of investments in this project?

It is a large investment, and in our group we think tourism is the most important in Vanuatu, and in the future it will be the key for the development of the country. So we have invested in two hotels, and now we have also invested in another tourist business called “16 degrees South,” which is a short term management of villas, vacation rentals. Just two weeks ago we have made this investment.

 

– 16 degrees South?

Yes, there is also the web-site – 16degreessouth.vu. It’s all about people coming to Vanuatu and not willing to go to a hotel, so they can rent a house from us, and we will welcome them in the house, 3-4 bedrooms, so they could come and spend a week in Vanuatu, having their own house, and do whatever they want.

We make sure people are booking a house for a week through us, so we will pick them up at the airport, show them the house, organize everything they may need – a chef, or massage, or if they want to have a tour we can organise a tour for them. And at the end of their stay we will take them back to the airport, clean the house and make sure it is ready for the next customer.

 

– So this new venture is also a part of the C&K Group?

Yes.

 

– I know you have also joined the Board of Directors of Air Vanuatu, right?

Yes, in November 2017. The Board members of Air Vanuatu are generally business people and politicians, so being in business and tourism in Vanuatu, I have been appointed as a Board member of Air Vanuatu.

 

‘At the moment Air Vanuatu is very profitable’

 

– Air Vanuatu is a profitable airline nowadays, right?

Yes, at the moment the company is very profitable, and I think we will make even higher profit in the next few years. It is right on track, and the forward bookings look very promising for the next few months, and the whole year – 2018 – looks quite promising for Air Vanuatu. I don’t see any problems with the company that could potentially stop it from making nice profit. It did actually make a profit in 2017 – almost 300 million vatu.

 

‘The improvement of the airport should put Vanuatu on the world map up till Asia’

 

– Many investors in the tourism sector in Vanuatu have high hopes for the airport rehabilitation project to bring more tourists after completion. Are you among them?

The tourism in general does put a lot of hopes in the airport project. The airport is the key to bringing people in Vanuatu. You know that until now we only have one runway that can only accommodate small planes – 737, eventually 767 but not a regular flights. So the improvement of the airport should bring Vanuatu on the world map up till Asia, which is a big market for Vanuatu. Hopefully we will keep our normal routes – Australia and New Zealand, which are the main tourist markets for all the Pacific island countries, – and will be able to open new routes to Asia, and from Asia we could reach Europe too. If you could go to Asia from Vanuatu directly, then you would be able to get straight to Europe with one stop in Asia. While at the moment it is very hard, because you have to go through Australia. Too many stops. Right now most Europeans do not go to the Pacific because of the long and complicated flights primarily.

 

‘Having a new airport will probably bring more investments in the hotel industry’

 

– But if big international airlines will come to Vanuatu, it will at the same time bring a lot more competition for Air Vanuatu?

I don’t see that as competition for Air Vanuatu. Air Vanuatu will eventually make deals with those airlines also. We can have code share deals with those airlines. So Air Vanuatu will eventually sell tickets to destinations in Asia. And we will still be able to keep our routes to Australia and New Zealand. So in fact that is a way to develop Air Vanuatu as it is a way to develop the country. Having a new airport will probably bring more investments in the hotel industry. I think with Asia being on the map we should have more big brand hotel chains, and once Vanuatu is on the world map, then we will be getting a lot more tourists. A lot of people, wherever they go, stay only in big brand hotels, not in private ones.

 

‘Right now the hotels in Vanuatu have maybe 50-60% occupancy’

 

– What are the main priorities for Air Vanuatu today?

For the last three years Air Vanuatu has been struggling after TC Pam. Because TC Pam brought Air Vanuatu quite a lot of expenses that were not planned – reimbursement of tickets, and other things. I think now Air Vanuatu really should focus on making sure we have no free sits available in our planes, and keep growing, get the second aircraft to accommodate more seats to Vanuatu, to be able to develop and fill the hotels, which are not full at the moment. Right now the hotels have maybe 50-60% occupancy. So we need to make sure the hotels are at least 80 to 90% occupied. This is Air Vanuatu’s role – to bring people into the country, and if our planes are full as they are now, then we should get more planes to be able to have more flights.

 

– The Ramada resort project was started and financed before TC Pam, right?

Yes, we started building in 2014, when TC Pam came we had the ground floor completed, so we kept going and finished the hotel last year.

 

‘It is probably a better time for investments in tourism now than it was in 2014-2015’

 

– If this project had been under the consideration now, in 2018, would it still be a go?

I think it would still be a go. Actually, it is probably a better time now than it was in 2014-2015. This year we will have a new airport, new terminal. I think the future looks better now. The Ramada is a small hotel compared to other big chains around the world, it is only 80 apartments. But Wyndham, the brand behind the Ramada, is actually one of the biggest chains in the world. And this is important for the country, because today Vanuatu is on the map of Wyndham, so Vanuatu is on their web-site next to other popular destinations like Melbourne, Sydney, New York and other big cities.

 

‘We need to modernise the city so Port Vila would be more welcoming for tourists’

 

– What are the most important steps in the future development, in your opinion?

Port Vila needs more development of the public infrastructure. The airport, roads, drainage needs to be completed and finalised. And I think Port Vila’s city center needs to be next. Pedestrian sidewalks in town are just a nightmare for lots of people, older people especially. They need to be redone as well. The overall look of Port Vila also needs to be changed a little bit. It’s a bit old fashioned, we need to modernise the city – add some places to sit and to relax, parking. So Port Vila would look more welcoming for tourists. We have gotten a good infrastructure now with the new wharf, the airport rehabilitation is ongoing. I think the next phase should be to develop the other islands also. To make sure people can go to Santo, Tanna, Malekula, Pentecost – all the biggest islands. For that we need to make sure they have proper airports. So tourists would be able to travel to other islands as well, not just Port Vila.

 

‘If we have routes to China, then we have Chinese investors building hotels here. That’s how it works’

 

– What are your views on the big tourist developments in Vanuatu financed by the Chinese investors?

If we have routes to China, then we have Chinese investors building hotels here. That’s how it works. So if Chinese are building hotels today, we could expect new routes to Asia and China.

 

‘Too many land issues is one of the main problems’

 

– Right now, what are the main threats to Vanuatu’s economy growth?

There are still land issues. Too many. It is not always easy to deal with land issues, and that is a problem for many investors. And will remain a problem. Also the long processing of everything here in Vanuatu. Everything takes time. In some countries within a month you can do things that here take probably 3-4 months. Very slow, so we need to improve in the way how all business is being done. Those are two main problems I think.

 

‘There are land disputes everywhere, on every island’

 

– Are there some “famous” land disputes, maybe particularly interesting cases?

There are land disputes everywhere, on every island. We sell a property and the day after we settle we have a custom owners coming and claiming they are also the custom owners. So you sell the property to someone who ends up dealing with a custom owner we didn’t know of before. And that happens often.

 

‘Is there a solution for land issues? I really don’t know’

 

– Is there some universal solution for these issues?

It is very hard. Normally, once the custom owner has been recognised, that should be the end of it. If a family has been recognised as the custom owner for the piece of land, it should be the end of it, and the investor should have the security. But too often after a custom owner has been registered as the custom owner for the land there is another case coming up that cancels the first one, and the new case is up. So at the end investor sometime doesn’t know whom to deal with. The solution – I really don’t know.

 

– So you have been here for almost 30 years now. No regrets?

None. I wasn’t going to stay here for 30 years. I came to stay for two years and it’s been nearly 30 years now.. No regrets. I have grown my children here, they are now gone and are living elsewhere, but I am still busy and still enjoying my business. I think it’s a good life.

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