Cofresi Hills Residence in Forbes

Find out the origin of the investment idea in the Dominican Republic, the concept behind the entire project, the basis of our experience in the real estate development industry, and the company’s plans for the future.

Read the interview with our Managing Director, published in March 2023 in the Polish edition of Forbes.

In March 2023, in the Forbes report „The Wealthiest Poles“, an interview with the Managing Director of Cofresi Hills Residence, Michał Piętosa, was published.

The article discusses the origin of the investment idea in the Dominican Republic, the concept behind the entire project, the basis of our experience in the real estate development industry, and the company’s plans for the future.

Find the translation below. The interview is available in Polish on the publisher’s website:

Forbes, March 2023

For six years, they have been developing the Cofresi Hills Residence project in Puerto Plata, Dominican Republic. They are constructing investment properties on their own land for investors from the USA, Canada, and Europe. Factory International Group, the Polish company in question, demonstrates how effectively one can conduct business overseas.

„Having exclusive ownership of the land on which we develop our investments is our fundamental premise.“ – Michał Piętosa: Head of Americas Department Factory Int. Group.

How did a Polish capital group, operating in the real estate market in Europe for years and collaborating with energy giants on renewable energy projects, start investing in the Dominican Republic?

MICHAŁ PIĘTOSA: We were looking for new development challenges. For over 30 years we have been operating successfully, with a track record of successful investments in Europe. We carry out housing projects, focusing on the Polish and German markets. We develop renewable energy projects with a total capacity of over 1 GW. One of the reasons we were interested in the Dominican Republic was to diversify our project portfolio by entering the dollar zone. Another reason was the desire to enter a developing market, where the international experience of our team, which has been involved in real estate development for years, would translate into shared and measurable success. The Dominican Republic is a developing and promising market with no shortage of investors willing to engage in multimillion-dollar projects. The country has a stable political situation, and the government supports foreign investors. Banks and financial institutions monitor the transparency of capital flows. The Dominican Republic is one of the most popular vacation destinations for tourists from the USA, Canada, and Germany. According to the latest data, the country welcomed a record number of 7.1 million tourists by air in 2022. Puerto Plata is hurricane-free and offers everything one needs for both living and doing business. Beautiful golf courses, two international airports, two cruise ports, national parks, mountains, greenery, and the ocean. Investing in real estate is highly popular in this region, especially among US and Canadian citizens, and recently among Europeans as well. We had to see for ourselves what it looks like from the perspective of an investor involved in specific projects.

So you recognized the Dominican Republic as a safe place for investments. Where did you acquire knowledge on this subject?

We had to acquire it ourselves. It’s a process that has been ongoing for several years and constantly provides us with invaluable knowledge. Following the US State Department, we can say that it is the largest economy in the Caribbean and Central America, worth $867 billion. The process of acquiring properties with entries in land registers secures the buyer’s interests. Tax matters are transparent, and the judicial system operates efficiently. Let me give you an example. We started our investments in 2015. Unfortunately, or perhaps fortunately, we began with the purchase of a property with a legal flaw. Unknowingly, we encountered a conflict between the developer and the general contractor. We were involved in legal proceedings for several years, monitoring the situation because it concerned a condominium where our properties were located. During that time, we built a network of contacts, learned about Dominican law, and the functioning of various institutions. We invested a significant amount, primarily in terms of time and energy, in this process. The experience we gained solidified our decision to continue investing in this market.

How did you manage to direct your actions to receive the necessary support and achieve success?

Before introducing the Cofresi Hills brand to the Dominican market in Puerto Plata, we decided to make significant changes in the structure and management of our organization. Factory Deweloper transformed into Factory International Group. What we were doing in Europe formed one department with a clearly defined structure and a strategy for the coming years. On a daily basis, we are involved in the development of projects such as Osiedle Złote Piaski in Zielona Góra or Osiedle Kampinos near Warsaw (each project consisting of over 500 single-family homes). Additionally, we are implementing several other real estate projects. Our portfolio lends credibility to us both domestically and internationally. Overseas, we established a second department. We started building a holding company that secures us in all matters and provides all services to our clients. Having exclusive ownership of the land on which we develop our investments is our fundamental premise. We are effectively building our position in the Dominican market, collaborating with institutions and private entrepreneurs. We distinguish ourselves with European quality in the construction and finishing of our apartments, which earns us recognition from both Americans and highly demanding Canadians.

What are the main objectives of the Cofresi Hills project?

Our main product is investment properties based on the rental pool management model. It’s a well-established business model for investors purchasing properties in both the USA and the entire region. The investor transfers the right to use the property to us. The costs associated with property servicing, rental organization, and advertising are on our side. The only thing that remains for the owner is to enjoy high rental profits, which are managed by our Cofresi Hills Residence hotel. We provide full service in terms of gastronomy as well. We have all the necessary licenses from the Dominican Ministry of Tourism. We organize cruises and excursions in cooperation with local service providers. Our project is located in a marina that can accommodate luxury yachts up to 250 feet. In summary, we operate at the intersection of investment real estate development, hospitality, including gastronomy, and tourist services as a tour operator.

Does the owner have the opportunity to live in their property? Also, what ROI can we expect in the case of the Dominican Republic?

The investor can determine the amount of time they want to spend in their property. We are flexible in that regard. As for ROI, several factors need to be considered. Our apartments start at $3,500 per square meter. It’s worth mentioning that this price includes a fully furnished property with high-quality equipment. Compared to Polish realities, this is a very attractive price. The tourist season lasts for 12 months. Hotel occupancy in December 2022 reached 76% nationwide, surpassing the 69% threshold recorded in 2019 before the pandemic. The market indicates that the ROI ranges from 10% to 16% per year. The upcoming year will verify these data since over half of our apartments already have owners, and we started operating as a hotel, welcoming our first guests in December 2022.

Why did Puerto Plata on the northern coast prove to be an ideal location for this type of investment?

Puerto Plata is the third-largest city in the Dominican Republic, with a population of over 300,000. It is only an hour’s drive from Santiago, often referred to as the country’s second capital (with a population of nearly 1.3 million). The northern coast, specifically this part of the island, as mentioned earlier, is spared from hurricanes and earthquakes. The climate is favorable year-round. The proximity to international airports positively impacts tourism development, as well as the presence of two cruise ports in the immediate vicinity: Amber Cove and Taino Bay. Puerto Plata is a rapidly developing city that has a lot to offer. This region of the Dominican Republic is not dominated by resorts. Therefore, the emergence and development of hotels offering investors the opportunity to purchase apartments are popular and stable here. The first such properties were built as early as 20 years ago and continue to operate without disruptions.

What are your plans for Cofresi Hills in the coming year and the following years?

We have adopted the principle of discussing what we are developing on the lands that we already own and have construction permits for. Currently, Cofresi Hills Residence serves as a proof of concept for our investors. What’s next? We can talk about plans for the years 2024-2030. These plans involve further phases, including the construction of 50 apartments in three eight-story buildings on the hillside of Cofresi Bay. At the top of the building, on the eighth floor, there will be a high-class restaurant covering almost 300 square meters. We also anticipate building a Presidential Suite for highly demanding guests within the next two years. Subsequently, we will construct over 120 apartments as part of another complex in the vicinity. When we speak about all phases of this project, Cofresi Hills serves as a prelude to what we have started developing simultaneously in the American-European team. I cannot provide more details about this project at the moment. It is a large-scale project that goes significantly beyond what we are currently focused on. It involves substantial infrastructure expansion and combines property design and construction with the development of large-scale renewable energy sources. We have outlined our strategy for two decades. We aim to present this project to the world in 2025-2026.

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