Grupo Questro CEO still bullish on Cabo
Grupo Questro is a major developer in Mexico, and particularly in Los Cabos, where three of its properties – Puerto Los Cabos, Cabo Real and Club Campestre – encompass 5,500 acres. Eduardo Sánchez Navarro, CEO of Grupo Questro, talked with Golfweek about those properties and the outlook for Los Cabos.
Golfweek: How has the Cabo market changed since your company got involved there in the 1980s?
Sánchez Navarro: There used to be nothing in Los Cabos – maybe a couple of hotels, few people traveling there, maybe 5,000 people living in the area. Some of the important things that have happened is that Los Cabos has been developed through integrated developments. At the beginning, you had three really big integrated developments: Cabo del Sol, Cabo Real and Palmilla. When you do integrated developments, the place comes out better because you don’t have segregated parcels. Also, 15 years ago we did the master plan for the whole Los Cabos area. That was very important because it didn’t allow people to come in and do high-rises and allowed us keep it low-density, high-end development. . . .
I think another important point was when we privatized El Dorado. It used to be public, but we privatized it with the guys from Discovery Land Co. It has been a huge success in that it has pushed Los Cabos to another level in the prices and the people that we have, and also in being in the eye of everybody.
Golfweek: What will be the impact of the G-20 economic summit that’s being held in Los Cabos in June?
Sánchez Navarro: First, it speaks very well of Los Cabos. It says that you have great security, great weather, great infrastructure to hold this kind of event. Plus, you have the 20 most important presidents and financial secretaries, so it will put Los Cabos in the eyes of everyone. Plus, it will leave a lot of money in Los Cabos because the hotels will be packed. But the most important part is the perception of Los Cabos.
Golfweek: Do the security problems elsewhere in Mexico harm the perception of Los Cabos?
Sánchez Navarro: The perception of security in Mexico is not very good because we’re having a lot of problems in the border cities with this war against the drug cartels. The other day an American friend who has properties in Los Cabos told me someone asked him, “Why are you going to Mexico? You have this big house (in the United States), and you’re going to Mexico every two months. The security in Mexico is horrible.” My friend said it’s like saying the security might be bad in Detroit, but that doesn’t mean you can’t go to Florida. Mexico is a big country and obviously we have some border cities that have big security problems, but we have other cities and states that are completely safe. Los Cabos obviously is one of them.
Golfweek: Do you try to position your properties in Los Cabos to appeal to different types of buyers?
Sánchez Navarro: Yes. Campestre is a project that we did thinking not of high prices. We were thinking of people who live in Los Cabos – Americans, Canadians, Mexicans. You have the golf course, the beach club, the prices are very accessible, the location is great near San Jose and on the highway to Cabo San Lucas. We have finished product there that goes from about $240,000 up to $1 million. It’s for people who would spend a lot of time in Los Cabos. We’re seeing right now more Canadians and Americans buying there. It’s a great way to go into Los Cabos, with something that’s not very expensive. And by being a member of Questro, you have access to the other courses at discounted prices.
In Puerto Los Cabos, the lots are bigger, the houses are bigger. We also divided Puerto Los Cabos into different clusters. We’ve been selling until now only lots, which go from about 7,000 square feet to about 45,000 square feet. It is focused more toward the U.S. and Canadian buyers. That’s where 90 percent of our buyers come from. This year we’re also starting to offer finished product in Puerto Los Cabos because we’ve seen that some people don’t want any hassles on the construction. It’s nice, hassle-free and at very good prices.
Golfweek: And who does Cabo Real cater to?
Sánchez Navarro: Right now we have nine hotels in that development, and we’re more focused on bringing in hotel guets.
Golfweek: Right now at Puerto Los Cabos, you have nine holes designed by Jack Nicklaus and nine by Greg Norman. What is your timeframe for building the remaining 18 holes at Puerto Los Cabos?
Sánchez Navarro: We don’t have the demand that we would like to have for it to break even. What’s happening now is we have started the construction of one hotel that will be finished by the end of this year. We’re starting in March construction of a second hotel that will be finished by the end of 2013, and there will be another hotel after that. So I think by the beginning of 2014, we will have about 800 rooms in Puerto Los Cabos from different hotels, and I think that will give us the demand for rounds to build the second 18 hotels. So I’m thinking sometime in 2014.